Probe alleges ‘huge’ arms sale bid by Libya

updated 9:39 a.m. ET April 13, 2008

PERUGIA, Italy - The Libyan officer tried to cloak the purpose of his call to the Italian arms dealer. "A friend,'' he said, wanted to buy 1 million "pieces'' and 50 million items of "food.''

But when that phone call was placed in 2006, Italian police were listening. They knew the meaning. Libya was shopping for guns -- lots of them.

Authorities shadowed the negotiations between Libyan officials and a group of black-market dealers from across Italy for a year before they moved in and broke up what would have been a $64 million deal for hundreds of thousands of Chinese-made assault rifles.

The case, detailed in documents obtained by The Associated Press, raises questions about whether Libya, a country eagerly shedding its reputation as a sponsor of terrorism, is still surreptitiously supporting suspect groups and regimes. The investigation also underscores the Italian underworld's role as ago-between for illegal arms deals.

Destination Chad, Sudan?
The court papers say at least part of the shipment was expected to go to other countries, and experts believe likely destinations were African countries including war-torn Chad and Sudan, where killings of civilians are widespread.

Libyan officials did not respond to questions from the AP about the allegations.

Italian prosecutors say the deal involved hundreds of thousands of dollars in kickbacks to senior Libyan officials.

Italy was a natural place for them to shop.

AP This photograph included in court documents obtained by The Associate Press is an image intercepted in a Sept. 16, 2006, e-mail and shows samples of Chinese-made assault rifles offered by an alleged Italian arms trafficking ring in an attempted sale of arms to Libya.

"Organized crime syndicates ... use Italy for brokering or transshipping illegal arms transfers to the Balkans, Africa, the United States and Colombia, in a trade that includes cocaine and human trafficking,'' said Sergio Finardi, a military logistics expert at TransArmsEurope, a nonprofit group based in Italy and the United States that monitors arms deals.

It was anti-Mafia prosecutors in the central city of Perugia who discovered the Libyan transactions, while conducting an unrelated investigation into drug trafficking by the mob. One of the drug suspects was found to be part of a group that used offshore companies in Malta and Cyprus to broker arms deals.

The phone call they tapped was between Ermete Moretti, owner of the Malta-based Middle East Engineering Ltd., and a man identified by prosecutors as a Libyan Defense Ministry official in Tripoli, Col. Tafferdin Mansur.

"They want the food too,'' Mansur told Moretti in the March 2006 conversation, referring to bullets. "Their request is for 1 million pieces and 50 million food.''

Mob traced to Libya
A few days later, Gianluca Squarzolo, the crossover suspect from the drug probe, went to the Libyan capital, Tripoli, to make a deal. Unknown to him, police at Rome's Leonardo da Vinci airport inspected his checked baggage and found a weapons catalog, the first physical evidence of the group's activities.

Police used wiretaps and e-mail intercepts to keep tabs on the ensuing negotiations, which documents show were marked by requests for bribes by the Libyan officials. When it appeared that an initial agreement was ready for the sale of 500,000 T-56 submachineguns, a Chinese version of the AK-47, authorities moved in to breakup the deal.

Early on, the arms traffickers themselves had hinted that Libya would not have been the final stop for the shipment. The country of 5.5  million has an army of only 76,000 personnel, according to the London-based International Institute for Strategic Studies.

"They are really shopping around if they want a million,'' Moretti said in a March 2006 conversation. "It means they want to spread them right and left.''

'Huge' order
Investigators shared that view. "The suspects know that the huge order of AK-47s is destined to fulfill not only the needs of the Libyan army ... they are aware that part of the order will be forwarded to third parties,'' anti-Mafia prosecutor Dario Razzi in Perugia, a city in central Italy, wrote in requesting the arrest warrants for the group.

The Italians made trips to Tripoli and China, arranged for six sample guns to be sent to the North African country and got as far as organizing a trip to Libya for the Chinese middlemen to sign the final contract.

On Feb. 12, 2007, police across Italy arrested four of the alleged arms traffickers: Moretti, Squarzolo, Massimo Bettinotti and Serafino Rossi. A fifth member, Vittorio Dordi, is believed to be in the Democratic Republic of Congo, where he apparently is involved in the diamond trade.

In addition, 13 other Italians were arrested in the drug probe. A lawyer for the Italians did not return repeated phone calls.

MORE FROM MIDEAST & N. AFRICA

Mideast & N. Africa Section Front

Iran reform leader to set up political front Newsweek: Is Iran's 'green' revolution doomed? Geithner: Recession easing, U.S. on the mend Iran hangs 14 members of Sunni group Conservative warns of Iran disintegration Militant convicted in U.S. diplomat's slaying Most Muslim nations silent on China riots Saudis try 300 al-Qaida suspects Mideast & N. Africa Section Front   Add Mideast & N. Africa headlines to your news reader: