| Background to weapons and convert operations in Georgia | |
| Since at least 1981, a worldwide network of independent [i.e., no direct U.S. government ties] companies, including airlines, aviation and military spare parts suppliers, and trading companies, has been utilized by the CIA and the U.S. government to illegally ship arms and military spare parts to Iran and to the Contras. These companies were set up with the approval and knowledge of senior CIA officials and other senior U.S. government officials and staffed primarily by ex-CIA, ex-FBI and ex-military officers. These CIA-controlled companies include Aero Systems, Inc., of Miami, Arrow Air, Aero Systems Pvt. Ltd of Singapore, Hierax of Hong Kong, Pan Aviation in Miami, Merex in Georgia, Sur International, St. Lucia Airways, Global International Airways, International Air Tours of Nigeria, Continental Shelf Explorations, Inc., Jupiter, Florida, Varicon, Inc., Dane Aviation Supply of Miami, Parvus, Safir, International Trading and Investment Guaranty Corp., Ltd., Air America, CAA, and Information Security International Inc. During the Iran Contra affair, General Secord's arms shipments, arraigned through the CIA, transferred weapons destined for Central America to Merex Corporation, (Merex International Arms) of Savannah, Ga. The Merex address was occupied by Combat Military Ordinances Ltd., controlled by retired military officer James P. Atwood. Atwood, a retired Lieutenant Colonel of U.S. Military Intelligence, [and later a CIA contract worker], stationed in their Berlin office, was involved in major arms trades with CIA-sponsored international buyers, specifically Middle Eastern Arab states. Monzer Al-Kassar utilized the Merex firm for some of his weapons transactions with the CIA-controlled international weapons cartel. Merex systems was founded by Otto Skorzeny's associate Gerhard Mertins in Bonn after the war and was considered a CIA proprietary firm. Merex was close to and worked with the BND, the German intelligence service evolved from the CIA-controlled Gehlen organization. Atwood was involved with Interarmco, run by Samuel Cummings, an Englishman who ran the largest arms firm in the world. Cummings died in Monaco Carlo with a country place at Villars in the Swiss Alps. where he resettled in 1960 because he had looted his CIA employers and found European residence safer than Warrenton, Virginia. Interarms (formerly Interarmco and officially the International Armaments Corporation) was the world's largest private arms dealer, and once had enough weapons in their warehouses to equip forty U.S. divisions. The sole owner was Sam Cummings, who got his start working with the CIA to procure weapons for the 1954 coup in Guatemala A most interesting individual was James P. Atwood (April 16, 1930- July 20, 1997). A top US Army Intelligence agent and important CIA contract worker and former FBI employee who ran guns, drugs, counterfeit rare German daggers, stolen archives and much more in and out of various countries from his headquarters in Savannah, Georgia. During his career, Atwood worked with the CIA's Sam Cummings, Tom Nelson, Jim Critchfield and many others Atwood's activities are linked to Robert Crowley (who knew him and disliked him) ,to Jim Critchfield and a number of other CIA luminaries. Arrested by the Army's CIC in the early 60s, for misuse of government mail, tax fraud and other matters, Atwood got the CIA to force the charges against him dropped. All the paperwork was supposed to have been destroyed but a copy of the 62 count indictment plus the Chicago Federal judge's orders have survived. Atwood operated in the Middle East, Germany and Central America. He sold US secrets to Marcus Wolfe of the Stasi and the BND photographed them together in East Berlin He smuggled guns into Guatemala and Nicaragua and drugs into the US. Atwood's role in supplying weapons and explosives to the Quebec Libré movement. The head of the Canada Desk at the Company was actively encouraging this group to split away from Canada. This is a chapter that the CIA does not want discussed. Atwood's connections with Skorzeny and the IRA/Provo wing make dramatic reading. One of Atwood's Irish connections is the man who ran the cell that blew up Lord Louis Mountbatten in 1979. There is also the shipping of weapons into the southern Mexican provinces by Atwood and his Guatemala based consortium. Oceanic Cargo. Atwood had a number of ex-Gestapo and SD people on board, some of whom were wanted for war crimes. Klaus Barbie was also connected with Atwood Barbie, who was Gestapo chief in Lyon, France, during the war, worked for the CIC after the war and fled to South America when his American handlers tipped him off. Barbie took some of the hidden Nazi gold and invested it in several businesses and also continued to prosper by starting the Estrella Company which sold bark, coca paste, and assault weapons to a former SS officer, Frederich Schwend in Lima, Peru. Schwend had been trained by the OSS in the early 1940s after he had informed Allen Dulles that the German SS had hidden millions in gold, cash, and loot in the mountains of southern Germany and Austria as the European war was winding down. Both Schwend and Barbie formed Transmaritania which was a shipping company that also generated millions of dollars in profits from the cocaine business. They purchased their weapons from another SS colleague, Colonel Otto Skorzeny who had been head of SS Commando units towards the end of the war, later worked for the CIA and had started the Merex weapons business in Bonn after the war. Another Atwood contact was one Walter Rauff, a senior SD officer, friend of Dulles and once head of the SD in Milan (after a tour in Tunisia as head of the SD there during Rommel's campaign in Africa.) The Rauff story is even more entertaining than the Barbie one and more disruptive when it becomes public. Rauff worked for the CIA, lived unmolested and well protected by the CIA, in South America . While Atwood was involved in supplying weapons to Cuban insurgents for the Bay of Pigs incident, he stated to a number of his associates that he learned of highly classified information on the accidental release, in Florida, of deadly toxins that the CIA was planning to use in advance of the invasion to "soften up" Castro's militia. The designated head of the CIA, Porter Goss, was a CIA agent in Florida at this time, was involved in the planning and expected execution of the Cuban invasion and suddenly became "very ill", as his specs on Google point out, and had to retire. Atwood told his friends that Goss, later a Florida political figure, was a participating party in this specific part of the CIA invasion plans. In 1992, following the collapse of the Soviet Union, there was considerable concern expressed in US intelligence circles about the whereabouts, and also the security of, certain ex-Soviet military tactical atomic warheads. In the 1960s, the Soviet Union launched R&D to miniaturize and improve reliability of nuclear weapons. Development activities included strategic systems for the Navy; cruise missiles, aviation bombs and artillery projectiles [the smallest nuclear charge was developed for a 152mm artillery projectile].The model is based on unclassified data on the components in an atomic artillery shell, to see if such a system could be reassembled in a suitcase. Indeed, as it turns out, the physics package, neutron generators, batteries, arming mechanism and other essentials of a small atomic weapon can fit, just barely, in an attaché case. The result is a plutonium-fueled gun-type atomic weapon having a yield of one-to-ten kilotons, the same yield range attributed in a 1998 US media interview by General Lebed to the Russian "nuclear suitcase" weapon." The smallest possible bomb-like object would be a single critical mass of plutonium (or U-233) at maximum density under normal conditions. An unreflected spherical alpha-phase critical mass of Pu-239 weighs 10.5 kg and is 10.1 cm across. A single critical mass cannot cause an explosion however since it does not cause fission multiplication, somewhat more than a critical mass is required for that. But it does not take much more than a single critical mass to cause significant explosions. As little as 10% more (1.1 critical masses) can produce explosions of 10-20 tons. This low yield seems trivial compared to weapons with yields in the kilotons or megatons, but it is actually far more dangerous than conventional explosives of equivalent yield due to the intense radiation emitted. A 20 ton fission explosion, for example, produces a very dangerous 500 rem radiation exposure at 400 meters from burst point, and a 100% lethal 1350 rem exposure at 300 meters. In 1991 the US unilaterally withdrew its nuclear artillery shells from service, and Russia responded in kind in 1992. The US removed around 1,300 nuclear shells from Europe. The Russian Defense Ministry has stated officially through the offices of Lieutenant General Igor Valynkin, the head of the ministry's Twelfth Main Directorate, which is responsible for the storage and security of nuclear weapons, attempted to reassure journalists about the safety of the Russian nuclear arsenal that absolutely all nuclear weapons in the Russian armed forces are currently in the custody of his directorate, which ensures their "state acceptance at the factory, storage in arsenals, servicing, and their transport to the troops." Valynkin said that because of concerns about the "criminal situation" in Russia, at the beginning of the 1990s all Russian tactical nuclear weapons, including nuclear mines and artillery shells, were removed from the arsenals of individual military units and transferred to special storage sites under the control of the Twelfth Directorate. This step was taken in order to prevent terrorists from gaining access to the weapons, as the arsenals at individual units are much less secure than the central storage sites Referring directly to the issue of the "suitcase" bombs, Valynkin admitted that is technically possible to build a small low-yield nuclear warhead.. In 1992, James Atwood, the former Interarmco people and an Israeli Russian named Yurenko (actually Schemiel Gofshstein) formed a consortium in conjunction with James Critchfield, retired senior CIA specialist on oil matters in the Mideast to obtain a number of these obsolete but still viable weapons. Both Critchfield and the Interarmco people had, at the behest of the CIA, supplied weapons to the rebels in Afghanistan during their protracted struggle with the Soviet Union. Critchfield worked with the Dalai Lama of Tibet in a guerrilla war against Communist China and headed a CIA task force during the Cuban missile crisis. He also ran regional agency operations when the two superpowers raced to secure satellites first in Eastern Europe, then in the Middle East. In the early 1960s, Critchfield recommended to the CIA that the United States support the Baath Party, which staged a 1963 coup against the Iraqi government that the CIA believed was falling under Soviet influence. Critchfield later boasted, during the Iran-Iraq war that he and the CIA "had created Saddam Hussein." With the growing political importance of Middle East oil, he became the CIA's national intelligence officer for energy in the late 1960s and early 1970s, then an energy policy planner at the White House. He also fronted a dummy CIA corporation in the Middle East known as Basic Resources, which was used to gather OPEC-related intelligence for the Nixon administration. .Critchfield was the chief of the CIA's Near East and South Asia division in the 1960s and a national intelligence officer for energy as the oil shortage crisis began in the early 1970s. Officially retiring from the CIA in 1974, Critchfield became a consultant, corporate president of Tetra Tech International a Honeywell Inc. subsidiary and which managed oil, gas, and water projects in the strategic Masandam Peninsula. It sits on the Strait of Hormuz, through which much of the West's oil is transported. At the same time, Critchfield was a primary adviser to the Sultan of Oman., focusing on Middle East energy resources, especially those in Oman. Utilizing Atwood's STASI and ex-KGB contacts, they were able to obtain from bribed Russian military personnel, twenty of the atomic warheads. With Critchfield's Mideast and Afghanistan connections, these warheads were sold to a Pakistani group for an estimated US $20 million in early 1993. "Yurenko" brokered the transfer of money via two banks in Pakistan to a Swiss bank.(Specific account information is known) Some of the money, $US 50,000 was deposited into a so-called "white account" (i.e., one that the SBA could release information on to any outside probers) and the balance into three so-called "black accounts" (i.e., accounts that were truly secret.) Atwood died suddenly in his home town of Savannah, GA in 1997 while under the surgeon's knife and left a legacy of double-dealing, amorality and fascinating but hitherto only guessed-at history behind him
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Rats Everywhere, can you fill in the gaps?
Intercepted correspondence from USAID, OIG
RE: Everyone looks bad, so everyone looks the other way.'
"Can you please advise a telephone number and let me know of a few convenient times, which I may try to contact you in reference to the information about USAID programs and activities?"
Thank you,
KC Smith
Special Agent
USAID Europe & Eurasia
RIG Frankfurt, Germany
OFFICE: 49-69-7535-7845
FAX: 49-69-7535-7841
SmithKC2@state.gov
1) A source under contract to USAID, as employed business development expert, Mr. X, who may be the source on ADCI corruption with good access states the following: ACDI started a rural credit SME program funded by USAID about 2001 in Azerbaijan. It was the largest of the USAID funded credit projects. About $4 million was in loans. They made loans to rural enterprises, farmers, etc. They had offices in most areas of the country (Lenkoran, Imishli, Ganja, etc.) ACDI/VOCA, an international development organization dedicated to empowering people worldwide.4
2) However, regardless if this source will be forthcoming, he can give more information about the basis of Azerbaijan Business Assistance and Development Program (ABAD), and how things were flawed (how there was bid rigging, and how it was the contract was awarded to a group with weak organizational credentials in business development at best. You just need to look into how the project was solicited, and it may not have been a RFP, and the winner did not win in full and open competition, and thus USAID participated in corruption and did not acquire the services of the most capable technical assistance provider.
The ACDI system in Azerbaijan was established to provide local control and a local company was set up to run all the local offices. The company was called CreditAgro This system was unlike that in Georgia, where credit associations were formed. This was more centralized, with offices reporting to a central office in Baku. However, the same propensity to hand the operation over to corrupt locals was observed. In this case, ACDI/VOCA hired a man called Eldar Jafarov, initially as credit officer, but he eventually became head of CreditAgro. Soon problems developed between Eldar and the ACDI/VOCA Chief of Party and other expatriates, who considered that Eldar was taking too much power and hiring cronies for every position in CreditAgro. Despite numerous attempts by ACDI/VOCA expatriate staff to remove Eldar Jafarov these attempts were consistently blocked by ACDIVOCA Washington. An internal audit proved many allegations against Eldar. Still, ACDI/VOCA refused to fire Eldar or change human resource personnel practices.
In 2005, however, enough was enough and ACDI decided to fire Eldar. Then Eldar told all managers of Creditagro to go on strike in his support. As a result, ACDI/VOCA Washington completely caved in (ACDI's VP Dennis DeSantis), and gave the position back to Eldar. The fallout was immediate and the ACDI/VOCA Country Director resigned in disgust, [check out this source] and Eldar, now much more powerful, personally fired the other principal expatriate himself, cleaning up loose ends. The impression was that Creditagro was now a private enterprise of Eldar.
The United States Agency for International Development, USAID was well aware of this scandal but decided to turn a blind eye, and often sided with Eldar in subsequent criticism of ACDI/VOCA. However, they still made a grant of the USAID funds (about $4 million) to ACDI/VOCA/Credit Agro. ACDI continues to be the owner of CreditAgro, yet it forced into a curious position where they are telling all potential investors and lenders to stay clear of CreditAgro because of the above-mentioned shenanigans, and not to taint their reputation more than it is already.
It was obvious that ACDI/VOCA had really mishandled the project, setting up a private company serving one individual. Still, even though USAID was for a very long time aware of the problems, never penalized ACDI/VOCA, but instead, in 2005, rewarded ACDI/VOCA with a major rural enterprise development project in Azerbaijan, which is now employing the old second in command fired by Eldar.
Successful Track Record
This is not the first incidence of ACDI/VOCA incompetence in running credit projects. The Georgia ACDI rural credit project was a well-known complete disaster, as local credit associations created by ADCI and funded fully by USAID and USDA were taken over by the local managers selected by ACDI/VOCA and turned into a private money making racket with accountability to none. A later USAID project to assist these entities found out later that the managers had illegally fleeced the associations of most of their funds. Most of the funds disappeared as "dividends" to the local project managers, who normally had been selected due to their power within the local community (for example, some of them were heads of the local tax inspectorate and well known bandits, including members of state security, and not because of any credit or relevant knowledge.
Professional skills are not the decisive factor. The result is that senior local bureaucrats, politicians, and businessmen gain positions. This was part of the problem with the credit unions set up by ACDI/VOCA in 1993 and funded by the US government.
ACDI/VOCA hired these people ostensibly because their muscle could be used to guarantee repayment from poorer farmers. Even as far back as 1998 the then Agriculture Deputy Minister Nugzar Duchidze had remarked that ACDI/VOCA's setup was a "rich farmer's club designed to help these well connected individuals. The Georgia operation was obviously even worse than the Azerbaijan setup. Still, USAID encouraged the Azerbaijan operation was to be patterned after Georgia by the USAID program officers who controlled aid programs in both countries.
One International TV network producer wrote an email dealing with accountability in international organizations 'Ahh – there is the problem. Nobody is interested in corruption. Western agencies would be very embarrassed to be seen dealing with a bunch of second-rate crooks. After all, you must remember that it looks bad if your programme which is funded by the US or Europe has no correct oversight. Everyone looks bad, so everyone looks the other way.'
Nonetheless, it does appear that the US government and the Bush Administration were a bit concerned about the "total" lack of accountability NGOs (including a host of international organizations) have when receiving grants and cooperative agreements from USAID. These NGOs can do what they want, and are "assumed" to be doing well, because they are "fellow travelers" with USAID. They all claim to be helping in improving the livelihood of local farmers, small business, etc.
No noise was made of this incredible debacle of ACDI/VOCA in Georgia because none other than Rusty Schultz a very close friend of Gerry Anderson, high-ranking USAID official in Tbilisi, ran the ACDI/VOCA project in Georgia. Many sources (including a those close to a Chemonics run project of assistance to credit organizations) confirm that Anderson did everything in his power to protect Rusty and his corrupted minions. And finally because of their disastrous management, Jim Holderbaum, ACDI Country manager was lost as what to do. Many claim that those working in NGOs only to come to Georgia in order to get laid regularly, something Rusty was good at arranging. Then visiting experts had access to the Rusty castle where they could be entertained, and the rest is history.
Gerry Anderson, USAID Georgia, directly instructed even those visiting experts that were involved in proposal writing when he was in Georgia in mid-2001 that they needed to hook up with ACDI. Now that is interesting and what authority would Gerry have in making such recommendations? He was proposing to work with a specific group and the instructions were outlined in such a way in terms of value chains, and that the only clear choice was that ACDI as the company that they he needed to work with. A month or so later on other business, same instructions were provided to visiting experts to make sure that there was a connection with ACDI.
It should also be noted that ACDI/VOCA has a policy of putting on its payrolls mainly old USAID hands. That is why ACDI/VOCA is a favorite in all parts of USAID's world. Others need not apply. Financially ACDI/VOCA is a disaster, but it is doubtful that any of the board members have the brass to go against the entrenched senior employees, for whatever reason. – and AgVantage is doing well as can be expected. SAVE, the original project in Georgia, which was renamed AgAdvantage and this project was doomed from the start because of the problems with ACDI. First their money problems: Then there was a lack of any clear direction or focus, other than to pander to Gerry Anderson and USAID.
It is clear that what happened is Azerbaijan and Georgia is par for the course; Gerry Anderson had gone to great pains to cover up USAID scandals and to protect his friends. What is less clear is the motivation. He has made sure that many project evaluations are stacked with the people that will come back with results that conform that all went well and program objectives were achieved. In one instance, he had bumped off a person from an evaluation that may not have brought back the desired results. Allegations of his morals are well documented, and there is a large age difference between him and his Asian mail order bride, and there are still allegations of sexual harassment of staff of USAID floating around Tbilisi (he demanding that some USAID staff works share in housekeeping responsibilities, such washing his plates).
Eventually it is known, as part of damage control Rusty Schultz, the program coordinator in Georgia, was sent to head up a high profile ACDI/VOCA operation in Iraq. It was clear that criminal activity had proliferated unchecked in the Georgia project and the cover up was complete. And still, with similar noise filtering out of the Azerbaijan project, and still USAID does nothing other than praise a bankrupt project and continue to dole the pork to an incompetent but rich organization.
Moreover, there are serious allegations of money being used to support the trafficking of weapons. One source shares the following: "If there was money going to arms I rather suspect it would have been more likely to have been connected to Rusty's sidekick, the New Zealander mercenary who had been all over Africa and Asia soldiering in places they would pay. I heard lots of stories about how he and Rusty got hooked up, but I suspect all of them were at least partial fabrications just to make both of them look good."
There are many stories in Tbilisi about how he and Rusty got hooked up, but in all likelihood most of them were at least partial fabrications just to make both of them look good. The bottom line, Rusty needed the soldier of fortune (he may have officially been his deputy but it is difficult to say if he had that title) because he made the parties and the stories so much more fun for Rusty to use to encourage people like Gerry that he wanted to co-opt the parties. Gerry is all about spin and control and the soldier wanted everyone to know that though he was in the background it was he who was still the one carrying the entire buzz.
The most notorious corruption in Georgia involved Micro and SME Credit activities in the South Caucasus countries of Georgia and Azerbaijan. It is hardly accidental that program have been so unsuccessful that there is even doubt if they were even intended to be effective from the very start.
How long can USAID continue to support an organization with such a record of negligence and criminal malfeasance as ACDI/VOCA and others? ACDI/VOCA continues to win all the contracts it wants and nobody brings their record to the public light. ACDI/VOCA works in approximately 40 countries and claims to foster vibrant communities, organizations and enterprises that can manage and finance themselves.
See acdivoca.org for more information. All this is a matter of record with USAID, OIG, Office of Inspector General.