Taos Industries, the biggest corporate supplier of small arms to Iraq since the invasion in 2003, was founded by David Hogan shortly after he retired from the military in 1989. Hogan had been chief of foreign intelligence for the U.S. Army Missile Command at the Redstone Arsenal in Huntsville, Alabama. The company is run out of the Putnam Industrial Park in Madison, about a mile from the military base.
A few years after Taos was created, Keith R. Hall, deputy assistant secretary of defense for Intelligence under President Bill Clinton, told the U.S. Congress that the fall of the Berlin Wall had created an "opportunity to acquire and exploit major, state-of-the-art weapons systems."
From his vantage point as a former intelligence official in the missile command with knowledge of the "black budget" or secret military contracts used to buy such systems, Hogan was well aware that such opportunities could be profitable.
In the early 1990s, he started bidding on classified contracts put out by the Defense Intelligence Agency, the Pentagon's military intelligence branch.
At first he was beaten out by better-connected dealers, such as Carlyle Group subsidiary BDM International of McLean, Virginia, which won the bid to acquire an S-300, a series of Soviet long-range surface-to-air missile systems (the equivalent of the Patriot missile defense system).
Despite losing this major contract, Taos won lucrative orders over the next decade to sell spare parts to foreign military customers that use older U.S. military equipment. Taos also provides vehicles or spare parts to test ranges that rely on Russian radars and vehicles, and in the last five years, has won a number of orders to provide weapons for the U.S. military-backed governments in Afghanistan and Iraq.
Taos was bought in October 2006 by Agility, a Kuwaiti company that is operated by the family of Jamil Sultan al-Essa, to allow them to bid on classified U.S. military contracts.
Over the last five years since the invasion of Iraq, Taos has received seven of the 47 weapons supply contracts listed by Amnesty, worth $95.1 million out of the $217 million total.
The majority of sales were for Soviet-type infantry weapons. Among the weapons listed in some 35 contract documents reviewed by CorpWatch were requests for assault rifles (AK-47s), M4 Benelli shotguns, portable machine guns (RPK, PKM), sniper rifles, shoulder-fired rocket propelled grenades (RPG-7), UBGL M1 grenade launcher and 9mm pistols (mostly Glocks), and ammunition.
Amnesty investigators have also uncovered documents that suggest that several of Taos's subcontractors were either operating illegally or had been listed by the United Nations for smuggling weapons.
For example, Amnesty alleges that Taos first subcontracted to a Moldovan/Ukrainian company, Aerocom, to transport from Bosnia to Iraq 99 metric tons of arms for Iraqi security forces. The sales for the year ending Jun. 31, 2005 were mostly for Kalashnikov rifles.
Aerocom has a history of shady dealings. In 2002 an expert report commissioned by the UN Security Council charged the company with smuggling weapons from Serbia to Liberia in violation of a UN arms embargo. In August 2004, Moldovan authorities revoked Aerocom's air operating license. Scout d.o.o, a Croatian company named as the broker in these shipments, was not registered in Croatia to deal in arms.
In May 2005 the Italian newspaper, Corriere della Sera, revealed that Taos had supplied thousands of Italian-made Beretta 92S pistols that were among the weapons seized in Iraq from al Qaeda operatives responsible for killing civilians. The Beretta pistols had been dispatched in July 2004 from Britain to the U.S. military base in Baghdad. An Italian court investigation the next year questioned the shadowy methods used in shipping the guns from Italy to Britain.
Despite the Italian reporting and the publication of the Aerocom contracts in a 2006 Amnesty report ("Dead on Time"), the U.S. government continued to award contracts to Taos as recently as October 2007.
Taos Industries refused to answer the specific allegations in Blood at the Crossroads.
"Amnesty International's reporting about Taos Industries is factually inaccurate and misleading. Taos's operations have been conducted transparently and within U.S. Department of Defense guidelines," the company said in a statement released to CorpWatch.
"Taos sells and delivers equipment to only one client: the U.S. government. The company has shared information about the transactions in the Amnesty reports with Congress and the Defense Department."
Amnesty researchers note that blame must also be assigned to the U.S. officials who ran the program, who admit their arms control systems for contracts such as the Taos one using Aerocom have been flawed.
Indeed two U.S. government investigative reports have highlighted this problem.
An October 2006 report by the U.S. Special Inspector General to Iraq calculates that serial numbers were logged for only 2.7 percent of the 370,000 infantry weapons supplied to the Iraqi security forces under U.S. government contracts. In many cases, contractors delivering arms imports did not turn in the obligatory official inspection reports, known as DD-250s, substituting instead "Adequate for Payment" paperwork.
A July 2007 report by the U.S. Government Accountability Office revealed that at least 190,000 weapons were "unaccounted for" in Iraq because of discrepancies between what was authorized for export and what the Multinational Security Transition Command-Iraq (MNSTC-I) recorded for the period between June 2004 and July 2007.
Arms experts say that this was a serious mistake. "It is likely that a large proportion of the hundreds of thousands of small arms and light weapons that have 'gone missing' in Iraq are either in the hands of anti-U.S. insurgents or in other countries, fueling conflicts there," says William Hartung, the director of the Arms and Security Initiative of the New America Foundation.
Amnesty says that the situation in Iraq should also be seen as part of the bigger global problem of unrestricted arms sales.
"The time for an arms trade treaty is now," says Amnesty's Brian Wood. "Sixty years after the signing of the Universal Declaration of Human Rights, the same governments can and should deliver an effective agreement on international arms transfers with human rights at its heart."
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Albion Monitor September
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