The New Zaharoffs

"We still deal in original sin," says a European arms trader. That somewhat mystical remark typifies the reputation of the arms trade, both within and without its own ranks. Arms salesmen apparently can never quite get over the fact that they are the heirs of Sir Basil Zaharoff, the archetypal death merchant who gave the trade its bad name. Bribing, cheating, lying fluently in eight languages and playing upon nations' fears of their neighbors, Zaharoff--as chief salesman for Britain's Vickers company--amassed a huge fortune by selling weapons to both sides in the Boer War, Balkan conflicts and World War I.

Today's Zaharoffs come equipped with computer printouts, microfiche reference data on ballistic curves and a quick-reference international airlines timetable. They range from self-effacing defense ministry bureaucrats and eager military attaches earning regulation civil service salaries to the aggressive representatives of the private manufacturing companies, whose salaries and bonuses often reach six figures. One retired U.S. Army officer who brokered the sale of antiaircraft missiles to a Latin American regime is believed to have collected a commission of more than $4 million.

Naturally that lucky salesman did not pocket his entire commission; more than half of it had to be distributed as "gratuities" to the officials in the purchasing country who had smoothed the way for the deal. By and large, weapons these days are sold like any other manufactured product: in straightforward boardroom deals that have been scrutinized by lawyers and checked thoroughly by accountants, and are supervised carefully by government agencies. Where there is keen competition among several suppliers, however, some arms companies try a little harder. "Graft fuels almost every arms transaction," admits a veteran European arms trader. In his view, the main factor determining the size of the bribe required to make a sale is the degree to which power is dispersed within the government buying the arms. "Some governments are so tight at the top that one or two handouts will do. Others are so 'democratic' that you practically have to bribe the lavatory attendants."

Like Sir Basil, today's salesmen sometimes try to fill their order books by playing one nation against the other. "What I like doing," admitted a European arms salesman visiting Colombia, "is selling one weapon here in Bogota and then going off to Caracas to sell them the antidote." The most successful modern practitioners of this ploy seem to be the fleet-footed French, who first sold the Exocet antiship missile to Peru's leftist dictatorship in 1973, then leaked the news to neighboring Chile, whose rightist leaders became so jittery that they too bought the missile.

Competition among arms exporters is often cutthroat. Secrecy and deception become second nature as some weapons salesmen, in ways that seem to have more in common with international espionage than commerce, try to embarrass, discredit and even blackmail their competition.

There are less flamboyant ways of disconcerting rival salesmen. Representatives of the U.S.'s Northrop Corp. who were in Brazil selling the F-5 warplane discovered that their telephones had been tapped and their luggage rifled. At midnight they were awakened by jarring telephone calls; muffled voices threatened their lives unless they quickly left town. Some Northrop people suspect--but of course cannot prove --that the culprits were salesmen from a major competitor of the F-5 for sales to South American air forces.

Quite legitimately, American manufacturers often attempt to trump foreign rivals by pointing out that U.S. products have been battle-tested in Viet Nam or the Middle East. The French, however, consistently exert the most impressive sales efforts. To complete a sale of Mirages to Australia, Marcel Dassault arrived accompanied by French military officials and a senior director of the Bank of France; later a bevy of French film stars were flown in.

The increased role of government in the sale of arms has left little room for freelance private dealers. Their sales --mostly of spare parts and used arms--comprise less than 5% of the world weapons trade. The private dealers survive primarily because their unrivaled knowledge of specific markets enables them to find customers for surplus weapons. For example, Samuel Cummings, an American who now lives in Monaco, recalls that a few years ago he was able to supply Sudan's mounted cavalry with much needed lances, which he had picked up from Argentine arsenals. With ten weapons-filled warehouses in Alexandria, Va., Cummings today can supply a small army at short order--if Washington gives him an export license.

West Germany's Gerhard Mertins, who was frequently used by Bonn in the 1960s to export arms when political considerations prevented the government from doing so itself, is now a specialist in Middle East weapons requirements. Another freelance supplier, California's Michael Kokin, boasts that his company can "clothe a naked army, put it in the field and provide spare parts for its weapons."

There is no evidence that these private dealers sell arms illegally; Kokin and Cummings, for instance, would run the risk of forfeiting their government licenses and thus losing out on their profitable legal arms trade. In fact, most of today's illegal "gunrunning" is done by governments--such as Libya's and Czechoslovakia's covert supplying of the Irish Republican Army.

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