A few years ago, the story of the two Miami youths, Efraim Diveroli and David Packouz, who won a $300 million dollar contract from the Pentagon for ammo for Afghanistan, which they fulfilled with illegal Chinese surplus, was a nine days wonder. Everybody was sure the conspiracy had to go right to the top! Cheney or even Bush`s head would roll over this. I looked into the events and came away with a different impression.
Now, Guy Lawson has a funny story on this: The Stoner Arms Dealers
"We`ve got a problem," he told Packouz, shouting to be heard over the restaurant`s thumping music. "The plane has been seized on the runway in Kyrgyzstan."
The arms shipment, it appeared, was being used as a bargaining chip in a high-stakes standoff between George W. Bush and Vladimir Putin. The Russian president didn`t like NATO expanding into Kyrgyzstan, and the Kyrgyzs wanted the U.S. government to pay more rent to use their airport as a crucial supply line for the war in Afghanistan. Putin`s allies in the Kyrgyz KGB, it seemed, were holding the plane hostage - and Packouz was going to be charged a $300,000 fine for every day it sat on the runway. Word of the seizure quickly reached Washington, and Defense Secretary Robert Gates himself was soon on his way to Kyrgyzstan to defuse the mounting tensions.
Packouz was baffled, stoned and way out of his league. "It was surreal," he recalls. "Here I was dealing with matters of international security, and I was half-baked. I didn`t know anything about the situation in that part of the world. But I was a central player in the Afghan war - and if our delivery didn`t make it to Kabul, the entire strategy of building up the Afghanistan army was going to fail. It was totally killing my buzz.
As I explained back then, Diveroli`s business model looked like it was basically the same as all those Brooklyn mail order camera stores
: semi-bait-and-switch. Lure customers in with impossibly low prices, then fob them off with the minimum you can get away with.Â Â His family owned a gun shop in LA that did business that way, where Efraim had worked as a lad.
Packouz was about to get a rare education. He watched as Diveroli won a State Department contract to supply high-grade FN Herstal machine guns to the Colombian army. It was a lucrative deal, but Diveroli wasn`t satisfied - he always wanted more. So he persuaded the State Department to allow him to substitute Korean-made knockoffs instead of the high-end Herstals - a swap that instantly doubled his earnings. Diveroli did the same with a large helmet order for the Iraqi army, pushing the Pentagon to accept poorer-quality Chinese-made helmets once he had won the contract. After all, it wasn`t like the military was buying weapons and helmets for American soldiers. The hapless end-users were foreigners, and who was going to go the extra mile for them?
The only funny stuff that is left out is that Diveroli`s uncle Shmuley Boteach, lately in the news feuding with his next door neighbor, the government of Libya,
was Michael Jackson`s rabbi, and that one of the edges AEY had going for them in the government contracting business was that they had checked the disadvantaged minority box for being Hasidic, although they weren`t.