By Ángel Páez
LIMA, Feb 3 2006 (IPS)

Irregular arms deals were among the most lucrative business activities in Peru during former president Alberto Fujimori’s decade in power. And according to reports, they have continued to be, in the nearly five years that current President Alejandro Toledo has been in office.

In the past two years alone, Peru’s Financial Intelligence Unit received reports of 54.5 million dollars in illegal purchases of military equipment, an amount that was later laundered in the national financial and banking system.

According to analysts, the continued cases of illegal arms-dealing are due, firstly, to the justice system’s failure to effectively deal with those who participated in the shady business during the corruption-riddled Fujimori administration (1990-2000), and secondly to the fact that the corrupt arms-dealing system left in place by the Fujimori regime was never completely dismantled.

One example that clearly illustrates this is the activity of Israeli arms dealer Moshe Rothschild.

Wanted in Peru, where he is accused of illicit sales of up to 700 million dollars in equipment ranging from telephone tapping devices to MiG-29 fighter planes, Rothschild nevertheless is living a peaceful life in Tel Aviv, Israel without apparently worrying about the legal troubles he faces in South America.

Far from showing concern about the five lawsuits he faces in Lima, he has actually called for recognition by the Peruvian government for his role in modernising the air force.

Meanwhile, his arms-dealing activities have continued.

In November 2004, two Sukhoi-25 planes of the Ivory Coast National Air Force bombed a French peacekeeping position in that West African country, killing nine French peacekeepers.

France demanded that the Israeli government and private Israeli arms merchants stop exporting weapons to the Ivory Coast in violation of the United Nations embargo on arms sales to that civil war-torn nation.

Rothschild, who is wanted in Peru, was among the arms dealers mentioned by France.

French intelligence found that Rothschild had sold the Ivory Coast Mi-25 helicopters and Sukhoi-25 planes from Belarus, one of his favourite sources of Russian- or Soviet-made war materiel, which he resells at a steep profit.

In 1996, Rothschild sold Peru 18 MiG-29’s from Belarus for 14 million dollars each. The following year, the United States bought identical MiG-29’s from Moldova at a cost of just 1.9 million dollars each.

But even more damning is the fact that although Moldova had originally offered the planes to Peru, the Fujimori regime preferred the offer from Belarus presented by Rothschild. The Peruvian justice system found that the arms dealer had shelled out bribes, and issued an international warrant for his arrest.

Army General Hugo Gonzáles testified in court that Fujimori had ordered him to buy Mi-17 helicopters, troop transport trucks and Antonov airplanes from Rothschild.

One of the five legal cases Rothschild has been facing since 2001 in the Peruvian courts involves the sale of 18 MiG-29 and 18 Sukhoi-25 planes, as well as parts, motors and radars, for 445 million dollars, between 1996 and 1998. The case has been dubbed locally as “the mother of all corruption cases”.

Nevertheless, when Judge Antonia Saquicuray was appointed to the case late last year, she was shocked to learn that although he had been wanted by the Peruvian courts for several years, the powerful Israeli arms dealer did not appear on the Interpol (international police) “most wanted” list.

In fact, the Lima Interpol office did not even have a photo of the man known in the Peruvian press as “El señor de los sobornos” (“the lord of the bribes”).

But even if Rothschild was captured in Israel, the Peruvian government would not be able to request that he be sent to Peru because the two countries have no extradition treaty.

Nor could Peru invoke the United Nations Convention against Corruption because Israel only signed the treaty on Nov. 29, 2005 and the legislature in that country has not yet ratified it. (The Peruvian Congress did so in 2003).

The Peruvian justice system’s inability to get its hands on the notorious Israeli arms dealer has enabled him to continue doing business, and he is likely to keep doing so in other poor countries caught up in civil wars.

Because of the judiciary’s lack of teeth, it also failed to secure the extradition of Rothschild’s business partner Enrique Benavides from Germany last year.

Benavides, who sold more than 300 million dollars in weapons during the Fujimori regime, has now turned his sights on war-torn Colombia, where he has offered parts and maintenance for the Mi-17 helicopters that Russia sold that country, at a much lower price than what Moscow is charging.

Like his Israeli partner, Benavides obtains supplies from the black market in countries that formed part of the Soviet Union until 1991 or belonged to the now-defunct Warsaw Pact.

Rothschild himself has set up phony front companies in Peru to continue selling Russian-made helicopters and planes.

Last year, the police were able to block a purchase of motors and parts for Mi-17 helicopters when it was discovered that the company supplying them was managed by a Russian woman working for Rothschild.

The arms dealers have once again been attracted to Peru by the creation of a National Defence Fund to modernise and upgrade Peru’s armed forces, with money from the royalties obtained from natural gas pumped in Camisea, the abundant gas fields located in Peru’s northern Amazon jungle region.

Over the next five years, the National Defence Fund will have 504 million dollars available for weapons purchases alone. And according to observers, it is not hard to guess who will be among the first to line up for a share of the juicy pie.

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