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Military Surplus Parts Illegally Find Their Way to Iran, U.S. Officials Say

By Sharon Theimer
Associated Press
Monday, January 22, 2007

Fighter-jet parts and other sensitive U.S. military gear seized from front companies for Iran and brokers for China have been traced in criminal cases to a surprising source: the Pentagon.

In one case, federal investigators said, contraband purchased in Defense Department surplus auctions was delivered to Iran, a country President Bush has branded part of an "axis of evil."

In that instance, a Pakistani arms broker convicted of exporting U.S. missile parts to Iran resumed business after his release from prison. He purchased Chinook helicopter engine parts for Iran from a U.S. company that had bought them in a Pentagon surplus sale. U.S. Immigration and Customs Enforcement agents say those parts reached Iran.

Sensitive military surplus items are supposed to be demilitarized or "de-milled" -- rendered useless for military purposes -- or, if auctioned, sold only to buyers who promise to obey U.S. arms embargoes, export controls and other laws.

Yet the surplus sales can operate like a supermarket for arms dealers.

"Right Item, Right Time, Right Place, Right Price, Every Time. Best Value Solutions for America's Warfighters," the Defense Reutilization and Marketing Service says on its Web site, calling itself "the place to obtain original U.S. Government surplus property."

Federal investigators are increasingly anxious that a top priority on Iran's shopping list is within its easy reach: parts for the precious fleet of F-14 Tomcat fighter jets the United States allowed Iran to buy in the 1970s when it was an ally.

In one case, convicted middlemen for Iran bought Tomcat parts from the Defense Department's surplus division. Customs agents confiscated them and returned them to the Pentagon, which sold them again -- customs evidence tags still attached -- to another buyer, a suspected broker for Iran.

"That would be evidence of a significant breakdown, in my view, in controls and processes," said Greg Kutz, the Government Accountability Office's head of special investigations. "It shouldn't happen the first time, let alone the second time."

A Defense Department official, Frederick N. Baillie, said his Pentagon unit followed procedures.

"The fact that those individuals chose to violate the law and the fact that the customs people caught them really indicates that the process is working," said Baillie, the Defense Logistics Agency's executive director of distribution and revitalization policy. "Customs is supposed to check all exports to make sure that all the appropriate certifications and licenses had been granted."

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