Andrew Feinstein, author, “The arms trade feeds off this cycle of profit”

Andrew Feinstein | adapted from © Control Arms (CC BY 2.0)

Andrew Feinstein is a campaigner, exANC MP, former Member of the National Assembly of South Africa and author of ‘The Shadow World: Inside the Global Arms Trade”. He spoke to IE about his experience of investigating the global arms trade; a world of high-stakes deals, bribery, corruption and technology that races ahead of politicians’ understanding and therefore regulation. 

Is it too simplistic to say the arms trade is looking to create a demand for its product?

The first thing to say is, that’s not unheard of at all. My understanding – of what we very glibly refer to as the Shadow World, and which we can be very simplistic about – is the system of trade in armaments that is controlled by what Lawrence Wilkerson refers to as the global national security elite.

So, senior politicians – and this crosses many political parties – senior military leaders, senior intelligence leaders, senior executives at the world’s large defence manufacturers, and a huge variety of intermediaries, ranging from what we call arms dealers, agents, or brokers, depending on their specific role, but also much more formal and much bigger intermediaries.

The world’s biggest banks charge massive premiums and are financiers of arms deals – which is a form of profiteering in and of itself. And there are certain banks who have a very important revenue flow that is derived from their involvement in licit and illicit arms deals. But it includes the big legal firms, the big auditing firms, the big consulting firms, all of these people benefit from significant arms transactions.

And we should, you know, the starting point of all of this is that the arms trade accounts for 40% of all corruption in all global trade. Now, this is an industry that is worth on average, about $400 billion a year. So, for it to count for 40% [of corruption], of all world trade is just, I mean, it’s mind boggling.

So, this is a mechanism to keep monies flowing. And it particularly keeps monies flowing within the political processes. The US produces just over 40% of all weapons in the world. The way it does this is through a system of legalised bribery: we can identify how much each of the big defence contractors gives to each politician seeking election, and how many billions of dollars of projects they return to those same companies.

It is as crude and as simplistic and as basic as that.

And we can see the senior generals who leave the Pentagon on retirement and go into senior executive positions at one of the big defence contractors to whom they’ve been giving contracts throughout their careers in the Pentagon, and they get a massive signing-on bonus, the sort of the ‘golden handshake’ approach. Now, this is their bribe for giving these companies the contract. But in the United States of America, all of this is legal.

In Europe and the UK, it’s not. But it happens on an even greater scale. Because the other thing to bear in mind is that Europe and the UK are involved in far more corruption in the arms trade than the American defence contractors. And why is that?

Because the Americans have a massive economies of scale advantage. So, you know, when they produce an F35, the Pentagon is immediately ordering hundreds, if not thousands of the jets.

The Europeans whose equipment is not as desirable as the American/Israelis – because Israel plays a very important role in the American defence contracting industry as well – the only advantage the Europeans and the British have is the scale of bribery.

Is it possible that conflict or tensions have been heightened? For purposes of profit? Yes. Is it often the primary way, or the primary motivation for tensions and conflicts to arise, in my opinion no, but it is certainly a contributory factor.

I would argue at the moment, one of the reasons that there is so little desire amongst anyone to resolve the conflict in Yemen, is because so many people are making so much money out of the conflict.

The system of bribery talked about in Europe, in which you have two different nations states, both buying weapons from the west, is this common?

Where I stopped the Shadow World book is with the first of the modern arms dealers, a guy called Basil Zaharoff. His first arms deal was at the age of 21. He sold the prototypes of what would become submarines to the Greek government – his home government – which he claimed was a huge patriotic gesture. But what did he do a few weeks later?

He sold the same prototypes to Turkey. And that’s how he always did business. And he would pride himself on it. And he would talk about how he would sell to both sides in a conflict.

In some ways, that makes the defence business model from, I suppose, a narrow, neo-liberal, economic perspective, the ultimate business model; because you can create demand by fuelling conflict, or where there is nascent conflict, by ensuring its continuation, its severity. And you’ve got two customers. Yes, so they’re enemies who cares?

And then our governments – we do this all the time I would argue, and this is a much bigger point – that so-called Western foreign policy at the moment is based on a similar sort of model.

Who do we sell most of our weapons to? Saudi Arabia. Who is the biggest ideological proponent of the most – and I use these words, very cautiously – extreme version of Islamism that we launched this interminable war on terror to fight? Saudi Wahhabi Islam. Who were the biggest financiers and armers of the so-called extremist groups? Saudi Arabia.

That’s how completely absurd and self-fulfilling in some ways, our basic foreign policy assumptions are. So, I think the arms trade feeds off this sort of cycle of profit, or cynical cycle of profit as someone called it in a meeting the other day. So, you know, I think selling to both sides. Very, very common.

So, it’s not illegal, but it’s legalised?

In terms of arms exports, there are two levels of legality. One is arms export controls, either in the two countries involved, or in terms of the International Arms Trade Treaty or the EU common position, if it’s two EU countries.

Is the deal legal in terms of those laws and regulations or treaties? And usually, most government-to-government arms deals conform to that level of legality.

So, I would argue that a deal that didn’t, would be for instance, British or German sales to Saudi Arabia of equipment that we know is being used in Yemen.

Those violate the EU common position. They violate both German and British arms export control legislation, and they violate the international Arms Trade Treaty.

None of these things are properly enforceable. Because national security can be invoked to bypass any of those laws or agreements. That’s why when you’re dealing with the arms trade, you’re dealing with a very unique trade. It operates in its own legal universe because it has this ‘get out of jail’ clause.

We’ve been looking at joint European projects, what can you tell us about those?

In any of those Pan-European systems the space for corruption is increased virtually by the number of countries involved.

Ultimately, what they boil down to is the use of arms deals to syphon money back into the party for electoral purposes. And this is something that also happens in less conventionally democratic countries.

And with these joint projects are we really clear of the implications of what’s being created?

What we would call emerging technologies -and while drones now feel quite old-hat to us given the various types of AI weapons systems that are the future – it really started with drones. And there was one big difference. Drone technology, just like AI technology is being driven more by the commercial actors than by governments. And that means that government is always years behind with regulation, because they don’t actually understand the technology very well.

And we saw that with drones in the early years. There were a whole lot of capabilities being put into drones, that if you took the conventional weapons regulation, and converted it to the technology that was being used in drones, these would have been things that would have been regulated, but because it was a new form of technology, the governments didn’t understand as they weren’t developing it. It wasn’t regulated.