Special for Infobae of New York Times.
EUREKA, Missouri — After falling out with his partner at a limousine company in suburban St. Louis, Martin Zlatev recently pursued a lucrative new business opportunity: selling $30 million worth of rockets, grenade launchers and ammunition to the Ukrainian military.
Zlatev and his new partner, a local osteopath, made their first steps in buying and selling weapons internationally. Contract documents and other records obtained by The New York Times show the deal relied on layers of middlemen and shipping across seven countries. And it exists in a legal gray area designed to circumvent rules on exporting weapons from other countries.
“Time is of the essence,” the pair recently wrote to the Ukrainian Defense Ministry. They described a plan to sell US, Bulgarian and Bosnian weapons to Ukraine.
Since the Russian invasion in February, the administration of President Joe Biden has quietly expedited the approval of hundreds of millions of dollars in private arms sales to Ukraine, cutting the process from weeks to a few hours. In just the first four months of the year — the latest data available — the State Department authorized more than $300 million in private deals with Ukraine, government documents show. For all of fiscal year 2021, the department authorized less than $15 million of such sales to Ukraine.
This has helped open another flow of weapons to the Ukrainian front lines, but it has also seduced players like Zlatev and his partner, Heather Gjorgjievski, into a shadowy market. Guns sold through private dealers are much more likely to end up on the black market and resurface in the hands of America’s adversaries, according to government advisers and academics who have studied the trade. Recent experience in Afghanistan and Syria shows that, without strict tracing policies, weapons can end up with terrorist groups or hostile military forces.
This private arms sale pales in comparison to the more than $17.5 billion worth of machine guns, anti-tank missiles and other security aid the White House has sent to Ukraine. However, those agreements have strict tracing requirements so that it can be guaranteed that the weapons reach the hands of the desired people. Private sales have less supervision. Sellers, buyers, and guns are kept out of public scrutiny.
Just as it has cut the approval time for deals to less than a day, the State Department has also sped up the registration process for new gun dealers.
“Usually it is a process that takes 60 days,” Zlatev wrote in a letter to the Ukrainian Defense Ministry. “They approved us in seven days.”
On a recent Tuesday, at his home on a dead-end street in a suburban neighborhood, Zlatev, 45, answered the door and denied knowledge of any deals to sell weapons. “I don’t know what they’re talking about,” he said when presented with copies of contracts drawn up by his company to sell rockets, grenade launchers and bullets to the Ukrainian Defense Ministry.
Leaving his doctor’s office that day, Gjorgjievski, 46, acknowledged that he was aware of the settlement but did not want to discuss it.
Richard El-Rassy, the lawyer for Zlatev’s company, later sent an email in which he explained that the company was seeking to “facilitate potential purchase and sale transactions of defense products with foreign allied nations.” El-Rassy mentioned that the State Department had approved the company’s request to go ahead with a deal.
On a typical commission for a gun dealer, the pair would walk away with more than $2 million.
Records show that the deal was in its final stages and both parties had reviewed and amended the contract.
However, after the Times asked El-Rassy and the Ukrainian government why the deal relied on falsified documents to evade international export laws, the lawyer sent a new statement saying the deal was off. Both Bosnia and Bulgaria, two key sources of arms in the deal, have publicly stated that they do not allow arms exports to Ukraine.
The Biden administration promotes deals with the private sector for several reasons. He spares the Pentagon further depletion of its own stockpile after months of sending weapons to Ukraine. In addition, private sellers can provide weapons that the government cannot: like the Soviet-style weapons already used by Ukrainian soldiers.
Not all private sales carry the same risks. For example, foreign governments often buy weapons from major US defense contractors. Deals like the one Zlatev proposed are different. Instead of selling directly, they involve arms sales from other countries, with various intermediaries between the parties.
Records show that Zlatev and Gjorgjievski planned to supply Ukraine with US-produced bullets, as well as weapons from Bulgaria and Bosnia.
Each of the many intermediaries in the deal is a point where weapons can be diverted, experts say. This happens quite a lot when deals are made with countries like Ukraine and Bulgaria that suffer from well-documented corruption and black-market weapons flowing unchecked.
“All the risks — diversion, escalation, corruption — are magnified by the fact that we don’t have visibility into those private sector deals,” said Elias Yousif, a senior fellow at the Stimson Center, a Washington think tank that studies the arms trade. “This entire economy that exists in that gray area across borders and with people with questionable motives is being fostered.”
Although lawyers say they have seen an influx of new traders, a State Department spokesperson said the agency had not collected data for 2022 to confirm this. However, the spokesman mentioned that the arms deals that had been made like the ones Zlatev proposed represent a small fraction of the arms trade authorized by the United States.
The State Department has a tracking program that examines a portion of the deals, looking for weapons diversion risks, among other issues. Of the 19,125 export requests the department authorized in fiscal year 2021, the tracking program identified 281.
Zlatev, who is originally from Bulgaria, entered the arms business last December during a time of danger at home and abroad. Russian soldiers were amassing near the Ukrainian border. The pandemic destroyed business travel to St. Louis, which killed the limousine industry, and Zlatev had a disagreement with his partner.
Zlatev decided that the headquarters of his business, BMI US LLC, would be Eureka, a small town outside of St. Louis. The company shares an address with a firearms training center, next door to a Mexican restaurant. One trainer said Zlatev rents the space because federal regulations require some gun dealers to have a physical address.
Corporate documents filed later show that Gjorgjievski is a partner. BMI’s letterhead has sights on the “I”.
The timing was perfect. The Ukrainian authorities soon scoured the world for weapons, hastily spending whatever was needed to prop up the vanguards. For example, a Ukrainian state-owned company began contacting American arms dealers, wanting to buy Soviet-style tanks, mortars and MiG-29 fighter jets, according to letters obtained by the Times.
The documents show that the US side of the BMI deal was relatively clear. Once the Ukrainian government deposited some $25 million into the company’s Bank of America account, BMI would pay a middleman to buy $2.2 million worth of rounds of surplus US military munitions and airlift them. to Poland. From there, the bullets would arrive by truck in Ukraine.
On the other hand, BMI was to buy 540 anti-tank self-propelled grenade launchers and 22 mortars from a Bosnian producer. These weapons were to travel in a truck convoy through Croatia, Slovenia, Austria, Slovakia and Poland to the Ukrainian border, according to deal documents.
Zlatev also planned to send 900 air-to-surface rockets from Bulgaria, through Poland, to the Ukraine.
The bullets, rockets, mortars and grenade launchers that Zlatev planned to send were unlikely to significantly tilt the war in favor of Ukraine, Yousif, the researcher, said. However, the process of setting up brokers, trade routes and agents with forged documents could have a lasting impact.
According to Yousif, once the war is over, Ukraine could become a center for black market arms sales: “The illicit market will come from this country for the next 30 years, as it did after the Cold War.”