Pentagon secretly buys Russian missile system

December 24, 1994|By New York Times News Service

WASHINGTON -- A company whose chairman was President Ronald Reagan's defense secretary teamed up with a Canadian arms dealer and some enterprising officials in the former Soviet republic of Belarus in a most unusual arms deal, financed in secret by the Pentagon.

The deal came to light when the sun rose on Monday morning on a huge Russian-made transport plane parked within sight of an interstate highway in Huntsville, Ala.

Its cargo: components of the S-300, the Russian equivalent of the Patriot missile defense system. The buyer: the Defense Intelligence Agency, the Pentagon's chief military intelligence branch.

The broker: a company called BDM International, whose chairman is one of Washington's most powerful government officials-turned-businessmen, Frank Carlucci, a former secretary of defense and national security adviser.

The operation to obtain the S-300 was a secret mission paid for with classified financing, said government officials, arms dealers and defense analysts.

It began two years ago when BDM, based in McLean, Va., won a lucrative and secret Pentagon competition to acquire the S-300 for U.S. intelligence agencies, which want to study the weapons system.

The effort to obtain the S-300 illustrates the workings of an arcane part of the Pentagon, in which private companies and intelligence operatives overseas try to take the "opportunity to acquire and exploit major, state-of-the-art weapons systems," as Keith Hall, the deputy assistant secretary of defense for intelligence, told Congress last year.

BDM's majority owner is the Carlyle Group, an investment company whose principals include Mr. Carlucci and James A. Baker III, former secretary of state, treasury secretary and White House chief of staff.

The Carlyle Group, a kind of investment boutique, put its deals together with a blend of businessmen and former top government officials, including Richard Darman, Reagan's NTC budget director, and David Rubenstein from the Carter White House.

BDM's ally in the Russian arms deal was Emmanuel Weigensberg, a well-known Canadian arms merchant, fellow arms dealers say. He was the broker for the Reagan administration's first secret shipment of weapons to Nicaraguan rebels a decade ago.

The Defense Department expanded its effort to buy sophisticated arms made by the former Soviet Union after the failed coup by hard-line Communists in Moscow in August 1991.

This week a Russian-made An-124 aircraft delivered its cargo -- components of an S-300, defense analysts and a Pentagon official said -- to the Defense Intelligence Agency's Missile and Space Intelligence Center in Huntsville.

The system includes a missile launcher, radars and missiles. Its list price is $128 million, but better deals are available, and BDM apparently got one by acquiring components in Belarus.

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