Iran: Arms For the Ayatullah

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According to De Mello, a Brazilian citizen who is listed as president of R.R.C., most of the equipment purchased in the U.S. by his firm came from subcontractors who supply major American defense firms. Many of the sales aroused little attention because the equipment was of a type that also has civilian uses and thus can be sold legally under some interpretations of the vague U.S. trade rules. It included radar, navigational equipment and radio parts. When R.R.C. found that U.S. Customs officials rarely checked crates of this equipment, it began to address them openly to the Iranian air force. It also began to include in the crates such clearly banned items as spare parts for fighter planes, including engines and generators. The process became so easy, contends De Mello, that "after subcontractors sold parts to us two or three times, knowing they were being shipped to Iran, and saw that no one had been arrested, they began dealing directly themselves and cut us out."

One who did so was Don Rvocco, an American who owns Ramco International Inc., a major aviation-parts company in New Jersey. Once a supplier to De Mello and Hashemi, Rvocco began arming the Iranian air force directly, and currently has large contracts with it for the supply of U.S. spares and equipment. Ramco records show equipment being sent out of the country for Iranian air force C-130s, and last week U.S. authorities stopped Ramco electronics and aviation parts headed out of the country. Rvocco insists that he has shipped only legitimate dual-use supplies: "There is not a single transaction they can trace to us that is improper." Both De Mello and Hashemi are under investigation by federal agencies for their arms trading.

Customs officials admit they lack the expertise to identify military parts that are illegal to export. An agent in Washington reveals that for two years one U.S. firm sent crates marked TRACTOR ENGINES from Boston to Iran. Even though the crates had been inspected, it took a new inspector with military experience to note that the engines were equipped with superchargers. They were replacements for the engines used in U.S.-built M-60 tanks.

Even when a part number on invoices correctly identifies the material in a crate as a banned military item, Customs agents have no easy way of knowing it. The Treasury Department does not have a formal arrangement with the Defense Department to verify that the parts numbers are on lists of contraband items. Says a Customs agent in Washington: "Usually, I call a friend at the Pentagon and ask him to look up the numbers for me as a favor."

Parts that are easily identifiable, such as missile tubes and ammunition, are generally shipped under inaccurate labels to countries where inspection is nonexistent or lax. Among the favored destinations: Switzerland, Austria, Hong Kong, Singapore and The Netherlands. In Amsterdam, says an intelligence officer, "the stuff can arrive one night and be gone the next morning, and the boxes are never opened."