Viktor Bout: Merchant of death

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1:20This is Good Bad Billionaire. I'm Simon Jack. And I'm Zing Zing. Each episode we pick a billionaire, find out how they got so incredibly rich, and then we judge them. Are they good, bad or just another billionaire?

1:37And this week we have, this is a murky one in many ways, morally murky. Murky on detail. We don't even know for sure where this guy was born. Yeah, he's kind of a man of mystery who has also at times been called the merchant of death. Sanctions buster, lord of war, merchant of death. Played by Nicolas Cage in a very shoddy sort of biopic. His fortune when he was arrested, a story we'll get to in due course, he was worth$6 billion. And he even has a villain's moustache to match. It looks like a cross between Freddie Mercury and Tom Selleck. And he is called Victor Boot, arms dealer, I was going to say to the stars, but in fact arms dealer to just about anyone.

2:20Including some very unsavoury characters, warlords, dictators, terrorists apparently. If he was doing this as a regular businessman and he wasn't selling arms, some people say he would be considered one of the great businessmen ever. I think actually one US official even called him the Bill Gates of arms trafficking. Or even another comparison I heard, he was the McDonald's of arms traffickers. He also claims he can read in 16 languages and speak five or six fluently. In many ways, he's the kind of person you want to be your friend. He can get you anything, anytime, anywhere. At any price. And it's that price which, of course, made him a billionaire.

2:58And as we've discussed before, Zing, the thing about billionaires, very few people get very rich without giving us something we either want, value or need. And in some cases, that includes weapons. And we're talking really high-grade weapons, AK-47s, military helicopters, surface-to-air missiles. Victor Boot did it all. and the number of deaths that he's implicated in or may have directly caused, it's uncountable. I mean, it's impossible to know how many people died at the hands of weaponry that he supplied to anybody. It's a difficult one, this, because we like to have a kind of lighthearted canter through people's lives.

3:35This one's a tough one. It's murky both on its morality. It's murky in its detail. It's deadly in its consequences. But let's have a look through his life.

3:47so let's start at the beginning and this is actually more difficult than most episodes because as we already said we're not exactly sure where he was born but we think it was in Tajikistan yes so he has a Russian passport that says he was born in Tajikistan in 1967 which was then part of the Soviet Union but one said that he was born in Turkmenistan African intelligence lists him as someone who's Ukrainian. I mean... Yeah, that's the kind of multiple identities I suppose you need in this particular line of work. Although he doesn't like to be in the limelight, he does actually give his own version of his own story.

4:24Maybe a selective telling, but he has spoken to the New York Times, for example. And his friends and associates have spoken to documentary filmmakers. But of course, a lot of what we do know of the more unsavoury stuff, which he denies, is from international sources like the UN, Interpol, the CIA and MI6 and independent investigators. What's interesting about Victor's life is that it also takes place against this huge sweep of world history, right? The USSR and then the crumbling of the Soviet Union. So this does really read like a bit of a spy thriller with some chilling results at the end, but some fascinating facts along the way.

5:00What we do know about his childhood is that he was born to a bookkeeper mother and his dad was a car mechanic. He had an older brother called Sergei who eventually went into business with him and described him as a guy who was always full of ideas, always the centre of attention. He was a polyglot, a really talented linguist, spoke loads of languages, including Esperanto and learned English from odd sources. Mainly listening to ABBA and Chicago records. I'm trying to think of all the ABBA and Chicago records. Being Without You, It's a Hard Habit to Break. That was a big Chicago hit. Anyway, of little use conducting an arms deal, one would have thought.

5:38Apart from the winner takes it all, maybe. And of course, the famous song Money. Money, money, money. So in school, it sounds like a normal kid. He was playing volleyball. He travelled around the Soviet Union to compete in that. But like many teenagers, he quit when he got interested in girls. And at age 18, he was conscripted into the Soviet army, spending two years with an infantry brigade in Western Ukraine. and then spent some time with the Soviet Military Institute of Foreign Languages, which proved to be quite an important part of his story. Because the Institute has been described as kind of a breeding ground for Soviet intelligence officers.

6:15It also is the place where he learned to speak so many different languages, which apparently includes ones like Portuguese, French, Farsi, Zulu. Very useful for an international businessman, especially if you're trying to sell arms to people all over the world. Yeah, and former CIA officers claimed he worked for the Soviet Foreign Military Intelligent Directorate, or the GRU as it's commonly known. For those who are listening and can't quite place what the GRU is, you can think of it as a kind of Soviet version of the Defence Intelligence Agency in the US. And most famously, they were implicated during the Salisbury poisoning in 2018, which of course is when a former Russian intelligence officer got poisoned with Novichok.

6:57Yeah, I don't think he's ever going to sue us, but we might be looking over our shoulders for the rest of our lives. Well, I would caution people not to pick up any cigarettes they find in the street. So when the USSR was still going, he was leaving the Institute for Languages and was working as a lieutenant in the aviation regiment as a translator. And it's at the Soviet embassy he meets Allah. She then leaves her husband and then marries him in Moscow and describes him as a very active, energetic person. And, you know, he kind of drags you in. I was actually really interested to hear what a former business associate who got burned by boot.

7:33She said he doesn't come off as a crook. He could charm you in seven or eight languages. And this is a guy who's, you know, in his 20s. And then the Soviet Union collapses in 1991. And that set off a string of events where former state owned assets ended up in private hands. They were kind of, some would say, stolen from the state, from the people. They've described what happened after that as a kleptocracy, a sort of society based on thieves, which created a lot of billionaires. I mean, there'll be other ones on our list. In a way, there was this kind of gold rush or land grab for these assets, incredibly valuable assets, because Russia had a lot of very valuable things, steel, coal, you name it.

8:15But they also, of course, were a massive military superpower. So there was a lot of military kit which was lying around, which no one quite had tabs on in the chaos that ensued after the collapse of the Soviet Union. That's where he steps in. And it isn't just, you know, military kit that's been left lying around when the Soviet Union collapses. It's also aeroplanes. So the entire Russian air fleet is kind of just lying around, open for the taking. There's also thousands of pilots and crew members who are suddenly jobless. And he steps into that void and starts importing goods into Russia. So he starts out as a legit cargo business.

8:51In a sense, actually, he was just a courier in many ways. And it wasn't military in the first instance. It was all manner of things that people wanted. He just had the delivery mechanism by buying all these wheezing old Soviet aircraft. The one thing that people do say is that it's quite unusual for a 25-year-old to buy three cargo aircraft for$120 ,000. just magic out of thin air in order to start a business. And it's why there's a theory from some former associate of his that the GRU was the one who gave him the aeroplanes to set up the business. Which suggests they think he might be useful in some way in the future.

9:26But there was a quote from him at the time saying, you know, you talk about$120 ,000. He said it was never difficult finding money. There was a lot of money floating around at that time and it was a pretty lawless environment. Having bought his first aeroplanes at 25, He then moves to the United Arab Emirates where he said there was practically no law at all. So it was a lawless environment in which he thrived. Conveniently, it was also home to many newly rich Russians who had started accumulating all this money in the collapse of the Soviet Union. And they were flocking to places like Dubai to shop duty free.

10:01Thanks to a billionaire we talked about in a previous episode, Chuck Feeney, the founder of DFS. And Victor was flying all of that duty-free goods back to Russia for a premium. And then around this time, he actually gets a bit more organised. He sets up an air freight business called Aircess with this small fleet of Russian planes that he's acquired. And his brother, Sergei, joins the business at this point. And he claims that at the time it was mostly consumer goods, textiles, computers, TVs, boomboxes, all the decadent items of the West that people in Russia were denied for so long. That's right.

10:35This would have been the same time that McDonald's were opening in Red Square and there was this sudden appetite and this sudden ability for people who'd been behind the Iron Curtain for a long time to get some of the Western goods that they hadn't been able to get their hands on before. And Boot was very busy with work. He actually missed the birth of his daughter. His wife says that at the time she couldn't remember the meaning of the word weekend. And it becomes a leading air freight company. SS owns almost 30 aircraft. It employs 300 people. And in a documentary, Victor claims that by 1997, at 25, I was a millionaire.

11:12By 30, I had an empire. OK, so we do this in stages. We go from zero to a million. And he very helpfully tells us himself that by 25, he was a millionaire.

11:26So he's going to have to really amp up SS in order to make that first billion. And he does it in a way that a lot of people will find deeply unsavoury. So at the age of 28, Victor Booth makes his first arms deal. Yeah, and I suppose we should say that, you know, arms dealing is not the preserve of murky criminals. It is something that other countries do. I mean, the US is an arms dealer. The UK is an arms dealer. France is an arms dealer. We all have big companies, Thales in France, BAE here in the UK. You've got Hughes Electronics. Boeing have a military division. War is big business. And in fact, that's one of the reasons people often used to refer in my world as the business editor, I remember this, as the military industrial complex.

12:15It's big business. Because it is an industry in and of itself. Yeah. And, you know, that's why sometimes they say war is good for GDP. You produce quite a lot of stuff. If you go way back in Russia's history, for example, a lot of people say that the productivity and the economy of Russia grew fantastically quickly during Stalin because he militarized Russia in the aftermath of the Second World War. So wherever you go in the world, military and war is big business and often accelerates economies. But obviously there are massive downsides to it as well. And it also means that if you're making all this machinery, you need people to transport it, right?

12:55Right, exactly. I mean, you've got to get them to the right people. Well, I say the right people, probably you've got to get it to the people who need it. And those are often the wrong people. And that was his incredible skill and gift. At this time, you know, in the mid 90s, he's a logistics and a transport guy. He's like Deliveroo, basically. He'll get you whatever you want. And it's that time that basically he inspired an opportunity in the weapons market. So two people came in, which became important to establishing his reputation as the world's most notorious arms dealer. And Victor Boot, before this point, you know, has only really moved non-interesting, if you want to put it that way, cargo, flowers, food, TVs, boom boxes.

13:37but he gets an unusual customer. A guy called Ahmad Shah Massoud who is an Afghan military commander comes to him and says hey we need guns to defend ourselves against the Taliban but Victor Boot doesn't actually have these guns. Okay so the ultimate fixer needs a fixer and at that point he now needs a weapons guy. Fortunately someone had recently given the number of a guy called Peter Merchef, a Bulgarian arms broker. And they meet up in Sofia in Bulgaria and he said of Victor you know The guy's a fast learner and he's very easy with the contacts. He can reach the right people at any time. So that network that he built in the wake of the Soviet Union, shipping things like computers and boom boxes and gladiolies, that came in very useful when it came to transporting things like 500 AK-47s, for instance.

14:26He's like a combination between sort of Del Boy and like the ultimate international fixer. He can open doors. Sounds like he's a charming salesman. Exactly. And, you know, I guess the time spent in the Institute of Language has helped as well, because if you can speak to someone in their own native language, God knows that's going to give you a business advantage. Yeah. But the problem is, is that there are rules around when it comes to arms, which he's now moving into, where there are people who are allowed to buy weapons and arms and people who aren't. And this is where he becomes very proficient at, he does two things really, has a whole network of different companies and no one quite knows who's involved.

15:06And also he becomes expert at forging these things called end user certificates. This proves to be really, really important. Right. And they are basically these kind of certificates that say I can buy these arms from a certain seller. If you want to have a legitimate transaction, you require this end user certificate. But what Boot was doing was he was just straight up forging these ones. Yeah, one country would be allowed to buy them like a Zaire, for example, might be on the list of saying that's OK. But another country like the Democratic Republic of Congo might be not on the list in that he would do the old switcheroo and the arms that were supposed to be going to country A ended up with country or dictator B.

15:46And he was also very proficient at making sure his planes were difficult to trace. I think one of the things that I found out about him was that he was painting over the tail numbers of his planes. So in his ground crews did it so often that they ended up using water-based emulsion to make it easier to paint over. That's incredible. So basically we're saying we're going to have to do this so many times. We don't want the paint layer on the tail fin to be too thick. That might even interfere with the aerodynamics of the plane itself. I mean, he was, people have said that, you know, if he was in any other business, he would be lauded as a entrepreneurial business person who could pivot in many different ways.

16:26It's kind of odd, isn't it, where the same traits where the same traits that would make you enormously successful in a legitimate business are the ones that also make you enormously successful in businesses that end up killing thousands of people. Well, what we did learn is he wasn't very choosy about his customers and sometimes would be backing both sides in a single conflict. I mean, he sold to basically everyone and anyone. So, for instance, in Angola, he was selling to both the rebel and the government troops. And the thing that really surprised me is lots of times people knew. So his clients knew that he was running guns to both sides of a conflict.

17:02But I guess that old, you know, saying you never shoot the postman applies here, right? If he's the only one who can get you the military helicopter you want, you're probably going to turn a blind eye to him supplying the same military helicopter to your enemy. Yeah. And also for him, it works out brilliantly because both sides know they're in a bidding war against the other side. And he's the middleman. And basically, they're going to up the ante on both sides. He can't lose. In many ways, he's created this perfect environment where he has the monopoly. So his business is thriving. He's expanding his air freight operations.

17:33He's got kind of nodes in his network in South Africa, Ostend, Belgium, Odessa, Ukraine. His fleet is crisscrossing Africa and is getting involved in some seriously gruesome conflicts in Sierra Leone, Rwanda, Liberia, the Congo, Angola. You know, in these deals, he's sometimes not even paid in cash. One thing I read is that the dictator Charles Taylor actually paid him in diamonds. Yeah. So at one point, Victor Boot was hiring a gemologist to accompany him on all these deals to make sure he was getting his money's worth. Or to look through the little, what do they call it, a loop to look at the diamonds?

18:08I just call it the little magnifying glass in film. The little magnifying glass, yeah. And, you know, these are really gruesome conflicts and we shouldn't lose sight of that. You know, millions of people dying, injured, maimed, their amputations. I mean, I remember looking at the news towards the end of the 90s and into the noughties. What was going on in the DRC, Rwanda, etc., was really almost unbelievably horrific. And Victor Boot was at the centre of all of this. I mean, in a conflict like Angola, he was supplying something like 20 ,000 mortar bombs, 6 ,000 anti-tank rockets, 1 ,000 rocket launchers.

18:43You know, these are amounts of weaponry that went on to kill a whole lot of people. Yeah, between half a million and 800 ,000 people were killed, four million displaced, some of the estimates, 70 ,000 amputees as a result of landmines, which he may or may not have supplied. But he was in that business and didn't mind which side of the conflict he was supplying. And it made him really, really rich. I mean, I think there's one incident in 1997. He's kind of in his, I think he's 30 at this point. And he's paid$3 million for a mansion in Johannesburg with two swimming pools, waterfalls, a guest house, and 26 private security guards and 15 foot walls.

19:23So he's clearly rich and living it up, but he's got a target on his back. Yeah. And then came the incident that no one who watched it will ever forget, which was 9-11. That changed the weather on international travel, international terrorism. It defined a new era of particularly US involvement in international affairs. And it was also at this point where the US starts getting very interested in what they call transnational security threats, which you could easily classify someone like Victor Boot as one because he's flying all these planes and weapons to conflicts all over the world. And it's then that his fortunes start turning.

20:00Yeah, the microscope on all of these different kind of organisations becomes that much more intense. He's kind of been living in the shadows up to now. And now he sort of slightly comes out of the shadows, not willingly, but because of increased scrutiny by people like the CIA, Department of Homeland Security, other, the Five Eyes, Australia, New Zealand, US, UK, whatever, suddenly start thinking, where are these weapons coming from? Where are they going to and from? And that's when he, in a way, becomes, well, if not target number one, pretty close to it. He went on to say at that time that he woke up after 9-11 and found that he was considered second only to Osama in terms of national security threats.

20:43And journalists were calling him the biggest arms supplier to al-Qaeda and Osama bin Laden. Yeah, which is something that he's always questioned. He's always disputed whether he dealt with al-Qaeda and Osama bin Laden. He's never admitted that. Some of his defence goes along the lines of, I am just the postman. You know, I am just a person carrying the cargo. You can't possibly expect me to take responsibility for what any of the stuff does. It's not in my job description. That's always been his defence. And that's always been the defence of his brother, Sergei, as well. Yeah, that's a bit like the kind of guns don't kill people, people kill people.

21:19Exactly. Which is the NRA line on this one. Anyway, tension of Western governments definitely bearing down on him now. And in 2002, it's the Belgian government, which we know already he's got assets in Belgium through his Air Courier network. And the Belgian government issues an international arrest warrant. And that was for money laundering. It's interesting that it's for money laundering and not for any of the other stuff that he's apparently done. That's often the way. I think it was Al Capone who got done for mail fraud rather than sort of killing people. You know, you get someone on the technicality sometimes, and that still happens in the US to this day.

21:55You'll get people on things like wire fraud, mail fraud, which actually is, you know, code for something much more serious and much more, you know, but easier to prove. Right. That makes sense. And at this point, he's basically got a target on his back. he's gotten so well known this guy who was once so in the shadows that in 2005 there's a Nicolas Cage movie based on his life called Lord of War which comes out. At this point he's moved to Moscow. Listen we know he's on the radar of western governments and we know that he's considered to be a top 10 most wanted kind of person around the world so these governments cook up a sting.

22:35So six years after the Belgian government issues this international arrest warrant he gets apprehended in a sting in Bangkok. So DEA agents, and that stands for Drug Enforcement Agency, they pose as potential buyers from a guerrilla group called FARC. So in case you're not familiar with FARC... That's F-A-R-C for anyone who's listening, by the way. Just for anyone who thought that I said the bad word. They were engaged in a large-scale military operation against the Colombian government for decades. So these DEA agents are posing as guerrillas in Bangkok. A pretty credible run-of-the-mill customer for someone like Victor.