Sleeping With the Devil How Washington Sold Its Soul for Saudi Crude

We Deliver Anywhere Caesarea, Israel April 7, 2001 The marble Palace perched amid the olive trees above the sea looked like a lot of other posh resort hotels I'd seen around the Mediterranean. The shiny new Mercedes and canary yellow Ferrari parked out front fit right in. I knew that if I poked around a little, I'd find a casino somewhere on the premises. It didn't take me long, though, to notice that a couple things were out of place: the pack of little blond boys running around on the front lawn, shouting in Russian, and the young girls wearing identical bandeau bikinis, reading glossy Moscow weeklies by the pool. When the bellboy greeted me in Russian, I knew I had landed on one of those Russian beachheads I'd heard so much about. Since the collapse of the Soviet Union, the Russian mob, Russians fleeing the Russian mob, and just plain rich Russians had been setting up all along the Riviera, including Israel's coastline. The fancier the place, the better. Money never seemed to be a problem. And they liked to keep to themselves. I was actually in Caesarea to see a Russian, someone I'd known only by reputation. Yuri, as I will call him, was a merchant of death. He had made a colossal fortune in the early 1990s trading small arms for West African oil. Over the last several years, with capital under his belt and the free run of Russia's state-arms-trading firm, Rosvoorouzhenie, he'd branched out and started peddling arms everywhere. Supposedly, Yuri could put his hands on almost any piece of Russian hardware, from a MIG-31 to a T-80 main-battle tank. But he did have his professional ethics. When a competitor floated the rumor that Yuri was moving weapons-grade uranium, Yuri had him squashed like a Volga tick. It was one thing to earn an honest living fueling civil wars in West Africa, but something entirely different to deal in the nasty stuff. I saw Yuri come out of the elevator. Dressed in a pair of pressed Levi's, suede Italian loafers, and a diaphanous white linen shirt, he could have passed for a well-heeled tourist. Slim and sandy haired, he looked younger than his forty-five years. We settled in a restaurant where Yuri waited glumly for his coffee. My chitchat about the weather, Caesarea, whatever I could think of that might keep the conversation from sinking into silence, barely got a nod out of him. I stopped talking and took a closer look. His waxy yellow skin told me he hadn't been spending his time on the beach or the links. To judge by the spiderweb of broken blood vessels in his cheeks, he liked to relax with a bottle of vodka. My business with Yuri, if you want to call it that, was to do a favor for a friend who wanted to know if Yuri was interested in financing an oil contract, a perfectly legitimate one. My friend figured that the Russian, with all his loose cash, might want to get out of the arms trade and clean up his reputation. As soon as Yuri finished his second espresso, I popped the question. I was halfway through it when he held up his hand to stop me. "You're on your way to Syria, our friend tells me," he said. He was right. The next day I was flying to Amman, Jordan, and from there to Damascus. The borders between Syria and Israel had been closed ever since Israel's independence over half a century earlier. You had to touch down somewhere else before setting foot in Syria. "I'm in the market for Syrian oil," Yuri said. "I'll take as much as they'll give me. And you know what? I'll pay two dollars above market price." That was a curveball I hadn't seen coming. I didn't need to be a professional oil trader to understand that Yuri didn't have legitimate Syrian oil in mind--no one pays two dollars a barrel over world market for any oil. What Yuri was after, I had little doubt, was sanction-busting Iraqi oil, currently selling for a discount of ten to fifteen dollars a barrel in Syria.Baer, Robert is the author of 'Sleeping With the Devil How Washington Sold Its Soul for Saudi Crude', published 2003 under ISBN 9781400050215 and ISBN 1400050219.