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TIME traced one secret multimillion-dollar sale of osmium 187, a by-product of nuclear reactors that is not weapons related but is an extremely expensive metal with applications in nuclear-energy production. The middlemen in the deal included a former party official and a member of the KGB, who acquired the element worth $40,000 a gram from the factory and sold it to a Swedish company for $70,000 -- though it is not clear whether the profits went into private pockets or the depleted coffers of the KGB.
DOING A DEAL
One three-day jaunt to an isolated military factory city, where my traveling companion initiated a multimillion-dollar weapons-system purchase, shows how the system operates. Only a promise of confidentiality precludes revealing exactly what weapons were for sale.
The Siberian factory director, his thick fingers playing with the end of his tie, eyed his two foreign visitors carefully and then leaned back in his chair to listen to the international businessman. An outsize copper relief of Lenin hanging on the wall behind him provided the only splash of color in an office that probably saw its best days about the time Sputnik was launched.
Yes, his factory made the system my companion was interested in, even though the particular production lines were temporarily shut down. But why, demanded the factory director, had we come to the far reaches of Russia, when a certain East European country had similar units for sale? The answer established my companion's bona fides: his client, a Middle East country, wanted to buy those very units and after months of negotiation reached a satisfactory price. But a shuffle of ministers ushered in a new set of officials, who also demanded to be cut in on the deal, making the price too high.
The manager nodded as if he knew this all along. "We could supply those items for perhaps $6.5 million a unit, including spares," he offered. My companion said he had $5 million in mind. But if the Russian-built weapons had the latest navigation and guidance systems, his Middle East buyer might be willing to pay more.
"I will call Moscow," the factory manager said, glancing at the yellow telephone on his desk. The special vertushka phone network still connects industrial managers across the 11 time zones of the former Soviet Union with the new nomenklatura -- the unofficial network of bureaucrats, former party elites and military officers -- neatly bypassing political leaders in Moscow who might attempt to stand in the way of deals such as this.
In less than 24 hours, authorities in Moscow gave the green light for the factory to resume production of my companion's desired items. There was only / one hitch: because of delicate political considerations involving a large sale to an Islamic client, the factory director explained, Moscow would prefer to create the appearance that a private company in Slovakia had purchased the units and exported them. The manager scrawled a note and handed it to my companion: "This is a Slovak trading company in Moscow. Go there, and they will make the necessary arrangements."