Two days ago, on October 4, a federal district court in Arizona dismissed a criminal indictment brought in 2014 against Marc Turi that accused him of lying in two brokering applications that Turi had submitted to the Directorate of Defense Trade Controls (“DDTC”) in 2011. The dismissal was based on a motion to dismiss filed the day before by the prosecution noting that a consent agreement had been reached between Turi and DDTC.  Under that consent agreement, released by DDTC yesterday,  Turi agreed that for four years he will not engage in any “activities subject to the ITAR.”

The Turi case is, to say the least, an odd case, not the least because it involves an arms deal with the Libyan rebels which everyone — DDTC, the prosecutors, and Turi — concede never took place.

The story begins with the revolt in Libya that broke out in February 2011. Near the end of that month, the rebels attempted to establish an interim government under the banner of organization known as the Libyan National Transitional Council (“NTC”). On February 26, 2011, the UN imposed an arms embargo on Libya, which DDTC finally got around to implementing some three months later on May 24, 2011, when it amended Part 126 to include Libya. The NTC was ultimately recognized as the government of Libya by the United Nations on September 16, 2011.

According to the indictment, on March 11, 2011 and before the US imposed the arms embargo on Libya in May, Marc Turi filed an application seeking to broker the sale of certain arms from Eastern Europe to the NTC. This application was denied by DDTC on March 22, 2011, by DDTC.

A week later, on March 29, 2011, Turi filed another application with DDTC requesting permission to broker to the government of Qatar a list of arms which the indictment, in paragraph 24(ee), described as “nearly identical” to the arms detailed in the previous application relating to the NTC. That application was granted by DDTC on May 5, 2011. On June 11, 2011, Turi filed an application to broker the same arms listed in the Qatar application to the U.A.E. government instead.

On June 29, 2011, Turi sent a letter, apparently never signed, to Mustafa Abdul Jalil, the Chairman of the NTC, by which the NTC agreed to reimburse the government of UAE for the arms described in the brokering applications filed by Turi with respect to Qatar and UAE. That letter was never signed, the arms never went to the NTC and the U.S. government indicted Turi for lying in the UAE and Qatar brokering applications by failing to reveal that the arms were destined ultimately to the NTC.

Turi’s defense, as revealed in his Motion to Compel Discovery, was that he was, in fact, acting on behalf of the CIA which sought to arm the NTC notwithstanding the UN embargo. Turi and the government then wrangled over these discovery requests, which the government claimed sought classified information, until the DDTC deal was reached and the government requested the dismissal of the indictment.

With these facts in mind, let’s look at the documents released by DDTC relating to the settlement.  These documents are, to say the least, odd. To begin with DDTC does not charge Turi with lying in the brokering applications he made with respect to Qatar and the UAE.

Instead, DDTC in its proposed charging letter first accuses Turi of making an unapproved proposal to the NTC in violation of section 126.1(e) of the International Traffic in Arms Regulations, citing the June 29 letter to Chairman of the NTC. Apparently no one at DDTC actually read section 126.1(e) because there is no way that this letter violated that section. That section only prohibits proposals “made to any country referred to in this section (including the embassies or consulates of such a country), or to any person acting on its behalf.” Given that the NTC was not recognized as the legitimate government of Libya until September 2011, the letter to the NTC in June, when NTC was simply a rebel organization, was not made to Libya or anyone acting on its behalf and so could not violate section 126(e).

The second violation in the DDTC charging letter is that Turi acted as a broker for Libya without authorization. This is problematic on two counts. The first is that if Qatar hires Turi to send arms to Libya the Turi is brokering for Qatar and not for Libya. Perhaps there’s a problem that Qatar’s intentions with respect to Libya weren’t revealed in the application, but DDTC isn’t charging Turi with violating the prohibition on false statements in applications. Besides, that was the charge DOJ made, and they dropped that.

But the second, and larger, problem with the brokering charge is this: DDTC had to know when it approved the Qatar brokering application where the arms were headed. That application was filed exactly one week after the Libya application was denied and covered a list of arms nearly identical to the ones in the Libya application. DDTC isn’t that stupid, nor is everyone else as stupid as DDTC must imagine.

Consider this: say you’re a compliance officer and an employee asks to ship some flowers to Iran. You, of course, say no. Five minutes later he’s back in your office saying he decided to send the exact same flowers to the UAE instead. No problem, you say. Does anyone honestly think that DDTC or BIS or OFAC would look the other way? Or would they have your head on a platter?

DDTC and that State Department almost certainly were fine with letting Qatar arm the rebels in Libya; they just could not admit that in writing.

Copyright © 2016 Clif Burns. All Rights Reserved. 
(No republication, syndication or use permitted without my consent.)