How Mengistu Haile Mariam had sold old F-4 and F-5 in secret deal in 1980's

we had learned that the Ethiopian government of Mengistu Haile Mariam had a number of old F-4 and F-5 U.S. jets that were grounded because of their poor condition. Even though relations with Israel had been cut in 1978 as Mengistu leaned toward the Soviets, Israel had remained in contact with Addis Ababa. After back-channel lobbying and help from the Poles, I was told that an audience had been arranged for me with Chairman Mengistu himself. I traveled to Addis Ababa with an Israeli Air Force expert, and we were invited to inspect the aircraft before we saw the Ethiopian leader. We were driven to a steamy airfield outside the capital where 12 forlorn F-4s were parked, their bodies rusting, engines dead, tires rotted. “I don’t fancy going up in one of those,” I told my companion. He kicked one of the wheels. Flakes of rust fell away. “Let’s see,” he said. “Our people are very good.” Mengistu, who had risen up through the military, greeted us warmly. A thin, handsome man in his late 40s, he struck me as an intellectual who honestly believed in his Marxist revolution. His country was poverty-stricken, he conceded, “but when the revolution is on track, everything will be all right.” We got down to discussing the planes right away. “You are welcome to the F-4s,” he said. “The price is $250,000 each.” He added that the money should be paid in advance to a Swiss bank account. I told him I would get back to him. As we were about to leave, he mentioned there were 19 F-5 aircraft for sale, too. My colleague and I went back to the airfield and inspected the planes. This time he shook his head. “No hope whatsoever,” he said. “But, with a lot of work, the F-4s can be fixed.” On our return to Tel Aviv I contacted the Iranians. They weren’t willing to buy the jets until after Israel had refurbished them. But the Israeli government wasn’t going to fix them up without an Iranian commitment to buy. We had reached a stalemate … until the Poles came up with a solution. They would find a financier for the planes. I traveled back to Warsaw, where I was introduced to Hans Kopp, a Swiss businessman and the husband of the Swiss minister of justice. Over dinner, I asked him, “Isn’t there going to be a problem for you? According to Swiss law, there must be no financing for arms because you’re a neutral country.” He laughed. “Don’t worry about it, my friend. It’s a grey area. The financing will come through ‘paper’ companies.” While still in Warsaw, I called one of my Iranian contacts, Dr. Omshei. I extracted a commitment from him that if the Ethiopian F-4s were to be repaired to a reasonable condition, the Iranians would accept them. The Poles then arranged a three-sided meeting between Mengistu, Kopp, and myself. With the Swiss financier, I flew back to Addis Ababa. We negotiated Mengistu down to $150,000 a plane. He continued to talk about the hopes he had for his revolution. “It doesn’t look too good at the moment,” I told him. He shrugged. “There is a price to pay for every revolution,” he said. Mengistu gave me a secret bank account number in Switzerland, and I flew back to Tel Aviv. There, arrangements were made for a logistics team to travel to Ethiopia, truck the planes to the port of Asmara and then move them to Israel for refurbishing. It was a big logistics problem, but as my earlier companion had said, our people were very good. The 12 planes were going to cost a total of $1,800,000, and we were happy to be using a middleman’s money, because we were sensitive that, even though the aircraft were more than 20 years old, the Americans might still get upset. Using someone foreign was perfect. What we decided was this: Hans Kopp would “paper out” – document a false trail – $1.8 million to a French aircraft broker, SFAIR, which had offices in Paris and at Marseille airport. The man the deal was papered through was Daniel J. Cohen, technical manager of SFAIR at Marseille. (Coincidentally, Dan Cohen was the alias Gates often used.) We asked him to put the money into a special account at Banque Worms in Geneva. In the documentation, the deal looked like it was concluded with SFAIR. In fact, the money moved secretly onward to Mengistu’s account, which was handled by General Trust Company, with offices at Badener Strasse 21, in Zurich. Before the money was deposited, Israel reached an agreement that Kopp would actually be paid $250,000 for each plane – meaning he was making $100,000 on each. But without him, the deal might not have gone through, particularly as the export to Iran was going to be run through him. Everyone realized that it could be a year before the aircraft were in a fit state to be sent to Tehran. Apart from the financial side, there was still a lot of groundwork to be covered. As soon as the money was deposited with GTC, Israel, in coordination with the Ethiopian Embassy in Italy, sent an Air Force logistics team to Addis Ababa. During the transit of the F-4s to Asmara, we reached a deal with the Iranians that the refurbished versions, with new engines, would be sold to them for $4 million each. While all this was going on, another fantastic smokescreen was started up to disguise the true negotiations. John de Laroque paid the expenses of arms dealer Richard Brenneke to fly from Portland, Oregon, to Europe, where he became involved in looking for financing for 19 F-5s from Ethiopia. Intelligence agents from other nations watched carefully, unaware that a real deal had already been struck. To add to our good fortune, Brenneke bragged to a U.S.-based correspondent for the Swiss magazine Sonntags Blick that he was involved in buying the planes through Hans Kopp’s office. The magazine gave the story prominence. Kopp immediately sued the publication because the reality was that he had done no deals with Brenneke and had no intention of doing so. He’d already finished his work. Kopp pursued the suit as a show because of the position his wife held. Apart from those who were duped, everyone did well. Iran had a new supply of aircraft, Kopp made his profits, the Poles got brokering fees, Mengistu boosted his bank account, and the Israeli slush fund ballooned. The Israel-Iran Joint Committee paid $1 million per plane to Israel Aircraft Industries for the refurbishing, and that, along with other costs, including the purchase, brought the outlay on each aircraft to $1.5 million. But we sold them to the Iranians for $4 million each. Our profits were deposited in the bank accounts we set up around the world. Once again, the Americans didn’t get a penny out of it. The jets were over 20 years old, and under the strategic agreement that had been signed with Israel, we had every right to buy and re-sell them.