The Dogs of War

Johann Schlinker was in Madrid that morning, May 20. He had telexed the full details of the deal in 9mm. ammunition that he wanted to put through to his Madrid partner, a Spanish national, a full month earlier, and had later flown to the Spanish capital himself with his Iraqi End User Certificate, as soon as he had received Shannon’s $26,000 in full payment.

The Spanish formalities were more complicated than those Alan Baker had discovered in Belgrade. Two applications were necessary, the first to buy the hardware, the second to export it. The application to buy had been made three weeks earlier and over the past twenty days had been vetted by the three departments of state in Madrid who concern themselves with such matters. First the Finance Ministry had been needed to confirm that the full purchase price of $18,000 had been received into the appropriate bank in hard currency. A few years earlier, only United States dollars had been acceptable, but more recently Madrid was more than happy to take German marks.

The second department was the Foreign Ministry. Its job had been to confirm that the buyer country was not a state to which Spain was opposed. There was no problem with Iraq, since the great bulk of Spanish arms exports habitually go to the Arabs, with whom Spain has always maintained close and friendly relations. The Foreign Ministry had no hesitation in confirming its approval of Iraq as a recipient of Spanish 9mm. ball ammunition.

Last, the Defense Ministry had been required to confirm that nothing in the proposed sale was on the secret list or among the categories of arms not for export. With simple small-arms ammunition, this too had been no problem.

Although there had been no sticky problems with such a consignment, it had taken eighteen days for the papers to pass through the three departments, accumulating more paperwork as they went, until the final dossier emerged with the stamp of approval. At this point the crates of ammunition were taken from the CETME factory and stored in a warehouse of the Spanish army on the outskirts of Madrid. From this point the Army Ministry took over, and notably the head of its arms-export section, Colonel Antonio Salazar.

Schlinker had come to Madrid to present personally the application for an export license. He had been in possession of the full details of the MV Toscana on his arrival, and the seven-page questionnaire had been filled out and presented. Back in his room in the Hotel Mindanao, the German expected no problems here either. The Toscana was a clean ship, small but belonging to a registered shipping company, Spinetti Maritimo, as Lloyds Shipping List confirmed. According to the application form, she would wish to berth in Valencia between June 16 and June 20, take the shipment on board, and proceed straight to Latakia on the coast of Syria, where the consignment would be handed over to the Iraqis for trucking to Baghdad. The export license should take no longer than another two weeks, and then application would be made for a movement order, permitting the crates to be taken from the army warehouse and detailing an army officer to mount escort with ten soldiers as far as Valencia quayside. The latter precaution, brought into force over the previous three years, was to prevent any risk of hijacking by the Basque terrorists. The last thing the government of El Caudillo wanted was to see Madrid’s bullets being used against the Guardia Civil in Coruna.

As Schlinker prepared to leave for Hamburg, he reflected that his Madrid partner was perfectly capable of ensuring that the liaison with the Army Ministry remained at a cordial level and that the crates would be waiting in Valencia for the arrival of the Toscana on time.

In London a third and seemingly unconnected meeting took place. Over the past three weeks Mr. Harold Roberts, the nominee director of Bormac Trading Company, controlling 30 percent of the company stock, had been cultivating the chairman, Major Luton. He had several times taken him to lunch and once visited him at his Guildford home. They had become quite friendly.

Throughout their talks, Roberts had made it clear that if the company were to get off the ground and go back into business, whether in rubber or in some other area of trading, a large injection of fresh capital would be needed. Major Luton could well see that. When the time was ripe, Mr. Roberts proposed to the chairman that the company should make a new one-for-two issue of shares—a total, therefore, of half a million of new stock.

At first the major was aghast at the boldness of the move, but Mr. Roberts assured him that the bank whose nominee he was would find the necessary fresh finance. Mr. Roberts added that in the event that any of the new shares were not taken up by existing shareholders or new shareholders, the Zwingli Bank would take up the rest at full value on behalf of its customers.

The clinching argument was that when news of the fresh share issue broke on the market, the price of Bormac ordinaries would be bound to rise, perhaps by as much again as their present value, which then stood at one shilling and threepence. Major Luton thought of his own hundred thousand shares and agreed. As is so often the case when a man has once weakened, he then went along with Mr. Roberts’s proposal without further demur.

The new director pointed out that the pair of them could form a quorum and hold a directors’ meeting able to pass a resolution binding on the company. At the major’s insistence, a letter was still sent to the other four directors, simply stating that it was intended to hold a board meeting to discuss company business, including the possibility of making a share issue.

In the event, only the company secretary, the City solicitor, turned up. The resolution was passed and the announcement of the new share issue posted. There was no need for a meeting of shareholders, as in the long-distant past an increase in capital had been

authorized but never carried out.

Existing shareholders were given first choice to buy the stock and were sent allotment letters for the appropriate number of new shares. They were also given the right to apply for any shares not subscribed by those to whom they were originally offered.

Within a week, papers and checks signed by Messrs. Adams, Ball, Carter, and Davies, forwarded by the Zwingli Bank, were in the company secretary’s hands. Each man opted to buy fifty thousand of the new shares, including those originally allotted to him because of his existent holdings.

The shares had to be issued at par, which was four shillings each, and, with the existing shares standing at less than a third of that price, it was an unattractive offer. Two City speculators noticed the press announcement and tried to offer to underwrite the issue, assuming there had to be something in the wind. They would have succeeded but for Mr. Roberts. His own bid on behalf of the Zwingli Bank was already in, wishing to buy any shares remaining at the closing of the offer that had not been bought by existing shareholders of Bormac.

Some idiot in Wales agreed to buy a thousand shares, even at the too high price, and another three thousand were bought by eighteen other shareholders scattered around the country, who apparently could not do basic arithmetic or were clairvoyant. Mr. Roberts, as a nominee director, was not in a position to buy for himself, since he owned no stock. But at three in the afternoon of May 20, the closing date of the offer, he subscribed for all the 296,000 remaining unsold shares in the name of the Zwingli Bank, which in turn was buying these on the behalf of two of its customers. Their names happened to be Edwards and Frost. Again the bank used designated accounts of its nominee company.

In no case were the rules of the Companies Act regarding disclosure broken. Messrs. Adams, Ball, Carter, and Davies each owned 75,000 of the shares from their first purchase and 50,000 from their second. But as the number of shares now in circulation had risen from 1 million to 1.5 million, each man held less than 10 percent and was able to remain anonymous. Messrs. Edwards and Frost each owned 148,000 shares, just under the 10 percent limit.

What did not appear in public, or even to the directors, was that Sir James Manson owned 796,000 shares in Bormac, an overwhelming majority. He controlled, through Martin Thorpe, the six nonexistent shareholders who had bought so heavily. They could, through Martin Thorpe, direct the Zwingli Bank in its dealings with the company, and the bank controlled his contracted servant, Mr. Roberts. Using their proxies, the six invisible men behind the Zwingli Bank, operating through Harold Roberts, could make the company do anything they wished.

It had cost Sir James Manson £60,000 to buy the original shares, and £100,000 to buy up the bulk of the new issue of half a million. But when the shares reached the predicted £100 each, which he was sure they would do after the chance “discovery” of the Crystal Mountain in the heart of Bormac’s Zangaran franchise, he stood to make £80 million.

Mr. Roberts was a contented man when he left the Bormac offices after hearing how many shares his six Swiss-based stockholders had been allotted. He knew that when he placed the share certificates in the hands of Dr. Martin Steinhofer, there would be a handsome bonus for him. Although he was not a poor man, he was relieved to know his retirement in comfort was secured.

In Dinant, Shannon and Langarotti woke from their slumbers shortly after dark had fallen, to find Marc shaking them. Both were stretched out in the back of the empty French truck.

“Time to be going,” said the Belgian.

Shannon looked at his watch. “I thought you said before sunrise,” he grumbled.

“That’s when we go over,” said Marc. “We ought to get these trucks out of town before they become too noticeable. We can park by the roadside for the rest of the night.”

They did park, but none of the men slept anymore. Instead they smoked and played cards with the pack Vlaminck kept in the glove compartment of his truck. Sitting under the trees by the Belgian roadside in the darkness, waiting for the dawn, feeling the night air on their faces, each could almost think he was back in the African bush again, about to go into action, except for the flashing lights through the trees where cars headed south on the road to France.

As they sat through the wee small hours, tired of playing cards, too tensed to sleep, each fell back into his old habits. Tiny Marc munched the remnants of the bread and cheese his girl, Anna, had made for him. Langarotti stropped his knife blade a little sharper. Shannon gazed at the stars and whistled softly.

eighteen

There is no great technical difficulty in running an illegal consignment across the Belgian-French border in either direction, and that includes a quantity of black market arms.