Question 3

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The siege of Sarajevo was finally lifted in October 1995 with acease-fire that brought a conclusion to the Bosnian war. TheSarajevo government delayed implementing the cease-fire until natural gas and electricity service were restored to the city—giving Croat and Bosnian forces five more days to take Serb-held territory near Prijedor and Banja Luka in western Bosnia.1 Although the fighting stopped with the cease-fire and subsequent signing of the U.S.-brokered Dayton Peace Agreement in November, the city was not entirely reopened and reintegrated until March 1996. At that time, central road networks were fully reconnected, and Serb forces withdrew from the neighborhood of Grbavica (setting fires, looting, and stripping the high-rise apartments bare as they departed, including the removal of wiring, doors, and window frames), as well as the suburbs of Ilidza and Vogosca. Complete control of the city was a key victory for the Sarajevo government in negotiating the Dayton accords—and was bitterly opposed by many Bosnian Serb residents in these areas, large numbers of whom left along with the Serb troops. The last UN aid flight left Sarajevo in January 1996, marking the conclusion of the longest-lasting airlift in history. Given the remarkable longevity of the siege, how and why was it finally lifted? Much of the answer can be found by tracing the interaction between the formal (front-stage) and informal (backstage) mechanisms that brought an end to the conflict.

c h a p t e r 5 lifting the siege

Andreas, Peter. Blue Helmets and Black Markets : The Business of Survival in the Siege of Sarajevo, Cornell University Press, 2010. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/asulib-ebooks/detail.action?docID=3137928. Created from asulib-ebooks on 2018-07-02 10:06:53.

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Front Stage: Triggering NATO Air Strikes

The Sarajevo government was never able to break the siege militar- ily, and its failed efforts to do so late in the war generated heavy casu- alties. Many speculate that the ill-fated military offensive in June 1995 had more to do with local politics and international signaling than with breaking the siege.2 But while Sarajevo remained bottled up and under siege, a decisive shift in the military balance on the ground elsewhere in Bosnia in favor of the Bosnian army placed Serb forces on the defensive for the first time, helping to create the political con- ditions for a negotiated settlement. Sarajevo was not the main battle- ground during the final phase of the war, but the city played a key role in prompting NATO air strikes (“Operation Deliberate Force”), which in turn helped to tip the military balance. Tracing the interplay between front-stage and backstage behavior helps to explain this de- cisive shift.

The trigger for the NATO air strikes came on August 28, 1995, when a mortar shell fell on Sarajevo’s Markale marketplace, the central out- door market for selling and bartering smuggled goods and other items. The bombing killed thirty-eight people and injured more than eighty others. Within minutes, foreign television crews arrived at the scene to broadcast graphic images of the carnage across the globe. While similar bombings had taken place in the past, this time Western leaders were looking for a legitimizing trigger and rationale to take more decisive military action against Serb positions encircling the city. The gruesome images from the marketplace bombing provided the opening for the launching of air strikes that had already been well planned out.

The backstage and front-stage action were closely linked. Back- stage smuggling provided the goods drawing the crowds to the mar- ketplace, and the front-stage bombing of the marketplace provided the carnage attracting the cameras. And the high visibility of the in- ternational military response to the marketplace bombing in turn enabled the Bosnian army to take advantage of its less visible clan- destine accumulation of arms in violation of the UN embargo. Wash- ington was a key player on both the front stage and the backstage: it took a formal, lead role in initiating and sustaining the air strikes

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while also informally encouraging and perhaps even facilitating arms smuggling to Bosnian government forces.

The launching of the air strikes—at that time the largest military operation in NATO’s history (involving more than 3,500 sorties and dropping more than 1,000 bombs)—was particularly visible because Sarajevo-based foreign media crews were close by to record the blow- by-blow action. As the journalist Tim Ripley noted, “In the Television Station and at the Holiday Inn, camera teams were feeding the images out live around the world.”3 Lieutenant Colonel Steve Stengel, who was involved in the first daylight mission over Sarajevo, recalls: “My lead [pilot] fired the AGM-65 Maverick missile that was picked up by the television cameras. We were not even on the ground before we were featured on the BBC news.”4

Those charged with carrying out Operation Deliberate Force were well aware that they were performing for a global audience and that Sarajevo was center stage. Explaining the aggressive use of close air support, Wing Commander Ken Cornfield comments: “We wanted to show the Bosnian Serbs we were aware of a number of targets in the city and demonstrate to the world, via the media, that the operation was centered on Sarajevo.”5 The air strikes were also about projecting an image of international strength and cooperation, notes Brigadier General Dave Sawyer of the U.S. Air Force: “By having a lot of activ- ity around Sarajevo, we were sending a message to the world that the UN and NATO were working together.”6

But Operation Deliberate Force was not only about signaling and image projection. The air strikes on Bosnian Serb positions (including the targeting of communications, ammunition, and heavy weapons) around Sarajevo—reinforced by artillery support from the heavily armed British and French Rapid Reaction Force that had been de- ployed on Mt. Igman—meant that the Bosnian Serb leadership based in nearby Pale could no longer use the city as a hostage and political negotiating card. The balance of military power in Sarajevo thus shifted for the first time, with important repercussions for the wider war. As Ripley observes, “This meant that they [Bosnian Serbs] could not apply leverage on the city to compensate for their defeats in west- ern Bosnia. . . . Denied their usual revenge tactics, the Bosnian Serbs had no option but to fight it out with the Croats and Muslims to the south and west of Banja Luka.”7

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Scaling back of humanitarian operations during the last months of the war was a prerequisite for the NATO bombings. The UN policy of consent was no longer operationally viable. The tightening of the siege meant that the Sarajevo airlift, for example, had to be shut down from April 8 to September 15, 1995. As Adam Roberts points out, “A more robust policy of decisive enforcement action only became pos- sible in Bosnia after the humanitarian aid programme had practically stopped in mid-1995 due to Bosnian Serb actions.”8 This seemed to contradict the UN Security Council’s assertion that “the provision of humanitarian assistance in Bosnia and Herzegovina is an important element in the Council’s effort to restore international peace and secu- rity in the area.”9 Indeed, far from the humanitarian aid effort en- hancing international leverage and influence during the war, it had the opposite affect. In Sarajevo, Robert Donia notes, “when the be- sieging forces deprived the city of essential services and aid, UN civil- ians and military officials frequently granted concessions in exchange for Bosnian Serb nationalist promises to permit the resumption of in- ternational aid. The Serb nationalists masterfully manipulated the hu- manitarian concerns of international officials, knowing that the city’s dependence on aid delivered under UN escort provided a chokehold to be tightened at any time.”10 Thus, bringing an end to the war was only possible once aid delivery was no longer viable and prioritized above all else by the UN and Western governments.

By the spring of 1995 the UN’s humanitarian mission in Sarajevo and elsewhere in Bosnia had become increasingly difficult to sustain. This was most starkly apparent during the UN hostage crisis in May, in which some 300 UN personnel (mostly French peacekeepers) were used by the Bosnian Serbs as human shields, chained to the doors of ammunition bunkers in Pale and the Mt. Jahorina communication sites. Karadzib and other Serb leaders apparently made a handsome profit by videotaping the incident and selling the footage to the global media. The televised images, which attracted worldwide attention, humiliated the UNPROFOR and outraged French president Jacques Chirac.11 Although the hostage crisis was soon resolved, it reaffirmed the growing sentiment that the UN’s humanitarian approach to the siege and wider war was untenable and indeed had become an em- barrassing symbol of international impotence. In other words, the ini- tial global cheers for the UN’s humanitarian effort had increasingly

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turned to jeers, generating a growing performance crisis for the UN and its Western government backers.

This was dramatically reinforced when Bosnian Serb forces sacked the eastern enclave town of Srebrenica (making a mockery of its des- ignation as a UN “safe area”) in July 1995 and then proceeded to sys- tematically kill over 7,000 Muslim men and boys. The global fixation on Sarajevo and the absence of a large international presence in Sre- brenica meant that the besieged town remained offstage and out of the spotlight during most of the war. But the sheer number of deaths jolted Western leaders, shamed the UN, and further tarnished the image of the Bosnian Serbs in international public opinion.12 Interna- tional tolerance for “ethnic cleansing” in Bosnia had reached a tipping point in the summer of 1995, drawing Western leaders to endorse the kind of military action they had so carefully avoided since the start of the war. At the same time, the balance of military power on the ground had shifted decisively.

Backstage: Shifting the Military Balance by Evading the UN Arms Embargo

NATO air strikes in late August 1995 helped to bring the war to an end, but this high-profile display of force was effective only in con- junction with Bosnian and Croatian military offensives on the ground. A major shift in the military balance during the last phase of the war, deliberately kept out of sight of the media cameras, was an essential condition for a negotiated settlement in the fall of 1995. As the former Croatian army general Martin Spegelj points out: “What was finally decisive in ending the war was the emergence, to general astonishment, of a strong army of Bosnia-Herzegovina.”13

A crucial part of the Bosnian army’s unexpected strength was growing access to smuggled weapons in violation of the UN arms embargo. In this sense, ironically, it was the very failure of the em- bargo that helped to bring the war to an end. Rather than stopping the bloodshed, the embargo helped turn the conflict into a protracted war of attrition in which the Sarajevo government was denied access to heavy weapons and forced to rely on smuggled light arms. For much of the war, the embargo privileged the already heavily armed Bosnian

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Serbs. Over time, however, the cumulative effect of circumventing the embargo helped to tip the military balance in favor of the Bosnian army (which already had a manpower advantage). Thus, the subver- sion of an arms embargo designed to inhibit and contain conflict con- tributed to the ending of conflict. Indeed, Bosnia as a state survived partly by evading the UN arms embargo.

No country dared make a unilateral front-stage move to formally defect from the arms embargo, but informal defection backstage made the embargo increasingly porous, especially after the U.S. bro- kered alliance between Croatia and the Bosnian government in the spring of 1994. In the international politics of the UN embargo, the formal, front-stage action was about image management, keeping up the appearance of unity within the so-called “international commu- nity” and reaffirming a commitment to multilateralism. Meanwhile, much to the dismay of many senior UN officials and European lead- ers, the informal, backstage activities of the United States and other key actors such as Iran and other friendly Islamic states quietly sub- verted the embargo. One Dutch intelligence analyst notes that the UN was partly responsible for prompting these behind-the-scenes clan- destine moves:

The fact is that Bosnia was officially admitted to the United Na- tions as the 177th member state. It is strange then that the Secu- rity Council did not draw the logical conclusion that a new state may take measures for defence against an armed attack. The embargo curbed the legal arms trade, but did nothing to reduce the demand for, and supply of, arms, and only displaced it onto illegal circuits.14

The UN arms embargo, first imposed in September 1991, had placed the Sarajevo government in a highly disadvantageous military position long before the war even started. Virtually self-sufficient militarily, neighboring Serbia was the least vulnerable to the arms embargo. Similarly, the Bosnian Serb nationalists, aided by the arma- ments left behind when the JNA formally withdrew and by clandes- tine supply channels to Serbia, were minimally affected by the embargo and therefore had the most to gain from it.15 The Sarajevo govern- ment, on the other hand, was poorly armed. American intelligence

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reports indicated that the Bosnian military forces had only two tanks and only one or two armored personnel carriers in 1992, while Serb forces possessed 300 tanks and 200 armored personnel carriers. Bos- nian military forces had two dozen artillery pieces compared to 600–800 on the side of the Serb forces.16

Moreover, the Sarajevo government was geographically heavily dis- advantaged. Most weapons imported into the almost entirely land- locked country had to be smuggled through Croatian territory. Thus, the embargo made an already difficult situation even more so. Access- ing external arms supplies would have to be done through covert chan- nels, which included paying exorbitant “taxes” in the form of Croatian transit fees (the standard trans-shipment fee was about 30 percent, with payment in kind).17 Equally important, dependence on the black mar- ket limited the types of equipment available, since heavy weaponry, such as armor and artillery, was particularly cumbersome and difficult to smuggle in (and which the Croats were most reluctant to facilitate).18

The mechanisms for evading the arms embargo ranged from small independent entrepreneurs at the bottom of the trade to large-scale state-sponsored smuggling at the top. In the first year of the Bosnian war, there were reports of a “virtual cottage industry of small-scale freelance [arms] smuggling.”19 More elaborate and organized smug- gling operations soon emerged. President Izetbegovib toured the Middle East in October 1992 asking sympathetic countries for covert assistance. Funds were also collected from the growing Bosnian dias- pora, which helped to purchase black market military equipment and supplies.20 Iran reportedly sent covert arms shipments to Bosnia as early as September 1992, and by 1993 countries such as Brunei, Malaysia, Pakistan, and Saudi Arabia were providing arms and other supplies. Partly motivated by a desire not to be upstaged by its rival Iran in covertly aiding Bosnia, Saudi Arabia allegedly provided $300 million to access weapons via the same clandestine network of traf- fickers and operatives that was created a decade earlier by the Saudis and the United States to supply the anti-Soviet insurgents in Afghani- stan. One Saudi official claims that the U.S. role in this scheme “was more than just turning a blind eye to what was going on. . . . It was consent combined with stealth cooperation.”21 Saudi sources claimed that covert U.S. involvement was crucial because Saudi Arabia lacked the “technical sophistication” to carry out the operation by itself

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(American officials immediately denied such allegations when they appeared in press accounts).22

According to a number of reports, a key broker for black market weapons deals for the Bosnian government was an obscure organiza- tion called the Third World Relief Agency (TWRA).23 The TWRA was allegedly used as a front to funnel $350 million to the Bosnian govern- ment between 1992 and 1995, at least half of which was apparently used to purchase and smuggle weapons.24 Most of the money report- edly came from Middle East countries, including Iran and especially Saudi Arabia. Donations also came from Turkey, Sudan, Brunei, Malaysia, and Pakistan.25 The United States allegedly knew about the TWRA’s operations starting in 1993. “We were told [by Washington] to watch them but not interfere,” recalls a senior Western diplomat. “Bosnia was trying to get weapons from anybody, and we weren’t helping much. The least we could do is back off. So we backed off.”26

Austrian and German authorities also allegedly looked the other way. Mohammed el-Fatih, the Sudanese director of the agency, had ac- quired a diplomatic passport in March 1992, making it possible to move large quantities of hard currency without worrying about po- lice inspections. The TWRA also allegedly sent substantial amounts of cash to Croatia to pay off Croatian officials for their acquiescence in shipping arms through their territory, and was reportedly involved in smuggling money into Sarajevo on UNHCR planes.27

Headquartered in Vienna, the TWRA had offices in Sarajevo, Bu- dapest, Moscow, and Istanbul. Hasan Cengib, the top Bosnian govern- ment official charged with negotiating clandestine arms deals, was on the advisory board of the TWRA. In a major smuggling operation funded by the TWRA in September 1992, Soviet-built cargo planes reportedly landed in Maribor, Slovenia, from Khartoum, Sudan. The cargo—120 tons of assault rifles, mortars, mines, and ammunition orig- inally from surplus stocks of Soviet weapons in East Germany—was labeled as humanitarian aid. From Maribor, the weapons were al- legedly transported by chartered Russian helicopters to Tuzla and Zenica in Bosnia, stopping at the Croatian port of Split to refuel. An- other operation reportedly involved $15 million in light weaponry, smuggled into Bosnia from Croatia via Malaysian and Turkish UNPRO- FOR troops. The director of TWRA fled Vienna and moved to Istan- bul in 1994 when he discovered that an investigation was underway

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implicating him in money laundering and arms smuggling. In 1996, the Bosnian government awarded the former head of the TWRA a gold medal for his agency’s “relief work.”28

The TWRA’s operations predated the opening of a direct arms smuggling channel between Iran and Bosnia (via Croatia) in May 1994. Iran had reportedly been supplying arms to Bosnia since early in the war, but after the U.S.-brokered Croat-Bosnia Federation in the spring of 1994 it became significantly easier to smuggle in weapons via Croatian territory. At an April 28, 1994, meeting with U.S. Ambas- sador Peter Galbraith, Croatian president Franjo Tudjman inquired about the U.S. stance on the Iran–Bosnia smuggling pipeline. Gal- braith allegedly replied that he had “no instructions” from Washing- ton on the matter, which was interpreted as tacit approval. The first shipment of arms from Iran—bringing in sixty tons of explosives and military equipment—reportedly arrived in Zagreb on May 4. Many of the subsequent flights arrived at the Croatian island of Krk, with the weapons supplies then moved to the mainland by helicopter.29 Air shipments of arms and ammunition reportedly averaged eight per month, with 30 percent taken by Croatia as a trans-shipment fee. Ac- cording to CIA estimates, arms shipments to Bosnia from Iran reached approximately 14,000 tons, worth about $150–$200 million.30 By early 1995, Iranian cargo planes were reportedly arriving in Zagreb three times per week.31

Some arms shipments also managed to bypass Croatian territory, thus avoiding the heavy Croat tax. A number of reports claim that arms were flown at night directly to Tuzla in February 1995 using C-130 cargo aircraft. The origin of these “black flights” has never been confirmed, with much speculation that the United States was directly involved or subcontracted the work out to private cargo companies.32

Many UN officials were convinced that Turkish aircraft were in- volved, making deliveries from Northern Cyprus.33 The clandestine flights took place when there were either no Airborne Warning and Control System (AWACS) planes monitoring Bosnian airspace or when there were AWACS with U.S.-only crews.34 Within the UN there was much hand-wringing and finger-pointing at the United States, with some disgruntled UN officials leaking information about the mysterious flights to the media in an effort to publicly shame and em- barrass Washington.35

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Despite the Bosnian government’s growing capacity to smuggle in arms, dependence on black market channels had significant limita- tions and drawbacks. As the New York Times editorialized in Novem- ber 1994:

Even though Bosnia is now smuggling in enough weapons to turn the tide, formally lifting the embargo is important because it would allow in the tanks and other heavy weapons the Gov- ernment’s side still lacks. It would also give Bosnia’s political authorities more control over which units get the new arms. . . . A procurement system based on smuggling directs arms to those commanders who have the best underworld connections. Lifting the embargo would also free Bosnia from reliance on radical weapons suppliers like Iran and Libya that have few in- hibitions about circumventing UN rules.36

Nevertheless, critics who argued that the embargo should be lifted to “level the playing field” were opposed by those who thought that this would simply “level the killing field,” escalating the conflict. As the Chief Political Officer of the UNPROFOR in Sarajevo, Phillip Cor- win, argued: “Any signs of lifting the embargo will encourage a wider war, and a wider war will mean more refugees. The main rea- son the European powers are in the former Yugoslavia in the first place is to prevent refugee flows to their countries.”37 Many interna- tional officials also feared that a formal lifting of the embargo, which the U.S. Congress was increasingly pushing for, would be interpreted by the Bosnian Serbs as a de facto declaration of war—which would, in turn, derail humanitarian operations and sharply increase the dan- gers and risks to UNPROFOR troops on the ground.38 This was yet another illustration of how the UN’s humanitarian mission in Bosnia inhibited a more forceful international response.

At the same time, a side effect of the UN-led humanitarian mission was to unintentionally provide a cover for smuggling arms to Bosnian government forces. Covert arms shipments were sometimes dis- guised as UN aid, hidden within the large quantities of legitimate aid entering by land and air. Discoveries of such camouflaged arms ship- ments were embarrassing for the UN, and added to Serb propaganda claims that the UN was aiding the Sarajevo government.39 Moreover,

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some UNPROFOR troops directly participated in arms smuggling schemes, both in Sarajevo (as discussed in the previous chapter) and elsewhere in Bosnia. For instance, according to one report, Turkish and Malaysian soldiers were involved in smuggling light arms; Bangladeshi troops were engaged in large-scale selling of ammuni- tion to the Bosnian military; and the UNPROFOR battalion from Malta ordered 4,000 mortar shells—yet possessed only four mortars.40

Bosnian government forces also reportedly managed to buy some arms supplies from Serbia, circumventing not only the embargo but also ethnic animosities.41

The stalemated international politics of the arms embargo—with Russia and major European powers supporting and the United States increasingly opposing it—meant that the embargo remained in place even as Washington officials quietly encouraged evasion. While avoid- ing the diplomatically risky move of unilaterally lifting the embargo on the front stage, the Clinton White House adopted a policy stance of not only non-enforcement (i.e., turning a blind eye) but also possibly infor- mal facilitation in arming the Bosnian government backstage.42 The clandestine channeling of arms to Bosnia from Islamic countries was enabled by the fact that the UN depended on U.S. intelligence to moni- tor the embargo.43 European and UN officials grumbled about U.S. covert complicity, but were partly pacified by the fact that Washington did not publicly flaunt its disregard for the embargo. Leaders on both sides of the Atlantic had an interest in not making too big a fuss over the issue. During his 1992 electoral campaign, Bill Clinton stated: “I think we have to consider whether or not we should lift the arms embargo now on the Bosnians since they are in no way in a fair fight with a heav- ily armed opponent.”44 Once in office, however, Clinton quickly back- pedalled, avoiding a confrontational public stance that would strain transatlantic relations. Thus, while privately encouraging the evasion of the arms embargo, the Clinton White House publicly opposed the mounting calls in the U.S. Congress to lift the embargo. Such a unilat- eral public move, the White House argued, “will drive the UN force out of Bosnia and oblige the U.S. to send in ground forces, as part of NATO, to assist in that withdrawal. It will divide NATO and increase Ameri- can responsibility for the outcome of the war in Bosnia.”45

With a rising influx of smuggled weapons, especially after the U.S.-brokered alliance of convenience between Croat and Bosnian

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government forces, the military balance took a decisive turn in 1994–95. “Time is on Bosnia’s side,” remarked a military insider who participated in a smuggling scheme that shipped 200 tons of Chinese weapons via Croatia to Bosnia (disguised as humanitarian aid in a convoy of thirty-eight trucks) in the summer of 1994. “With further similar transactions, one day Bosnia will take the war to the Serbs.”46

From April to August 1994, Jane’s calculates that 1,500 tons of ammu- nition and arms (such as grenade launchers and anti-tank missiles) were covertly shipped to Bosnia—worth an estimated $250 million.47

Iran was the Sarajevo government’s leading supplier late in the war, reportedly providing more than 5,000 tons of arms between May 1994 and January 1996—privately encouraged by the United States even as some officials worried about creeping Iranian influence in Bosnia and as the Tehran government was routinely denounced pub- licly in Washington policy circles as a sponsor of terrorism.48

While international attention focused on Bosnia, neighboring Croa- tia quietly built up its military capacity in violation of the UN arms em- bargo, reportedly spending between $1.5 and $3 billion on smuggled weapons (largely from Cold War stockpiles sold by corrupt officials in Eastern Europe).49 Successful evasion of the embargo was also evident in the outfitting of the Croatian army. As one press report put it:

The revamped Croatian army is a far cry from the poorly armed soldiers who barely held on to their new independence four years ago while losing one-third of their land to the Serbs. . . . Today the elite Croatian soldier is armed with a German Heck- ler and Koch HKG3A3 7.62mm assault rifle made under license in Pakistan. He wears a camouflage U.S flak jacket, manufac- tured in Canada, with pockets for six magazines and hand grenades. He walks in black leather U.S. combat boots.50

Croatian forces also received substantial training and advising from a private Virginia-based firm, Military Professional Resources Interna- tional (MPRI)—which, according to one press report, was “inter- preted in diplomatic circles as a strategy by Washington to approve contracts in sensitive areas using private but trusted personnel.”51

Ironically, the UN indirectly helped fund Croatia’s covert arms purchases. As Ripley notes, “The rent paid in cash by the UN for its

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Croatian bases went straight into the arms buying budget.”52 Indeed, Croatia charged such enormous landing fees for Bosnia-bound UN humanitarian aid flights that UNHCR airlift officials increasingly pre- ferred to use the Italian and German air bases.

Zagreb reportedly helped to build up the Bosnian army’s fighting capacity through clandestine assistance to the 5th Corps in the Bihab area. In the later phase of the war, Zagreb covertly facilitated the fun- neling of twenty million German marks per month to the 5th Corps. The funds were allegedly laundered through a variety of European banks and then delivered by helicopter to Bihab. In addition, Croatia allowed the 5th Corps to set up its own arms procurement operation out of Zagreb. Arming the 5th Corps also reportedly involved buying off corrupt Serb officials. According to Ripley, “A major part of the 5th Corps subsidy from Zagreb was spent bribing Serb officers to allow helicopter and aircraft over-flights,” noting that it was only from Au- gust 1994 on that Serbs started to shoot down Bihab-bound aircraft.53

The 5th Corps also bought a substantial amount of arms directly from the local Serb population west of Bihab, and bribes to Serb officers also enabled black market convoys to transit through the Krajina to Bihab in July 1995.54

In coordination with Croatian forces, the Bosnian army went on the offensive in the summer of 1995, quickly regaining large swaths of territory lost at the beginning of the war. Bosnian Serb–held territory shrank to 50 percent of the country by the end of September. These military offensives were the largest military operations in Europe since 1945. On the defensive for the first time and with little prospect of turning the tide, the strategic calculus of the Bosnian Serb leadership shifted, creating space for a final negotiated solution.55 As Richard Holbrooke, the chief U.S. architect of the Dayton Peace Agreement, writes in his memoir, “The shape of the diplomatic landscape will usually reflect the actual balance of forces on the ground. In concrete terms, this meant that as diplomats we could not expect the Serbs to be conciliatory at the negotiating table as long as they had experi- enced nothing but success on the battlefield.”56

Mounting press reports of covert U.S. encouragement—particularly in giving a “green light” to the Iranian arms pipeline—would in 1996 be used as political ammunition by President Clinton’s domestic op- ponents, who hoped to use it to tarnish and embarrass the adminis-

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tration in an election year. This culminated in congressional hearings and a lengthy report from what was dubbed “The Iranian Greenlight Subcommittee.” This was essentially a political move on the front stage to try to turn the administration’s backstage behavior into a po- litical scandal. Mark Danner wrote in anticipation of the scheduled congressional hearings: “In the coming weeks, citizens will watch as that late twentieth century American art form, the full-dress political scandal, enters its decadent phase. Panelled committee rooms, indig- nant congressmen, stubborn administration witnesses—all the famil- iar trappings will be on display.”57

Holbrooke publicly defended the administration’s backstage moves: “We were quite aware of the risks” in allowing Iranian arms and trainers into Bosnia “and didn’t like them,” he said, calling the deci- sion “the least bad of lousy choices.” Without the smuggled arms from Iran and elsewhere, Holbrooke bluntly stated, “the Bosnian gov- ernment would never have survived the winter of 1994–1995 and we never would have gotten to Dayton. It’s as simple as that.”58 In his memoir, Holbrooke points out that the covert arms shipments from Iran (and other Islamic countries) to the Sarajevo government were established early on in the war, predating the Clinton administration, “with the clear knowledge of American Embassy and U.N. officials in Zagreb, and were even mentioned in newspaper stories at the time.”59

In reprinted passages from a memo he wrote to Warren Christopher and Anthony Lake shortly before Clinton took office in January 1993, Holbrooke describes these as “not-so-secret secret shipments.”60 In other words, the backstage action was not so hidden from view on the front stage, yet few at the time wished to draw too much attention to it and create political awkwardness and embarrassment. And ulti- mately, this proved crucial in bringing the war to an end and lifting the siege of Sarajevo.

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The clandestine political economy of war left a deep imprint onthe postwar reconstruction process in Sarajevo and throughoutthe region.1 In the aftermath of the conflict, Bosnia emerged as a regional hub for the smuggling of people and goods, very much exploiting and building on wartime informal trade channels and networks. As was the case during the war years, the ability to transcend ethnic grievances was nowhere more evident than in the underworld of smuggling. While bridging ethnic divisions was the new mantra of many Western-sponsored reconstruction projects,2

black marketeering was not quite what international donors and officials had in mind. At the same time, the clandestine economy continued to be harnessed to fund competing ethnic nationalist agendas bent on subverting the creation of a viable multi-ethnic state. Thus, criminal and political agendas were closely intertwined.

The Dayton Agreement was part of the problem. It ended the bloodshed, but also created a weak and fragmented state structure (based on two formal entities, the Federation and the Republika Srp- ska, and ten local cantons) that facilitated various forms of criminal enterprise. Moreover, the massive postwar international presence in Bosnia, especially in Sarajevo, contributed to the clandestine economy by becoming part of the consumer base—most notably and controver- sially as a core clientele at many of the new brothels employing traf- ficked women and girls.

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The Criminalized Aftermath of War

The postwar challenge in Sarajevo and throughout Bosnia was far more complex than simply recovering from the physical scars of the conflict. The black market dealings and smuggling channels that proved so essential to the Bosnian war effort at the same time con- tributed to the criminalization of the state, economy, and society— with serious repercussions for reconstruction. In January 2000, the U.S. Special Representative to Bosnia told the Legal Affairs and Human Rights Committee of the Council of Europe: “War-time un- derground networks have turned into [political] criminal networks involved in massive smuggling, tax evasion, and trafficking in women and stolen cars.”3 In the case of postwar Sarajevo, for example, en- trenched political corruption—based on close relationships of loyalty and trust between nationalist politicians, the security apparatus, and criminals that were forged during war—slowed the rebuilding of the city, eroded public trust in government, and impeded political reform efforts.4 In short, criminalized war problems soon turned into politi- cized crime problems.

A decade after Dayton, the per capita GDP of Bosnia was still only 50 percent of the average for Southeast Europe and below 50 percent of prewar levels.5 More than half the country lived below the poverty line, and some 20 percent of the national income was based on the remittances from the hundreds of thousands of Bosni- ans living abroad (many of whom had been displaced by the war). The official unemployment rate was over 40 percent. But while Bos- nia’s formal, aboveground economy struggled to recover, the informal, underground economy flourished—generating substantial revenue and employment and becoming part of the basic survival strategy for many in the face of bleak economic prospects. In 2002, the World Bank estimated that the underground economy represented between 50 and 60 percent of Bosnia’s GDP.6 Some critics charged that the World Bank and other international financial institutions were contributing to the problem: at least in the short term, the sweeping market- based reforms they aggressively pushed as a condition for loans and reconstruction aid were contributing to economic dislocations, with

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some sectors of the population turning to the clandestine economy as a coping mechanism in the absence of an adequate social safety net.7

At the same time, such a sizeable clandestine economy presented an obstacle to creating effective state institutions and establishment of the rule of law. Much of the country’s imports arrived as contraband across minimally policed borders, providing consumer goods at a discount but enriching smuggling organizations and corrupt border officials and depriving state institutions of desperately needed tax revenue.8

Political and economic agendas closely overlapped in the clandes- tine economy, illustrated in a June 2002 corruption scandal in the Re- publika Srpska, in which the finance minister and head of the customs service were forced to resign and twenty-seven customs officers were suspended after it was discovered that customs agents had been bribed to drastically undervalue imported goods. The bribes not only lined the pockets of corrupt officials but allegedly also went to help fund the SDS party and the security detail for Karadzib (who went into hiding to avoid extradition to the Hague War Crimes Tribunal).9

The scandal illustrated that criminal enterprise in postwar Bosnia was “not just a continuation of business by criminal means but an exten- sion of politics by other means.”10 Resources from the clandestine economy were strategically used to empower rival nationalist state building projects, producing state deformation more than state for- mation or state destruction. As Amra Festib and Adrian Rausche argue, nationalist political parties utilized the clandestine economy— including “financial revenues from diverted public funds, customs and tax fraud, money laundering, and other illegal schemes”—to sustain power and subvert the post-Dayton constitutional order.11

The highly fractured nature of the political authority structure created by Dayton contributed to the problem, inviting massive rent- seeking and making coordinated border controls and collection of customs duties extremely cumbersome and difficult. For example, by creating interethnic borders within the country with little inter-entity cooperation on law enforcement matters, Dayton made it possible for law evaders to avoid the reach of the law by simply moving back and forth across entity lines.12

Dayton set up a purposefully weak and fragmented state apparatus that would be difficult to maintain without sustained international

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presence and oversight. Thus, what was initially supposed to be a limited, one-year international administrative intervention after the war turned into an uneasy and repeatedly extended quasi-colonial trusteeship under the supervision of the Office of the High Represen- tative (OHR), headquartered in Sarajevo.13 While the OHR was often resented locally and criticized internationally,14 more than a decade after the war it was not entirely clear that the local power brokers ac- tually wanted it to leave—after all, they had done well in the postwar years, and there was little assurance that the highly dysfunctional Dayton political system would be sustainable on its own.

Sarajevo’s privileged international status in wartime Bosnia contin- ued into the postwar era, reflected in an influx of foreigners and dona- tions to turn the city into the centerpiece of reconstruction. As was the case during the war, the disproportionate focus on Sarajevo masked a harsher reality in much of the rest of the country. And in Sarajevo it- self, all of the outward markings of rebuilding a hip, cosmopolitan European city—trendy cafes and restaurants, fashionable shops, rea- sonably safe streets, bustling downtown pedestrian walkways, and a popular annual international film festival drawing celebrities from across the globe—provided a deceptive veneer of normalcy.

The most visible side of Sarajevo’s reconstruction process— repairing war-scarred buildings, clearing mines from roads, and the presence of thousands of international advisers, monitors, police train- ers, NATO peace enforcers, and NGO representatives—was paralleled by a less visible though equally important side, involving smuggling, corruption, and aid diversion. A core objective of the Western-sponsored rebuilding effort was establishing a “free market democracy.”15 The sobering and uncomfortable reality, however, was that the main bene- ficiaries of the rush to introduce elections shortly after the war were the same nationalist political parties that had been in power before the war, and that the most viable and entrepreneurial market activities were in the illicit sectors of the economy.

The Criminalized New Elite

For most Bosnians in the aftermath of the conflict, participating in the clandestine economy was part of an everyday household survival

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strategy. But for the privileged few with the necessary political con- nections, the clandestine economy helped to provide the basis of ini- tial wealth accumulation and an alternative ladder for upward social mobility. Black market entrepreneurs were amongst the leading bene- ficiaries of the war, emerged from it as a nouveau riche criminalized elite, and continued to utilize political connections and smuggling channels built up during wartime. Thus, war not only involved mili- tary confrontation but also socioeconomic transformation. As part of this transformation, many who lived on the margins of society experi- enced a rapid rise in status that would have been inconceivable in peacetime. War, in short, was a highly effective mechanism for crimi- nalized social advancement. As described by one Sarajevo journalist, “The rabble have lined their pockets, and behave as though every- thing they now claim as their own had belonged to their grandfathers. They don’t deserve to be called a ‘new class,’ since even that requires a certain tradition; but I have no doubt that they will soon become just that. Who asks the wealthiest Americans nowadays what their forefa- thers did?”16 A former local commander similarly comments, “We know that there are people, because we know them personally, who didn’t have a pair of decent shoes before the war, and today they have 4–5 million marks and entire buildings in their property. On the other hand, there are people who had a lot before the war, and have nothing today.”17

Key players in the acquisition and distribution of supplies during wartime emerged as a powerful new elite with close ties to the gov- ernment and ruling political parties. While the creation of new elites was part of the transition process throughout post-Communist East- ern Europe and the former Soviet Union,18 in Bosnia the process was distinct in that it was dramatically accelerated by and took place under conditions of embargo busting and war profiteering. In con- trast to East Central Europe where the old nomenklatura/political elite converted political capital into economic (and sometimes crimi- nal) capital, in the case of Bosnia, criminal capital accumulated during a criminalized war was converted to political capital after the war.19

In Sarajevo, the city’s social structure was turned upside down: at the same time as many of the most educated professional technocrats fled abroad, many who were previously on the margins of society ex- perienced rapid upward mobility thanks to their wartime roles and

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political connections. The daily Sarajevo newspaper, Oslobod̄enje, lamented during the siege that “before our eyes, the new class is being born in this war, the class of those who got rich overnight, all former ‘marginals.’ ”20 A law professor at the University of Sarajevo observes that while new elite formation during transitions elsewhere took years and even decades, in Bosnia it happened overnight, with small fortunes made during the war by simply smuggling in a shipment of cigarettes or fuel.21 Robert Donia writes that in postwar Sarajevo, “the operators of the organized Sarajevo underground are among the wealthiest and best protected of Sarajevo’s new elite.”22

A legacy of the war was the criminalization of the city, as power and influence shifted during wartime to those most connected in the shadowy world of clandestine transactions.23 While physical destruc- tion was the most visible legacy of the siege, the city’s political and social transformation was the most consequential and long lasting. Profiting from the besieged city’s war economy provided the material basis for creating and consolidating the power of new elites closely tied to the dominant nationalist Serb, Croat, and Muslim parties. As Chuck Sudetic describes it, the commercial flows into Sarajevo during the war “helped to create a monied ruling elite—read: mafia—at the top of each of the nationalist parties that dominate Bosnia’s political life.”24 These elites shared political power at the start of the war, but lacked wealth. The siege thus provided an effective vehicle for initial capital accumulation, which in turn placed the new elites in the most advantageous position to profit from the peace. This included the pri- vatization of state-owned companies, internationally funded recon- struction projects to rebuild the city, and the general liberalization of the economy promoted by international financial institutions as a condition for continued aid.25 In this regard, the shady dealings in- volved in the privatization of the Sarajevo Holiday Inn (which had been made famous by wartime media reporting) came to symbolize the problem of postwar corruption in Bosnia.26 Similarly, just as war- time humanitarian aid provided opportunities for local diversion and profiteering, so too did the more than $5 billion in international assis- tance to Bosnia from 1996 to 2003. In 1999 the New York Times reported that as much as $1 billion in aid had been stolen.27

Moreover, local war profiteers on all sides of the conflict, including many politicians and military commanders, were shielded from pros-

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ecution thanks to a sweeping amnesty law. When international offi- cials pushed for an amnesty law for draft dodgers and deserters, local politicians opportunistically expanded the amnesty to include such crimes as illegal commerce, tax evasion, and illegal use of humanitar- ian aid. The time period covered by the amnesty was from January 1991 to late December 1995. The starting date, more than a year before the outbreak of the Bosnian war, closely corresponded to when the nationalist political parties (SDA, HDZ, and SDS) gained power. Some of the politicians who pushed for the amnesty law had investi- gations and indictments pending against them.28 Thus, illicit wealth accumulation during and immediately prior to the siege was effec- tively legalized. The OHR in Sarajevo, tasked with overseeing the post-conflict implementation of the Dayton Peace Agreement, did not block the broadening of the amnesty because it technically did not violate the Dayton terms.29

Some of those who profited the most from the Sarajevo siege recast themselves as legitimate new elites. For example, the local journalist Gojko Berib writes:

Thirty-five year old Alemko Nuhanovib passes for one of the richest people in Sarajevo today. Alemko is the owner of a score of shops in the city, a hotel, a distribution centre and wholesale warehouses in Zenica and Tuzla. He is now creating an indus- trial meat-processing business. Everyone in Sarajevo knows that this war profiteer is backed by someone very powerful; even, it is suggested, the General Staff of the (now Bosniak) Army. I re- call a scene from Sarajevo during the time of the siege: Alemko, in uniform and wearing a gunbelt, standing on a lorry full of bread and throwing it to a huge crowd of people scrambling to get a loaf or two. Now, when a journalist asks him how he ac- quired his wealth, Alemko says, “Allah and the poor know that!”30

Another prominent Sarajevo example is the Bosnian wartime Deputy Minister of Defense, Hasan Cengib, who reportedly lived modestly before the war as an Islamic clergyman but during the war was appointed as the president’s chief foreign fundraiser and weapons buyer. After the war, Cengib allegedly ran a family-run regional busi-

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ness empire. In March 2004, the independent political weekly Dani placed Cengib at the top of its list of the ten most influential people in Sarajevo.31 For highly placed logisticians such as Cengib, the covert nature of importing arms and soliciting clandestine external financial support from Islamic countries (with little or no paper trail) provided an ideal cover for corruption and profiteering.32 In his wartime diary, retired Bosnian army general Siber noted that Cengib was nicknamed “the money God.”33

On the Bosnian Serb side, Momcilo Mandib (a deputy minister for the Bosnian Interior Ministry in Sarajevo shortly before the war, who lived on a moderate civil servant salary) emerged from the war as one of the wealthiest men in the region. In 2003, the U.S. State Department charged that Mandib was “a major funding source for Radovan Karadzib through Mandib’s control of an elaborate network of crimi- nal enterprises engaged in embezzlement, business fraud, fictitious loans, and various other activities.” This included use of a Mandib- owned bank (Privredna Banka Sarajevo) and a Mandib-owned com- pany (ManCo Oil Company) to support Karadzib and his security de- tail.34 Mandib’s black market business skills during the war were reportedly most apparent in supplying arms, oil, and other goods. His initial wealth was allegedly created by stealing from the Sarajevo Ministry of the Interior treasury (150,000 German marks) shortly before the war started, was expanded by the wartime robbery of warehouses and manipulation of humanitarian aid, and was then completed with his dominant position in oil smuggling, banking, and fictitious loan schemes in Republika Srpska.35 Mandib also reportedly removed and later sold thousands of blank Bosnian identity papers, such as driver’s licenses and passports (Bosnian identity papers were highly valued during the war because they provided refugee benefits to their carri- ers and often led to a refugee or immigration visa to a Western coun- try). His political positions (as a Deputy Minister of the Interior and then Justice Minister in the wartime Bosnian Serb leadership) pro- vided an ideal cover for the accumulation of illicit wealth.

With international financing, the Sarajevo-based national court of Bosnia was partly established to investigate and prosecute people such as Cengib and Mandib, but the vast majority of funds were de- voted to prosecuting war crimes rather than organized crime cases. While the section of the court devoted to war crimes was lavished

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with international resources and attention, the less glamorous and more mundane work of the organized crime section took a back seat— even though organized crime cases were easier to prosecute than war crime cases and often involved the same individuals.36 Frustrating prosecutors was the fact that about 90 percent of the organized crime convictions between late 2003 and mid-2006 were revoked, revised, or modified for the betterment of the defense.37 Witnesses were reluctant to come forward due to a general lack of public trust and confidence in the legal system. With a low probability of conviction, defendants had little incentive to plea bargain—denying the prosecution a pow- erful tool commonly used in Western courts.

Many indictments were filed in the national court, but the system was quickly clogged, especially with war crime cases. Although those indicted were no longer untouchable and immune from scrutiny, many of them no doubt calculated that they could simply wait it out—expecting Western governments to eventually lose interest and the international funding for the court to dry up. Indeed, some court personnel in mid-2006 predicted that the United States would in the not-too-distant future simply declare victory and pull out even though the court itself had only been up and running for a few years. As one lawyer at the court put it, “Some small fish will be convicted, which will be given a positive spin as evidence of local ‘capacity building.’ It’s a facade.”38

Sarajevo as Transit Point for Migrant Smuggling

In the late 1990s Bosnia became a human cargo trans-shipment point for illegal entry into the European Union, with the Sarajevo air- port serving as the central connecting hub. Thus, the airport’s key wartime smuggling role extended into the postwar period, but this time as a stopover for migrants heading west. The International Orga- nization for Migration estimated that 40,000–50,000 irregular migrants (from countries such as Turkey, Iran, Tunisia, China, Bangladesh, and India) transited through Bosnia in 2000, most of them arriving on reg- ular flights to the Sarajevo airport from Istanbul.39 The absence of a visa regime with the main countries of origin made it possible for the transiting migrants to simply declare they were tourists, showing a

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round-trip ticket and sufficient funds to support themselves. After a short stay at local hotels known to be accommodating to migrants (such as the Hotels Alemko, Palais, Orijent, and Sinovi Drine), smug- glers would reportedly arrange ground transportation toward the Croatian border and on to Western Europe.40

Bosnia’s new niche in the migrant smuggling business was partly a legacy of the war. For instance, the routing of thousands of Iranian migrants through the Sarajevo airport in the immediate years after the war was a direct consequence of the close wartime ties between Bos- nia and Iran.41 Until December 2000 Iranian passport holders did not need a visa to enter Bosnia because the Sarajevo government was grateful to Iran for its assistance during the war. Chartered flights from Tehran regularly landed at the Sarajevo airport and returned vir- tually empty. For instance, in the first eleven months of 2000, more than 12,000 Iranians arrived at Sarajevo airport, but only about 1,000 left via the airport. Pressed by Western officials, the Bosnian govern- ment finally imposed a visa requirement on Iranians at the end of the year.42 The number of “tourists” arriving in Bosnia from Iran subse- quently plummeted.

The Sarajevo airport nevertheless continued to serve as a stepping- stone for smuggling migrants into Western Europe.43 As one BBC News report described the scene at the airport in April 2001: “Large batches of young men from Turkey and Tunisia appear several times weekly in the arrivals hall of Sarajevo Airport, nervous and shuffling, their futures in the less-than-reliable hands of people-smuggling gangs who whisk them away into taxis.”44 Ian Johnston, a British police officer working with the State Border Service at the Sarajevo airport, acknowledged in early 2001 that “on the average flight, 90 percent of the passengers are not here as genuine tourists.”45

Introducing a visa requirement for Turkish citizens was contem- plated but rejected after the proposal was opposed by the Ankara government.46 There were 14,083 Turkish citizens (predominantly Turkish Kurds) who arrived in Bosnia via the Sarajevo airport in 2000, but only 4,117 of the passengers returned. This prompted suspicions that the airport was being used as a way station for those seeking clandestine entry to the EU. Following more intensive scrutiny of travelers arriving in Sarajevo, Air Bosna (the national Bosnian airline) introduced a stopover at the Tuzla airport for Sarajevo-bound flights

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from Turkey. This, in turn, provoked accusations by the UN that the airline was deliberately aiding migrant smuggling. “We have done nothing illegal,” protested the director of Air Bosna, Omer Kulib. “When we introduced landings in Tuzla, we were simply responding to market demands.” Pressured by the UN, the Tuzla landings were subsequently shut down, and the number of monthly passengers from Turkey dropped sharply, from 1,500 in early 2001 to only 398 in August of that year.47

The UN mission in Sarajevo claimed in January 2001 that the Bos- nia route was taken by about 10 percent of the estimated 500,000 smuggled migrants entering Western Europe. Werner Blatter, the UN official responsible for refugee movements in Sarajevo, tried to put a positive spin on the situation, arguing that Bosnia’s new status as a migrant smuggling hub was a sign of the country’s growing attrac- tiveness and stability: “Six years ago [during the war], no one in their right mind would have come through here.”48

Sex Trafficking and Peacekeeping

Shortly after the end of the war, Bosnia also became a major desti- nation for the trafficking of women and girls to work in the many brothels springing up across the country—with the large interna- tional presence providing a core part of the customer base.49 In the wake of Dayton, thousands of peacekeepers, UN staff, private con- tractors, and NGO personnel arrived in Bosnia—with as many as 20,000 foreigners in Sarajevo alone. This influx of “internationals” not only contributed to the legal economy (for example, by renting apart- ments and hiring local staff and translators) but also to the illegal economy—including as a core clientele for the brothels that were opening up across the country.50 A senior official with the UN High Commission for Human Rights in Sarajevo estimated that foreigners made up about 30 percent of the brothel customers, but were the source of approximately 70 percent of the brothel revenue since they spent more than locals.51

Trafficking patterns in Bosnia followed peacekeeper deployment patterns. As Sarah Mendelson notes, “Many experts point to the loca- tions and names of the bars as evidence that traffickers not only target

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but also respond to the demand of international peacekeepers. While SFOR [stabilization force, NATO’s peacekeeping force] was stationed in Bosnia, activists claimed that one could drive through Bosnia and know which international contingent had responsibility for the region by the names on the brothels.”52 Many of the women and girls working in the brothels were trafficked into the country for forced prostitution from Eastern Europe and the former Soviet Union.53 By October 2002, the UN Mission in Bosnia suspected 227 nightclubs and bars of involvement in trafficking. The proliferation of brothels corresponded closely with the arrival of peacekeepers, and their apparent decline similarly corre- sponded with the departure of many peacekeepers in 2003.54

A number of investigative reports indicate that local police were directly and indirectly complicit in the sex trafficking and brothel business—for example, as guards, clients, informants, and partial own- ers of the brothels.55 Foreign police officers, serving as monitors with the International Police Task Force (IPTF), were reportedly part of the clientele. In one case, David Lamb, a former senior IPTF human rights officer, described the delivery of women to IPTF monitors in Sarajevo:

There were allegations from victims that they were taken to an apartment where the Pakistani [IPTF monitors] lived and had to give sexual services to them [in January 2001]. One time a Pak- istani monitor drove [two] trafficked women in a U.N. car to a hotel in Sarajevo and provided them to the “chief” of the Pak- istani contingent. The women called him the chief. . . . At the time of the allegations, the senior Pakistani officer was in Sara- jevo and served as the chief of the internal investigations unit.56

One U.S. Special Forces officer responded when asked if he would share information with the IPTF: “They were the best customers. It was just common . . . knowledge. . . . You knew which houses were the brothels and it was pretty common to see an IPTF or someone else in the U.N. community at these places.”57 One American IPTF officer allegedly even bought a woman from a Sarajevo brothel for 6,000 Ger- man marks or less. According to IPTF human rights monitor Kathryn Bolkovac, “One [U.S.] monitor bought a woman in Ilidza. He was repatriated. He was duty officer with me and told me about the woman he bought. . . . He admitted to me that he did this. He had her

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for a few months at least.”58 Bolkovac was fired by Dyncorp, the U.S. company contracted to support and supply U.S. military and civilian police personnel in Bosnia. She sued the company, claiming that she was fired for blowing the whistle on trafficking.59

Bolkovac was not the only person implicating Dyncorp personnel in trafficking. A report by the Criminal Investigation Division (CID) of the U.S. Army noted that a source had notified CID “that several U.S. government contractors [approximately five] were involved in white slavery. Sources stated that several members of Dyncorp, who live off base, purchased women from local brothels and had them live in their residences for sexual and domestic purposes. Source stated that the individuals purchased the women from local ‘mafia’ and when tired of the women would sell them back.”60 Dyncorp sent home five em- ployees at SFOR installations in 1999 after accusations surfaced that they were involved in purchasing women. Ben Johnson, a former Dyncorp employee, testified that the company tolerated and over- looked the buying of trafficked women, and named eight Dyncorp workers who he claimed had admitted purchasing women and girls. Johnson made these charges in a formal statement on file with CID in Bosnia. Johnson also stated in testimony before the U.S. Congress in April 2002 that Dyncorp employees would “even take [the trafficked females] on [to] locked-down military installations because the [UN] vans will not get searched if you drive them on post.”61 Dyncorp laid Johnson off, stating in the official letter of discharge that Johnson had brought “discredit to the Company and the U.S. Army.”62

Bosnian law enforcement authorities complained to Human Rights Watch investigators that they had no authority to go after NATO con- tractors, given their immunity from arrest, detention, and prosecution (part of a much larger problem of insufficient accountability of inter- national actors in Bosnia).63 As one local police officer explained in March 2001: “When we find a foreigner is involved, this is the biggest problem for us. We can’t do anything against them—they are above the law. On the video [filmed outside the nightclubs], the number plates [have the letters] CP. These are the contractors’ jeeps. I’d like someone to help with this. You can’t do anything about this. If we could prioritize, this is one of our main problems.”64

Sex trafficking and the proliferation of brothels went largely unno- ticed until the late 1990s. As a former Human Rights Watch investigator

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notes, until the local press began to report on the problem in early 1999 the issue remained “unacknowledged, unreported, and un- named.”65 As the trafficking issue became increasingly reported on in the media—and therefore increasingly embarrassing for international officials in Bosnia—the UN’s special representative in Bosnia, Jacques Paul Klein, announced tough new rules and enforcement initiatives, including the creation of the Special Trafficking Operation Program (STOP), a specialized anti-trafficking unit.66 One observer notes: “The STOP teams typically smashed down the door of a brothel, entered with great flourish (on occasion, with television cameras in tow), and then asked if the females present had been trafficked.”67 Some eighty raids during the last three months of 2002 bordered on the theatrical, with STOP teams targeting the same bars and picking up and inter- viewing the same women, over and over again.68 One official of the Organization for Security and Cooperation in Europe (OSCE) charac- terized STOP as “a great PR exercise. It looked like the UN was fight- ing trafficking.”69

In one highly touted STOP raid, UN officials boasted that 177 women had been “liberated,” and applauded Bosnian law enforcement cooperation. Klein proclaimed that the operation “clearly demonstrates to all of us that police training has paid off; professionalism has been enhanced; and the ability to work constructively together, regardless of entity or ethnic origin, is possible.” Yet as reported by Human Rights Watch, all but thirteen of the “rescued” women simply vanished shortly after the raids, and local NGO experts claimed many of them were back at the brothels.70 Nevertheless, the high-profile raids were a public relations success story for Klein, generating positive media cov- erage. At the same time, the raids drove the trafficking problem further backstage—and therefore more out of public sight and the media eye.

One perverse and unintended consequence of the STOP raids was to give corrupt police even more power to abuse their positions. For instance, one local law enforcement officer, who served as the area’s STOP team leader, apparently tipped off brothel owners of impending raids in exchange for free sexual services. Similarly, according to Cel- hia de Lavarene, the director of STOP, the chief of police in Kiseljak tipped off brothel owners in exchange for free sex: “We interviewed a lot of women and they told us that the chief of police goes to the bars and warns the owners.”71

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A public scandal broke out in the fall of 2000 when it was revealed that some of the IPTF monitors participating in the raids had been cus- tomers at one of the targeted brothels. On November 14, 2000, twenty- five IPTF monitors, backed up by peacekeeping troops, raided three brothels. Thirty-five women and girls were released who stated they had been trafficked for forced prostitution. The women were then driven to Sarajevo to be interviewed by UN officials. One official who interviewed them later told Human Rights Watch: “SFOR and IPTF brought the girls to Sarajevo, and then the girls pointed out that the guys driving them had been their clients.” One of the women indi- cated to IPTF investigators that the men “were in white cars with U.N. on it.”72 In the ensuing scandal, six IPTF monitors were sent back home.

Quickly repatriating international personnel was standard operat- ing procedure for the UN. Rapid repatriation also made it impossible for the accused to serve as witnesses in investigations. Klein publicly pledged to hold international personnel accountable, but in practice, investigations were rarely pursued very far or deep. In one case, an internal affairs officer told his supervisor that he had a “shovel” and requested instructions on “how deep to dig.” The response was to “only scratch the surface.”73

The UN Mission in Bosnia, it seemed, was more concerned about its public image than about following through with investigations of abuses. For instance, according to Human Right Watch, the UN ac- cepted the resignations or repatriated only those IPTF monitors whose names were disclosed in local media reports.74 A number of an- alysts commented on the UN’s muted response to allegations of UN personnel involvement in trafficking-related crimes, and suggest that this partly reflected fear that public scandals and embarrassments would undermine the ability of the UN to attract and maintain peace- keeping recruits.75

The Arizona Market: Peace through Illicit Trade?

Bosnia’s postwar clandestine economy involved (indeed depended on) substantial cross-ethnic collaboration. As discussed earlier, dense interethnic social ties in prewar Bosnia (including criminal ties) facili-

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tated black marketeering across ethnically divided frontlines in war- time. And in the immediate postwar era, the ability to overcome ethnic divides was arguably nowhere more advanced than in the clandestine economy.

The most impressive evidence of this was Bosnia’s “Arizona Mar- ket,” an expansive open-air black market bazaar that emerged in the spring of 1996 near the headquarters of some 4,000 peacekeeping troops and the “Colorado” and “Las Vegas” brothels. A few hours drive from Sarajevo in northeast Bosnia, the sprawling market sprung up in an area that once was a NATO-enforced checkpoint and “zone of separation” between Serb, Muslim, and Croat forces. As described by a spokesperson for the Brcko District OHR office, “It was a safe spot so locals themselves began to exchange cows and other goods.”76

Tomo Tomsib, a market landowner, explained the initial impetus: “If we hadn’t traded with each other, we would have starved, and it was easier to be involved in a black market than to plow a field.”77

By 1999, as many as 25,000 shoppers were visiting the Arizona Market on a single weekend, with the state losing an estimated $30 million in tax revenue every year from goods sold at the market.78 It also reportedly became a hub for bringing in illegal migrants, prosti- tutes, and drugs from Asia and the former Soviet bloc to Western Eu- rope.79 By late 2000 it had mushroomed into a complex of about 2,000 plywood and steel shacks spread out over some thirty-five acres. About 20,000 people owing their livelihoods to the Arizona Market (named for NATO’s designation of an adjacent highway). The largest building at the market was the “Acapulco Night Club,” housing some forty prostitutes from Moldova, Ukraine, and Romania (and fre- quented by nearby U.S. and Russian peacekeepers).80

A large sign erected in the midst of the Arizona Market read: “Our thanks to the U.S. Army for supporting the development of this mar- ket.”81 The Pentagon provided some $40,000 of the start-up costs. As retired Major General William Nash explains:

We cleared a side of the road, took a few mines away and put some gravel down and allowed these shacks to be built to start some commerce, and the reason the commerce was there was because it was near a checkpoint so the area was secure so Serbs, Croats and Bosniacs could all come and do business without

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fear of ethnic violence from their respective police forces or armed forces because it was in the zone of separation and guarded by the NATO force, Americans. . . . Over the years the Arizona Market has had an up and down existence with some issues of black marketing, trafficking in literally drugs, sex, and rock and roll.82

Colonel Greg Fontenot, the NATO force brigade commander for the northeastern section of Bosnia, recalls that his troops not only en- couraged the development of the Arizona Market, but provided some of the initial protection: “As the market grew, our troops had to take steps to prevent shakedowns by nearby police and to stop a string of car-jackings in the area.” Meanwhile, he acknowledges, “we were be- coming aware that people were selling pirated CDs and jackets, and there seemed to be some even more unsavory kinds of commerce.” As he explained it, “unregulated capitalism is a pretty rude sort of activ- ity.”83 Fontenot notes that he “would walk through the market at least once a day, and our Civil Affairs troops were also there, in uniform, as well as at the nearby checkpoint. . . . But we did not regulate what was sold in the market and we stayed out of most day-to-day deci- sions.”84 When the Bosnian government at one point dispatched thirty police to take control of the Arizona Market, they were blocked by NATO troops and armored vehicles and returned to Sarajevo.85

International officials at first enthusiastically promoted the Ari- zona Market as a way to generate local entrepreneurship, economic revival, and cross-ethnic interaction. “The market was encouraged,” explains Michael Montgomery of the Brcko District office of the OHR. “One way to move forward in the post war years was to use business as a foundation. To use an American phrase, the market was in ‘everyone’s interest.’ ”86 A USAID study reached a similarly upbeat conclusion: “At the Arizona market, stall owners and patrons come from all of Bosnia’s ethnic groups and even cross borders from neigh- boring Croatia and Serbia to sell goods and find deals. . . . On a daily basis, Bosniaks [Muslims], Serbs, and Croats interact, socialize, ex- change information and sometimes discover how similar they really are.”87

The Arizona Market was indeed a business success story (so much so that it was featured in a Harvard Business School case study),88 but

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