Review: ‘Arms and the Dudes’ by Guy Lawson

If Warren Zevon’s Lawyers, Guns, and Money looked prescient as a cabal of financiers and National Security Council employees in the ’80s footed the bills for soldiers of fortune in Central America, consider what the international arms trade looked like after the Bush administration went to war in Afghanistan and Iraq. “Mission accomplished” in 2003 became “Mission: Impossible” three years later. American armed forces needed weapons fast. As part of its addled commitment to outsourcing essential government functions, the administration spent almost $400 billion by 2008 on private military contracts.

Into this breech stepped two Miami Beach stoners, about whom Guy Lawson writes in Arms and the Dudes. The book unfolds like a Hollywood movie project that requires no green light, only casting (Miles Teller and — naturally — Jonah Hill will play the leads).

The developments are so unbelievable that a writer less skilled than Lawson would have still written a compelling book. Instead, the reporter, whose first version was published in Rolling Stone in 2011, fills in context. Arms and the Dudes is as much about the collapse of American accountability in Iraq during the late ’00s as it is about the dudes.

Efraim Diveroli mastered the subtleties of federal bidding website FedBizOpps; a couple of years before his 21st birthday, he was already buying a hundred thousand dollars’ worth of ammo and reselling it for 20 grand a week in profit. But he wanted a bigger haul. David Packouz, whom Diveroli had met at a yeshiva in 2004, joined him in time for the two to start AEY. By 2007, AEY had a $300 million contract to supply the Karzai regime with arms.

Most of Lawson’s material comes from Packouz, honest about how much “waking and baking” he and his buddy did before hopping on planes to arms fairs and Albania. Years of studying Hebrew school religious texts that, Lawson writes, “bore an uncanny resemblance to government contracts” gave Diveroli advantages over less meticulous competitors, ferocious pot habit notwithstanding.

Unraveling who’s paying what to whom gets complicated, but Lawson keeps the story simple. Fronted by a Mormon businessman named Ralph Merrill who made his fortune in ATMs, Diveroli and Packouz acquire cred until they find the mother lode: Cold War-era Chinese ammo. With the help of another school chum, Alex Podrizki, they maneuver Albania into moving the stuff. Baited with dreams of joining NATO, Albania was in a unique position to repack 100 million rounds of AK-47 ammo. Much of this ammo, The New York Times reported in a 2008 exposé, was worthless.

The Bush White House’s fealty to market principles in wartime did the rest. The Pentagon decreased the number of personnel supervising private contracting. A State Department flagging got Diveroli stopped at the airport but nothing worse. As the Defense Criminal Investigative Service investigation forced Packouz to rat out his partner to avoid a sentence in 2007, the Army ordered Diveroli to ship those arms to Afghanistan anyway.

It was a classic bureaucratic comedy of errors. “There was no way to reconcile these divergent demands, certainly not under the pressures of a war spiraling out of control,” Lawson writes.

The dudes’ recreational appetites were as prodigious as the Army’s for guns. What they spend on Grey Goose and pot and hookers would bankrupt Cameroon. Meanwhile Packouz and Diveroli operated in moral chaos. “He wasn’t learning how to make a living,” Lawson writes about Packouz. “He was learning how to make a killing” (cue movie girlfriend yelling this aperçu at Teller).

Talented enough to project bravado for Army auditors and arms company heads, Diveroli comes off as too wired, too greedy and too stupid to navigate the complexity of War on Terror geopolitics. They lacked political connections. “A well-placed phone call, a favor called in, an appeal to logic over lunch at a K Street steak house — the situation perfectly illustrated why lobbyists existed in the first place,” Lawson wryly notes.

Lawson’s yarn has the momentum of pulp, but his reporting background doesn’t shield him from ironies. Occasionally phrasing fails him. “Like an aspiring samurai, Diveroli set about mastering the art of arms dealing” lands like a thunk. And no one in 2015 need use “an emotional rollercoaster” in a sentence again.

Eventually Diveroli and Merrill were indicted and convicted, the former serving four years in federal prison, denounced by his own mother in court (Podrizki and Packouz were placed under house arrest).

Even the threat of time in the hoosegow didn’t tame Diveroli. He got two more years after feds busted him for selling weapons. Packouz — father, masseuse, and creator of an album called Microcosm — insists that he and his partner were scapegoats, busted because The New York Times embarrassed the Defense Department.

At least Diveroli understood what was at stake: “I hope Bush invades more countries, because it’s good for business,” he said before the start of his remarkable good luck streak.

This story was originally published July 17, 2015 at 1:32 PM with the headline "Review: ‘Arms and the Dudes’ by Guy Lawson."