MR. KOJO NNAMDIIt was a convenient omission when NATO powers initiated air strikes in the spring. It was framed as an attempt to protect civilians from a dictator's deadly arsenal of tanks and heavy weapons. What was left out was how Muammar Qaddafi got his hands on those weapons in the first place? For years, defense companies and arms dealers from the very same NATO countries launching air strikes -- France, Britain, the United States -- had made billions of dollars selling those weapons to the Libyan government.

MR. KOJO NNAMDIToday, many of those deadly weapons are unaccounted for. By the standards of the industry, the Libyan story isn't particularly corrupt or morally questionable. In fact, according to author Andrew Feinstein, it fits part of a pattern that repeats itself in conflict zones around the world. In his new book, "The Shadow World," he explores the murky contours of the global arms trade, from the world's first merchant of death in the 19th century to the Arab Spring.

MR. KOJO NNAMDIAndrew Feinstein joins us in studio. He's a fellow at the Open Society Institute and author of "The Shadow World: Inside the Global Arms Trade." Full disclosure, Andrew Feinstein was previously a member of parliament in South Africa's ruling ANC Party. He resigned after investigating a corruption scandal within his own party involving kickbacks and, guess what, the sale of arms. He's also founding co-director of Corruption Watch, a London-based NGO. Andrew Feinstein, thank you very much for joining us.

MR. ANDREW FEINSTEINKojo, thank you so much for having me on the show.

NNAMDIThis book is both fascinating and the sweeping history of the trade in weapons. It traces the evolution of the industry from the 19th century through the world wars, the fall of communism. But I'd like to start with some of the conflicts the United States and the international community are confronting right now. You recently wrote an interesting piece in The Guardian newspaper about Libya, as a sort of ticking time bomb. How did Libya get all those weapons?

FEINSTEINThe situation in Libya was quite simple. The former Soviet Union and then Russia provided Col. Qaddafi with a lot of his weaponry over a period of decades. But once he had been rehabilitated in the eyes of the West -- so from about 2003, 2004, it was really the countries of the European Union, the United States, and also Russia continuing, even my own home country, South Africa was involved in selling him some weapons.

FEINSTEINBecause, obviously, with the oil revenue, he had a lot of money to spare and he was prepared to buy huge amounts of high tech weaponry that he often didn't even have the personnel to use. But something about the statute, the esteem of a person who is in total control of a country seems to drive them to buy, in excess amounts, this weaponry. So that's really where he got his arsenal from that kept him in power, certainly from the west perspective from 2003 until the Libyan people themselves started to do something about it.

NNAMDIMany of the weapons in Libya were purchased through official channels when Qaddafi normalized relations with the West. He pointed out after 2003, it set off a bonanza of sorts of western companies vying to sell him arms with the active help of their government, but many of those weapons arrived to somewhat murkier channels. How does a country like Belarus fit into the story?

FEINSTEINThe boundaries between what I call the formal or legal trade, which is government-to-government trade in weapons and the gray or black market -- the black market being completely illegal deals in both conception and execution -- those boundaries are extremely fuzzy. So even in the government-to-government deals, you will find a lot of the arms dealers who work in the black trade will be involved on behalf of governments, on behalf of big defense contractors from the U.S., from the United Kingdom, from other countries.

FEINSTEINSo you can't clearly delineate these. Now, a country like Belarus and some other countries of the former Soviet Union, which were -- I mean, the Ukraine, for instance, was the arms factory of the Soviet Union. Belarus was the state in which a lot of the weaponry was stockpiled. Since the end of the Cold War, they have had a booming business in selling this old Soviet equipment to pretty much anybody who will pay their asking price. And amongst those who were willing to pay was one Col. Muammar Qaddafi.

NNAMDIIn case you're just joining us, we're talking with Andrew Feinstein. He's a fellow at the Open Society Institute. His latest book is called "The Shadow World: Inside the Global Arms Trade." We're taking your calls at 800-433-8850. How do you think the international community should regulate the trade in illegal weapons? 800-433-8850. You can also go to our website, kojoshow.org, or send us a tweet, @kojoshow.

NNAMDII say the trade in illegal weapons, Andrew Feinstein, but you say there are basically three different global markets for weapons: the open market, the black market and what you just described as a gray market.

FEINSTEINAbsolutely.

NNAMDIPlease explain.

FEINSTEINThe gray market is really the intersection between the totally illegal black market and the supposedly legal and clean formal market. So it usually involves governments. It usually involves them using arms dealers who have operated in the illegal market to carry out arms deals covertly to influence foreign policy.

FEINSTEINPerhaps the most extreme example of it would be the Iran-Contra scandal that happened in the United States where the U.S. was selling arms to Iran, which was under an international and the U.S. Arms embargo at the time, and diverting the proceeds of the sales to the Nicaraguan countries in South America who were battling a leftist government there. This was a completely cynical deal involving Israeli intermediaries and involving Saudi Arabia, which was involved in financing that deal.

FEINSTEINSo that would be a perfect example of a great transaction. Although, again, I would say to you, Kojo, that all because of governments involved doesn't meant we shouldn't call it a black deal because that's exactly what it was.

NNAMDIHe's been called the merchant of death. For years, Viktor Bout was a globetrotting outlaw accused of selling weapons to everyone from al-Qaida to the Taliban to rebel armies in the Congo. He was arrested in 2008 in Thailand in an elaborate sting involving informants posing as Colombian rebels. Earlier this month, he was convicted of conspiracy to kill Americans in a New York court. Tell us about Viktor Bout because, in some ways, he apparently embodies the contradictions and the ambiguities of people in this business.

FEINSTEINAbsolutely, Kojo. Viktor Bout -- there are many, hundreds if not thousands, of Viktor Bouts out there. But he is the one who has almost become the poster child of the arms trade. Now, why it's so contradictory is because he's being tried, convicted in a New York court, which is an extremely good step forward, but the reality is that, between the years 2003 and 2005, while there was an international arrest warrant out for Viktor Bout's arrest, the United States was using him to transport equipment, weaponry and ammunition into Iraq.

FEINSTEINTheir responsibilities to Interpol was, if they had any knowledge of where he was, to have him arrested. Instead, they were using him for their own defense purposes, in addition to which I tell the story in the book of an instance in which Bout was flying from Aldover to Athens and he was being pursued by Belgium and British intelligence agencies, and the only others who knew about this flight of his were U.S. intelligence agencies. His plane disappeared off the radar for 90 minutes.

FEINSTEINWhen it arrived in Athens, there was only one person on the aircraft. That was the pilot. So there has been this history of collusion by the U.S. government and Department of Defense and some big U.S. defense contractors with a dealer like Viktor Bout. When the U.S. needs change, when their attitude to somebody changes, they then go after him, and he lands up in jail convicted. He should have been arrested, jailed and convicted many, many years before he was.

NNAMDIMany international arms dealers have multiple businesses, and many of the services they offer seem to be quite legitimate. The United States government, for example, relies on some of these players for logistical support in places like Afghanistan. But does the U.S. actually need people like Viktor Bout to do things that more legitimate businesses and individuals can't or won't do?

FEINSTEINI think, Kojo, it's a reflection of the politics of our age in the U.S. and globally where we feel there are certain things that we have to do behind a veil of secrecy imposed by national security imperatives. My argument is, very strongly, there -- of course, there are going to be certain things that need to be kept secret, but this particular trade, because of the devastation that it causes around the world, needs to be made far more transparent.

FEINSTEINWe need to be clear about why some of our governments and our names and using our tax dollars are using some of these people who have been involved in some of the most corrupt and venal transactions over the last few decades. And my response to that is that we shouldn't have to be using them. I don't believe we have to use them. And I would like to see a situation where our governments stop using these people.

NNAMDIDo you believe that the United States should be using "these kinds of people," people who are involved in the murky business of arms trafficking? 800-433-8850 is the number to call, or send email to kojo@wamu.org. In the aftermath of 9/11, the American government went on a spending spree, rapidly increasing military budget for wars in Afghanistan, in Iraq and building up a new antiterrorism regime. American defense contractors were apparently very well-positioned to profit off of both of these developments, weren't they?

FEINSTEINOh, absolutely. I mean, American and some other allied defense contractors -- the United Kingdom being an obvious example -- made tens of billions of dollars out of the Iraq and Afghanistan conflict. Now, I don't, in the book, try and say that that's why those conflicts happened. But I do find it problematic that a lot of the services that are being undertaken by the U.S. military, by the Department of Defense have been contracted out to private companies.

FEINSTEINSometimes, that works quite well, but there are also examples where it goes disastrously wrong. There are cases of weapons going missing, turning up on the black market...

NNAMDII'd like you to talk about one case in particular because your book tells the story of a 21-year-old from Miami named Efraim Diveroli, who won a contract to supply weapons to the Afghan military and somehow concocted a plan involving Chinese ammunition and the corrupt government in Albania. Please explain.

FEINSTEINTwenty-one-year-old out of Miami Beach, Fla. He was already on a State Department arms trading watch list which, at the age of 21, is quite some achievement. In spite of that, and because of serious problems within the U.S. department of Defense procurement process, he was awarded the $300 million contract you mentioned to supply the Afghan security forces with their ammunition.

FEINSTEINDue diligence was conducted on Diveroli and his company by a man who had turned out was the main investor in that company. So he turned to Albania, a small country in Eastern Europe that has stockpiles of 40-year-old Chinese ammunition and its own homemade ammunition, and he established a factory with the connivance of the Albanian defense minister and a whole group of very dodgy businessmen who are on the fringes of organized crime activity. This factory would receive the ammunition from the Albanian army at their expense. They would then clean it.

FEINSTEINThey would file off the Made in China or insignia because it is illegal for an American citizen to trade in Chinese weaponry. They would then repackage it and send it to Afghanistan. The consequences, when it arrived in Afghanistan, a lot of handguns and other weaponry would explode when using this ammunition, injuring both the trainers and the Afghan security personnel. There was an even more tragic end to this story, though.

FEINSTEINIn March of 2008, this prefabricated factory they had set up where there were no health and safety standards, where empty shells with TNT and gunpowder were just bulldozed into an open field, that factory exploded, killing 26 people who lived in the surrounding village, including a 7-year-old boy, who happened to be cycling past the factory at the time, a 3-1/2-month-old baby and three generations of the family who lived closest to the factory.

NNAMDIWe've got to take a short break. But one wonders when one government tells one that these are things that we have to do that you don't necessarily need to know about if transparency would not help in that situation. Call us, 800-433-8850. We're talking with Andrew Feinstein. He is a fellow at the Open Society Institute and author of the book "The Shadow World: Inside the Global Arms Trade." I'm Kojo Nnamdi.

NNAMDIWelcome back to our conversation with Andrew Feinstein. He is a fellow at the Open Society Institute and author of the book "The Shadow World: Inside the Global Arms Trade." Andrew, you tracked down a particularly colorful arms dealer named Joe der Hovsepian. He's half-Albanian, half-Lebanese. He's got extensive ties to the far-right and neo-Nazi groups. In fact, his weapons business was actually founded by former Nazi officers. Tell us a little more about him.

FEINSTEINI read a footnote about this guy in the commission of inquiry, started pursuing him. Nobody had ever heard of him. Eventually, my 14-year-old niece in Cape Town in South Africa said to me, why don't you look on Facebook? So I got her to set up a Facebook page for me. And there we found Joe der Hovsepian in a big Stetson. I emailed him. I got a one-line response which said, in my long life, I have never done anything for nothing. Why should I start now?

FEINSTEINI had nothing to offer him, except flattery. So for about three months, I sent him emails about how everybody I spoke to told me he was the person who knew more about the global arms trade than anyone else alive. Eventually, I get a call in my office in London. Come and see me in Amman, Jordan. I'll be at my office there on Sunday. Off I go.

FEINSTEINAnd for about six-and-a-half hours, this very charming man, with a Stetson on the whole interview and even when he drove me back to my hotel afterwards, regaled me with stories of how he had spent four decades in the black arms trade, breaking U.N. arms embargos in the Balkan's conflict, conflict in Africa. Wherever there was conflict, he was there and telling me about his neo-Nazi friends. When I asked him about whether these connections didn't create problems...

NNAMDII was about to say, you'd think that having links to Nazis and neo-Nazis would work against someone's business, but, apparently, he felt that came in handy.

FEINSTEINWell, you know, my ethnic origins, with a name like Feinstein, are pretty obvious. But when I asked him about this, he had no problem telling me. No, no. It's very useful when I talk to my clients in the Middle East, we can chat about how if only Hitler had been able to finish his work, the region would have far less problems than it has today. Now, this man, after telling me this, very proudly pulled out of his desk drawer his contractor ID for his work for the U.S. Department of Defense and U.S. defense contractors in Iraq and Afghanistan, his USAID ID for his work with USAID in Liberia and Iraq and Afghanistan.

NNAMDIGovernments in Washington and Paris go out of their way to help promote domestic weapons companies, and one of the arguments that they make is that these companies are a vital part of national economies. But you say that's a disingenuous argument, that these are really state-subsidized industries. What do you mean by that?

FEINSTEINWell, they're quasi-state organizations. Governments to the very top level are engaged in acting as salespeople for these companies. They receive huge subsidies for research and development work. Often they receive what are called export guarantees, which means that if a particular country doesn't pay them for the weapons they've sold them, their own country's treasury will step in and pay that money. And that's happened on frequent occasions around the world. So these are heavily subsidized industries.

FEINSTEINAnd my argument is that, of course, there's a need for an arms business. We live in a dangerous and unstable world, but that it could be run in a far more transparent and fully legal way, that it could be run far more efficiently. When one looks at the massive weapon systems that take place in the United States of America, the systems very seldom -- the equipment very seldom delivers what was promised.

FEINSTEINThey're often delivered to the military years, if not decades, late, and they're always way, way over budget. And the point that I'm making in the book is that this industry should be held to the same standards as most other industries, if not even tighter standards.

NNAMDII am showing you an ad from the back page of the National Journal. It's a full-page spread touting the F-35 Lightning to its massive multibillion-dollar weapons project. Its supporters say it will create 127,000 jobs in 47 states. Its detractors say this is the gold standard example of a dysfunctional defense procurement system. What say you?

FEINSTEINI would agree with the latter. This is a jet fighter that is going to cost the American taxpayer a conservatively estimated $380 billion. This would have been an incredibly useful aircraft if we were still fighting the Cold War. It is useless for the sorts of conflicts that the United States and other Western countries find themselves engaged in today. But, unfortunately, the American taxpayer is going to have to pick up the tab for an aircraft that a Pentagon aerospace design engineer described to me as a piece of C-R -- and I won't finish the word.

FEINSTEINBut even technologically, they argue, that this plane is not as good as some of the planes that have gone before it. So it is -- it's an extreme example of how the defense contractors, senior Pentagon officials and lawmakers, together, come to these decisions that cost us billions and billions of dollars that don't make logical sense even to the people at the cutting edge of national security issues. And, ultimately, in economically straightened times as we find ourselves in today, we have to ask ourselves the question: Does it make sense to be making this sort of weaponry?

NNAMDIHere is Richard in Herndon, Va. Richard, you're on the air. Go ahead, please.

RICHARDYeah. Good afternoon, Kojo, and also your guest. This is something that I hope Republican Darrell Issa will take a look at it and leave a recording on because this actually makes Fast and Furious, you know, so little because the way, you know, military industrial complex on the right side, the way they are making money and actually killing people, Africa and everywhere, this is what they need to look at it and leave a recording on. Thank you.

NNAMDIOkay. What Eric is referring to is the operation called Fast and Furious run by the Alcohol, Tobacco and Firearms Bureau that somehow ended up with arms in the hands of drug smugglers and ended up killing U.S. agents. And that's what Congressman Darrell Issa is looking into. Our guest suggests that he needs to be looking into what is going on in the international arms trade.

NNAMDIAndrew Feinstein, this is an issue that cuts close to home for you because, in a sense, your career arc has been profoundly disrupted by the darker side of this trade. Back in the late 1990s, you were a member of parliament in South Africa, a member of the African National Congress, and you had the task of looking into a controversial arms deal involving European defense contractors. How did that disrupt your political career?

FEINSTEINThe committee on which I was the senior member had responsibility for financial oversight. We received a report from our auditor general -- a bit like the inspector general here -- that this deal had taken place. We spent $10 billion on weapons that South Africa, which was only four-and-a-half years into its new democracy after the end of apartheid, simply didn't need and couldn't actually afford.

FEINSTEINOur president at the time, Nelson Mandela's successor Thabo Mbeki, told the country that we couldn't afford to provide antiretroviral medication for the over 5.5 million South Africans living with HIV or AIDS at the time. Harvard University calculates at least 355,000 South Africans died avoidable deaths because the government didn't provide them with a medication they needed to stay alive. But we could spend $10 billion on a jet fighter.

FEINSTEINWe bought 26. Eleven have ever been in the air because South Africa today cannot afford the fuel that they need, cannot afford to train the pilots that they need and has no use of a jet fighter. But 355,000 people are dead as a consequence of it.

FEINSTEINWhy did it happen? $300 million of bribes were paid to the defense minister from my own party at the time, to his political adviser, to the head of purchasing in the South African Defense Force and, very sadly, to the ANC itself, so that when I was re-elected to government in 1999, that campaign was run on the proceeds of the bribes paid by the successful contractors on that deal.

NNAMDIAnd the shadow fell not only over the then-President Thabo Mbeki but his former deputy and now president of the country Jacob Zuma.

FEINSTEINJacob Zuma was facing 783 counts of fraud, racketeering and corruption in relation to this deal. Ten days before he was elected president of the country, the charges were dropped. The prosecutor who dropped the charges was made a high court judge in South Africa three weeks after Mr. Zuma was elected president.

NNAMDIThis book starts with the story of Basil Zaharoff, who was, in many ways, the first modern arms dealer, the original merchant of death. Who was Basil Zaharoff?

FEINSTEINBasil Zaharoff has -- like many arms dealers after him, has hidden a lot of his early life. We think he was from Turkey or Greece. He, at one stage, claimed to be a Russian nobleman. He was a man who perfected the art of selling to all sides in any conflict. He was a confidant of the British Prime Minister Lloyd George in the lead-up to the First World War.

FEINSTEINHe managed to persuade then-Prime Minister Lloyd George that it was okay that he also supplied weaponry not only to the United Kingdom, but also to Prussia, who would become the enemy because it gave him intelligence insights into what the Prussians were doing. What it really did is it made him a lot of money.

NNAMDIAnd I'm afraid that's about all the time we have. Andrew Feinstein is a fellow at the Open Society Institute and author of "The Shadow World: Inside the Global Arms Trade," a fascinating read. Andrew Feinstein, thank you so much for joining us.

FEINSTEINThank you for your time, Kojo. It's been a pleasure to be with you.

NNAMDIAnd thank you all for listening. I'm Kojo Nnamdi.