subsidiary was required to report to the US Internal Revenue Service.
The court in Luxembourg did not show any interest in enforcing the tax laws of other countries—hardly surprising, given that Luxembourg’s economy rests on its reputation as a tax haven. The court was trying to sort out whether Ewert had a legitimate claim to Unipatent and half of Glock’s lucrative US unit. Once the Luxembourg judiciary concluded that, on the contrary, Ewert was an embezzler and failed murderer, it left the propriety of Glock’s tax-minimization strategies to others.
As part of his effort to clarify ownership of his companies, Glock hired a team of American investigators based in Atlanta. The lead private eye, James R. Harper III, had served as a federal prosecutor and was active politically in Republican circles in Georgia. Harper retained a quartet of former cops and US government agents to help with his work for Glock. Their locked workspace on the Glock grounds in Smyrna was off-limits to regular company employees. Before long, the Harper group was traveling around the world, looking for evidence of Ewert’s wrongdoing. Referring to themselves as the “A-Team,” the secretive private detectives reported only to Paul Jannuzzo and, sometimes, directly to Gaston Glock.
Jannuzzo, who had risen to chief operating officer of Glock, Inc., and was the company’s most senior executive in the United States, seemed a little baffled by the mysterious Harper group. “A lot of the time,” he told me, “no one knew what these guys, the so-called A-Team, were even up to.”
Harper, a captain in the Marine reserves with a bulldog head and demeanor to match, traced the peripatetic Ewert to far-flung locations and connected him to unsavory characters. Harper amassed enormous files of corporate documents, witness interview transcripts, and PowerPoint flowcharts. The A-Team discovered that Unipatent was once owned by Hakki Yaman Namli, a controversial Turkish financier with a reputation for doing business in North Cyprus, a well-known center for money laundering and other financial fraud. The Glock-affiliated Panamanian company Reofin also had a tie to Namli, Harper determined. In 1995, Reofin and Namli co-founded Unibank Offshore, a bank in North Cyprus.
Harper warned Glock and Jannuzzo that by associating Glock with Unipatent, Reofin, and Unibank Offshore, Ewert had created a seeming link between the Glock companies and Namli. In a memo dated November 1, 2000, Harper wrote that Gaston Glock was “in danger of being flagged as an international money launderer because by all appearances … Ewert was working at [Gaston] Glock’s direction up until the time of the assault” on Glock. “Even a rumor in the press about the Glock connection to Cypriot money laundering,” Harper added, “could have significant if not devastating effects on Glock sales, especially to law enforcement.” The private investigator concluded: “Mr. Glock doesn’t understand the breadth of the problems or the potential disaster that could befall him.”
Nonetheless, Gaston Glock seemed unfazed. A mere five months after fending off the retired French Foreign Legionnaire, he issued his “Annual Message from the President” in a glossy promotional magazine called
In commercial terms, Glock’s assessment was accurate. The pistols kept selling. The FBI concluded its long search for a replacement for the Smith & Wesson revolver, bypassing American manufacturers to choose the .40-caliber Glock. The DEA piggybacked on the FBI’s procurement contract. Thousands of agents for the agencies— like their brethren in Customs, the Marshals Service, the Border Patrol, and state and local police forces—were issued Austrian pistols as duty weapons. Glock, Inc.’s, annual revenue hit $100 million in the late 1990s, according to former executives.
Success in the marketplace did not, however, cause Gaston Glock to forget or forgive betrayal. His clash with Ewert spawned suspicion that Panama Charly was not the only subordinate attempting to rob the gun maker. Glock was determined to identify and punish the others, as well.
CHAPTER 18
“Monopoly Money”
Gun manufacturers thrive on turmoil. For Glock, the American military response to 9/11 proved a bonanza. At the Pentagon, Beretta retained the main contract to provide handguns to the army, but elite US military units with the authority to choose their own small arms gravitated to the Glock.
Jim Smith, a veteran of Delta Force, the army’s premier special-operations unit, explained that highly trained commandos considered the Austrian-made gun more dependable. Most commandos carry handguns as well as rifles; conventional infantry fighters usually are issued only rifles. Smith spoke of the Glock with clipped reverence. “We put it in the sand, in water, extreme heat, fired thousands of rounds,” he said. “Pull the trigger, it fires. Reliable.”
I met Smith at a small arms trade show in Germany. After retiring from Delta Force, he started a consulting business in Texas where he tutored corporate executives, police SWAT officers, and even some Army Rangers. The Rangers were frustrated that their unit, though elite, was still issued Berettas, he said. They wanted what the secretive Delta Force carried.
After the invasions of Afghanistan and Iraq, US authorities outfitting local security forces turned primarily to the Glock. The American government bought more than 200,000 of the Austrian pistols for distribution to Afghan and Iraqi police, national guardsmen, and soldiers. Spread over several years, those sales came on top of the company’s routine cash flow from police and commercial business.
The rush to award contracts and ship pistols caught American manufacturers unprepared. When they learned that Glock had cornered the post-9/11 market in the Middle East, some objected angrily. “As a US taxpayer and a US manufacturer, I am greatly offended that my tax dollars are being used to buy foreign weapons for the Iraqis when there were US companies that could have supplied that product,” Robert Scott, Smith & Wesson’s president, protested. Three members of Congress announced investigations of Glock’s procurement coup. The indignation drew media attention but had no substantive effect.
On the ground in Iraq, US military officers praised the Glock. “My personal opinion is that the Iraqi people respect power, and power is an AK-47 or a Glock nine-millimeter gun,” Captain Kevin Hanrahan of the Eighty-ninth Military Police Brigade told the
Whether or not they instilled confidence in the Iraqi authorities, US-supplied Glocks definitely became hot items on the Baghdad black market. “The Americans gave us Glocks without registering the serial numbers and without receipts,” a former policeman named Yasser told Agence France-Presse. When Yasser quit his unit, he sold the Glock he had been given to “a friend” for $800. The American military eventually lost track of some 190,000 small arms in Iraq, including 80,000 pistols—mostly Glocks, according to US congressional investigators. Insurgents appreciated a reliable weapon as much as anyone else, and the Glock became standard among Sunni militants who attacked Americans.
The story was much the same in Afghanistan. Large numbers of Glocks furnished to local army units simply vanished. Whoever ended up with its pistols, Glock prospered from the Bush administration’s global war on terror, just as it had from the earlier domestic war on drugs.
But Glock’s impressive sales figures were accompanied by intensifying disarray within its corporate ranks. It was almost as if selling pistols no longer required the close attention of the company’s top executives. The Glock sold itself.
In February 2003, Paul Jannuzzo once again collided with the NRA, this time as a result of an appearance on
