Cocaine for Kalashnikovs The Stasi Spy Who Became an FBI Spook

East German arms, Colombian cocaine, ex-Stasi spies and the FBI -- it sounds like a Hollywood thriller. But for the Stasi operative turned FBI stooge Bernd Schlegel, "Operation White Terror" was very real. And very dangerous.

Customers come to The Men's Club, a strip joint in Houston, Texas with a black awning and a burly bouncer at the door, looking for different things. Some come for sex. Others come to enjoy the fine cuisine and the extensive wine list. And sometimes people come here to make deals.

The latter reason is why Carlos Alí Romero is here. Romero, 42, has taken a seat at the bar with a clear view of the door. From this vantage point, he can see if someone enters the club who might pose a problem. Being cautious can help you stay alive in this business.

Romero is wearing a polo shirt and rimless glasses. His laidback air belies his status as the local unofficial representative of an extreme rightwing Colombian paramilitary terror organization called the United Self-Defense Forces of Colombia (AUC).

The Colombian has come here on this autumn day in 2001 because he needs arms -- serious arms -- to fight the guerrillas in the jungle. He wants to establish contacts to Eastern Europe, to former generals of the Soviet Army who are offering to sell their arsenal on the black market. Next to him sits a man who Romero met a few weeks ago, a man from Germany.

"Do you have these kinds of contacts?" asks the Colombian.

"Everything is possible," says the other man. He pauses for effect. "It just takes time. And money."

Bernd Schlegel (not his real name) is wearing a black suede leather jacket, black cowboy boots and Armani mirrored sunglasses, and his long hair has been dyed blond. He looks like a Texan version of the flamboyant German fashion designer Karl Lagerfeld.

The man in black lowers his voice as the waitress passes by, swinging her hips and suggestively asking what she can do to make the gentlemen happy. Both men order rum and cokes and Negro Modelos, a bittersweet Mexican beer that Romero has recommended.

Schlegel was an officer in the East German armed forces, the NVA. He learned the fine points of the trade in St. Petersburg back when it was called Leningrad and knows how this game works. In the leg of his left boot he's concealed a Browning with a wooden grip -- .22 caliber, five shots, easy to handle, quiet, efficient. A pistol also helps you stay alive in this business.

Romero hesitates. He knows he has to take a risk, but he wants to tread carefully. "Money is no object," he says. He can pay with a currency that is valid all over the world: cocaine. He speaks with the accent of a Colombian immigrant who has climbed to the top of the social ladder. Little does he realize that up near the dance floor an FBI agent has taken up position to cover Schlegel.

It's 12 noon at the Men's Club, and one of most spectacular sting operations in the recent history of the FBI has just been launched. At stake are Kalashnikovs, anti-aircraft missiles and other weapons to fuel the civil war in Colombia. Also at stake is cocaine with a street value of half a billion dollars. In the midst of this plot, which Hollywood even filmed last year as a "Miami Vice" remake, stands Schlegel.

Honest and Reliable

Schlegel pursued the kind of career typical for the son of a Communist party official in East Germany: a stint in the National People's Army (NVA), followed by officer training -- and eventually the East German secret police, the Stasi. A captain approached him about working for the Stasi, and he signed up, under orders to collect information on soldiers "suspected of spreading anti-state propaganda or helping people to illegally leave the GDR."

The chekists, the Russian secret police, were also impressed with Schlegel. "Honest," "reliable," and "conspiratorial" were how they described him in an evaluation. What especially pleased the Russians was that Schlegel operated "independently" and did not need to be supervised -- an aptitude which would later also be highly praised by the FBI.

"Operation White Terror" -- as the FBI dubbed their investigation into the Colombian paramilitaries -- continued over a number of years and spanned half a dozen countries. The US government listed it as one of the top 10 inquiries following the 9/11 attacks. It's a textbook example of the relationship between crime and politics, the all-American way of fighting crime. In an FBI sting operation like this, the bad guys are pushed and prodded by undercover agents until they -- and sometimes the investigators themselves -- cross the line into illegality.

The FBI is the investigative arm of the US Department of Justice. Not surprisingly, once the case had been wrapped up, US Attorney General John Ashcroft appeared before the TV cameras to announce that Bureau agents had "made the nation and the life of our citizens safer." This was the rehearsed and visible part of the game. Since 9/11, America has perceived itself at war. The US has enemies and it needs heroes to save the country. An outside threat can unite a country internally -- that's the logic behind this type of crime fighting.

A New Life in the US

On Nov. 5, 2002, when the FBI struck on three continents, Ashcroft spoke on the evening news of the "interrelationship of the war on terror and the war on drugs." What Ashcroft failed to mention is the key role that had been played by Bernd Schlegel as an undercover agent. The German's story can be largely reconstructed from Stasi and FBI files, interviews with US government officials, lawyers, alleged offenders and his own recollections.

When Schlegel went to the States in 1999, he was in his mid-40s and on the run. He left a life in ruins behind in Berlin -- no job, no money, and a marriage on the rocks. There wasn't much worth staying for in Germany.

Schlegel's world fell apart with the collapse of communism. Working as a Stasi informant, the soldier had been swiftly promoted, first within the ranks of the NVA, then within the East German state apparatus. He was sent to Leningrad and Moscow. A Russian army identity card from those years shows a young officer with a candid and energetic look.

He studied special military tactics in the field and learned the Soviet jargon. When Mikhail Gorbachev spoke of perestroika in 1986, Schlegel praised his courage and was promptly reprimanded by the party. When the Berlin Wall fell, he lost his job working in "Verwaltung 2000" ("Administration 2000"), the military arm of the Stasi.

In the newly unified Germany, Schlegel wanted to stand on his own two feet and start up a business, for example in real estate. Up on the Baltic Sea coast near Rostock, he founded a development project and assumed the role of general manager. He thought that was how capitalism worked. Where there's a will, there's a way -- isn't that what the politicians in Berlin always said?

But he quickly realized that he was too old for a fresh start in the new society. His business partners disappeared into the woodwork when the company ran into problems. Schlegel had signed the contracts and couldn't pay the bills. The investors sued him and a state court gave him a two-and-a-half year suspended sentence. On top of that, he had back taxes to pay. "In the GDR, I led an official and unofficial life," he says. "But I never learned how to deal with capitalism."

Schlegel tried his luck in America. An acquaintance took him along to a party in Houston thrown by a multilingual Dane named Uwe Jensen. Now there was a man who seemed to know how the world worked.

Jensen lived near Highway 6 in southwestern Houston, in one of the poorer areas of the city, where many Chinese and Puerto Ricans live. The homes on Scenic Haven Drive are made of wood and painted in pastel colors. Jensen lived at number 15,527. He had a small pool and a wooden deck and he mixed good margaritas.

In the late 1970s, Uwe Jensen held a seat in the Danish parliament for a while as a member of the Progress Party, an extreme right-wing group that endorses protectionism and espouses anti-foreigner rhetoric. For a few months, he was a member of the Danish delegation to the United Nations before he traveled to Colombia as a businessman to establish contacts with the United Self-Defense Forces of Colombia (AUC). In Houston, he acted as a middleman for the Colombians, someone "who arranged the meetings between Romero and the German," as his lawyer Erik Sunde puts it, "and hoped that he'd earn some money with the deal."

The Texan Connection

On the evening in question, four days after the collapse of the World Trade Center towers in New York, Jensen has invited friends and acquaintances over for a few cocktails. He introduces Schlegel and Romero to each other. Romero asks the German to join him on the terrace where the two men light Cuban cigars and blow smoke rings into the starlit sky over Houston. Schlegel talks about his past with the Stasi and his Russian friends. Romero talks about Colombia, the hated rebels of the leftwing FARC and the righteous cause of the AUC.

Listening to Romero talk, one could almost imagine that the AUC was something akin to a knight in shining armor riding in to protect the Colombian people from the guerillas after the state had cut and run. Statements by Amnesty International and a report for the US Congress paint quite another picture of the AUC, however. According to these accounts, the umbrella federation of rightwing splinter groups is responsible for two-thirds of all human rights violations in Colombia, including 804 executions in the year 2000 alone. The Colombian government estimates that the AUC numbers 8,000 men.

It's also true that the US government, primarily the CIA, has long valued and protected groups like the AUC as a useful bulwark against leftwing revolutionaries in Latin America. US companies have played an important role in financing this dirty war. In March 2007, Chiquita headquarters in Cincinnati admitted that they had given the AUC payoffs to the tune of $1.7 million between 1997 and 2004.

With so much tacit support in the US for the AUC, Romero could feel safe and sound in Texas. He acted almost like a kind of honorary consul. He was a member of the establishment and the president of a haulage company called Poseidón Inc. In Houston he resided in a white colonial-style house with a driveway, two-car garage and slate roof.

It wasn't until September 2001 that the State Department yielded to international pressure and placed the AUC on its international list of terrorist organizations. Since then, the organization has needed people like Romero to survive -- and people like Romero need people like Schlegel.

Wired for Sound

After the two become better acquainted, Romero wants Schlegel to encourage his Russian associates to do business with the Colombians. They schedule their next meeting at Romero's golf club in two weeks' time.

Woodlands Country Club is located in northern Houston, in a spacious wooded area that appears as idyllic as the English countryside. It's a popular spot for the Texas upper class to go riding. The clubhouse is a mixture of Lions Club and conference center. From the wooden terrace, you can gaze down at an artificial lake and apartment houses.

Romero and Jensen have no idea that an FBI team has staked out their meeting with Schlegel from one of these apartments, where agents have set up directional microphones and cameras.

The FBI had been in the loop since that fateful September evening at Uwe Jensen's house. Immediately after meeting the Colombian, Schlegel called the police. Investigators were skeptical at first. Instead of inviting the German to their headquarters, they agreed to meet him at a Starbucks in downtown Houston.

Schlegel told them about his past career as an undercover man and revealed his Stasi code name. Bureau agents ran this information through the "Rosenholz" files, a series of Stasi documents seized in East Berlin by the CIA in the confusion following the collapse of East Germany.

After a few days, the FBI was convinced that Schlegel was telling the truth about his past. From that point on, he worked in close cooperation with federal investigators to arrange meetings like the one at the country club.

'We'll Pay With Cocaine'

Romero and Jensen arrive shortly before 8:00 pm at Woodlands. They sit outside to enjoy the mild autumn weather. Photos of the meeting show that the Colombian chose a place where he could sit with his back to a stone column. This may have given him a clear view of the terrace, but he was also looking straight into the lens of the FBI photographer who was hiding in the reeds and taking pictures of the men.

Schlegel places his car keys on the table, together with his cell phone and a pager wired up as a recording device, which the FBI have christened "Eagle." That's how he used to do it back in the old days. It's an old Stasi trick: Nothing laid out in plain view arouses much suspicion.

Romero orders fillet of beef with baked potatoes and a piece of New York cheesecake. A speech by George W. Bush is being shown on a nearby TV. "That little shit," hisses the Colombian.

Schlegel recalls that Romero got down to business when they started eating dessert. The Colombian explained that each group needed a light automatic weapon, "and each company needs a heavy submachine gun," plus grenade launchers for storming fortified villages.

"We'll pay with cocaine," says Jensen as they leave. "The price depends on where you pick it up." If Schlegel and the Russians collect the goods in Colombia, then coke with a street value of half a billion dollars will cost just $25 million. Those are the profit margins in the business.

Aiming High

On the morning after the meeting at Woodlands, a black van with tinted windows rolls into the parking lot of Café Antone's, a nondescript coffee shop kitty-corner from the Houston headquarters of the FBI. Schlegel gets in, and the van threads its way back into traffic. Nobody is supposed to see the German entering the building.

The agents slip Schlegel into the office building via an underground parking lot and a tunnel and bring him to a conference room on the fourth floor. Five investigators are sitting in front of a whiteboard hanging on the wall. "What do we do now?" asks Mark Kirby, a West Point graduate who speaks fairly good Russian and has taken over the case for the FBI. "Should we arrest Romero and Jensen, or should we wait?"

Schlegel picks up a pen, writes Romero's name in the middle of the board and draws two arrows. One points downwards. This represents the rank-and-file, the small fish, Romero's people in Houston. The other points upwards. At the top are Colombia, the jungle and the AUC leaders.

"Who do we want to reach?" Schlegel asks the group. He has an extraordinary sense of timing and could just as well be selling electric blankets or handheld vacuum cleaners. Right now he's selling a plan, with the help of an Einstein reference. "Man can achieve anything. It's just a question of how often he tries," he says and points to the names on the board. "We can catch Romero, but we can also get to his bosses. You just have to say how high you want to go."

The FBI agents are not quite sure what to make of the Einstein reference. But they do understand that this is a golden opportunity for advancement and fame. They have enough evidence to put Romero and Jensen away for a long time, but that's not enough to make a big splash -- not enough to justify the US attorney general appearing on TV. After a moment's silence, one of the agents clears his throat. "As high as possible," he says. "We want to go as high as possible."

'The Craziest Thing I'd Ever Heard'

To attain this objective, they have to suck the Colombians in. The more weapons they order, the more spectacular the court sentences. And the kingpins of the AUC have to be lured out of Colombia -- not even the FBI can get them if they are in the guerilla strongholds in the jungle.

It's a bold -- even foolhardy -- plan that Schlegel and the FBI concoct. The idea is for the US government to fly in Russian and German weapons from the former East Germany -- decommissioned equipment from the National People's Army that they can put on display for the AUC as if they were staging an arms trade fair for paramilitaries.

Schlegel doesn't want to wait until the AUC places an order. He creates a kind of mail order catalogue in the form of a PowerPoint presentation with pictures of the old NVA arsenal taken by an FBI photographer. The supposed delivery will be simulated using containers on landing craft in Costa Rica, a country that maintains excellent relations with the US and where the Colombian commandants can easily be arrested. That's the plan.

"It was the craziest thing I'd every heard," recalls one of the agents involved in the operation, a man with 25 years of experience in the Bureau. "Schlegel suggested things that nobody else would have dared. We totally provoked the AUC to draw them out of their hideout. It was highly risky for all of us."

During the operation, the FBI field office in Houston had to consult with FBI headquarters in Washington, DC a total of 10 times as the scenario became increasingly complex. The FBI ended up investing several million dollars in the case.

By this stage it had become a worldwide operation. Meetings were held in Houston, in Panama and in London. Even Scotland Yard had been briefed. Hotel rooms were bugged and placed under camera surveillance; every word spoken was recorded by the investigators.

The negotiations are led by an undercover agent with the code name "Alexander" -- a man assigned to the operation by the narcotics police division in Miami. "Alexander" is a native Ukrainian who wears a gold chain and a Chopard watch. Schlegel introduces him to the Colombians as a rich Russian who represents the generals in Moscow.

Now the German takes a back seat. It's for his own protection, of course, but the FBI also wants to avoid becoming too dependent on a single undercover informant. After all, he's still a wild card from a foreign country, and the FBI can't be totally sure whose side he is on -- is he on the American side, the Russian side, or is he just acting on his own behalf?

The Undercover Chameleon

Schlegel can come across as very American. He rides a Harley-Davidson and has six pairs of cowboy boots in his closet. He knows how to joke around with his FBI case officer as if he had been born and raised in the southern US.

But when his cell phone rings and Moscow is on the other end of the line, he can also come across as very Russian. "Privet, kak dela?" ("Hey there, how's it going?") He could be standing on the Arbat in Moscow, fluently discussing his business deals in Russian as if it were the most natural thing in the world.

There is something chameleon-like about him. If necessary, he can blend into his surroundings until he is virtually unrecognizable. That's his strongpoint, but it's also a weakness for the FBI because it leaves an element of risk.

When Schlegel returns from a trip to Moscow, the FBI wires him up to a lie detector to test his loyalties. They tie his arms to chair armrests and fix a strap across his chest. Electrical clamps on his fingers measure his pulse and perspiration, while a camera registers any changes in his pupils.

He is subjected to tough and repeated questioning. "Have you been hired by a foreign power? Are you receiving money from a foreign power?" The only accepted answers are "yes" and "no," and it goes on like this for an hour and a half. They attach Schlegel to the machine four times -- and he passes the test four times.

"We simply couldn't believe that he wasn't working for the Russians or another intelligence agency," says one of his former FBI case officers. The Bureau agents have a hard time understanding how he could serve his comrades in East Germany and then go to work for the capitalists. But they can see that the Colombian drug cartel is slowly but surely falling into the trap.

On the Virgin Islands, the US Department of Defense has prepared a warehouse where the weapons are displayed. The AUC has dispatched their military expert from Colombia, a woman code-named "Raquel." She examines the deadly olive-green arsenal.

Shortly thereafter, high-ranking Colombians appear for the first time at a meeting in Panama: Comandante "Napo" and Comandante "Emilio," two regional leaders of the paramilitary organization. This is just one level below Carlos Castaño, the all-powerful boss of the AUC at the time.

The Bust

The comandantes are satisfied. They order 9,000 assault rifles, grenade launchers with 300,000 shells, 54 million rounds of ammunition, two shoulder-launched SA-7 anti-aircraft missiles, 300 pistols -- all deliverable to Costa Rica.

In exchange, they promise to fly five tons of pure cocaine to Europe in a Russian Ilyushin 76. "With a load like that," says Uwe Jensen's lawyer, "you could lay down a white line from here to the moon." That's the deal.

The deal falls through on the day of the agreed handover. On 5 November 2002, investigators arrest Carlos Alí Romero and comandantes "Emilio" and "Napo" in the Marriott Hotel in San Antonio de Belén, Costa Rica.

Virtually at the same moment, an agent knocks on the door of Uwe Jensen's home on Scenic Haven Drive and takes the Dane into custody.

The FBI promised Schlegel that Jensen would be treated leniently. They propose a deal based on his contacts to the CIA during his stint in Colombia. The Dane accepts and starts singing, severely incriminating himself, Romero and the AUC in the process. He hopes this will result in a lighter sentence, but he is mistaken. In May 2006, a judge in the United States District Court in southern Texas sentences him to 14 years in prison, with no possibility to appeal.

The Dane is now 72. He will be 85 when he's released. "For Uwe Jensen," says his lawyer Erik Sunde, "this is like a death sentence." Comandante "Napo" is condemned to 15 years, "Emilio" is sentenced to life in prison, the arms inspector "Raquel" is given five years and one month.

Carlos Alí Romero is still waiting for his case to go to court. His lawyer declined to be interviewed for this article.

Generous Thanks

Schlegel feels like the Americans have been using him, and not just because Jensen didn't receive the lenient prison sentence he thought they had agreed upon. The German had helped to prevent the US from being flooded with drugs, but he had also played the role of agent provocateur and persuaded people to commit crimes -- people who, without his encouragement, would possibly have been all talk and no action.

On the evening of the arrests, when Schlegel sees the images of the attorney general appearing on TV, he realizes that he has legitimized a policy of the Bush administration that is based on ruthlessness and provocation.

The FBI has expressed its thanks to Schlegel with a certificate. The blue leatherette document attests that, thanks to his help, "the FBI's ability to carry out its investigative responsibilities to the American people has been greatly enhanced." Schlegel can "be very proud" of his "valuable contributions to the success achieved," it reads. Robert S. Mueller, the powerful director of the FBI, personally signed this rare document.

But it's a slightly different story as far as the agreed payment that was supposed to free Schlegel from any financial worries for many years is concerned -- Mueller's agents have so far transferred only half of the amount.

When Operation White Terror is successfully completed, the agents treat him to lobster and calamari at Cima, one of the best restaurants in southern Houston, with a view of the Gulf of Mexico.

He'll get the other half of his fee later, they promise with a grin -- after the next job. They already have something in mind.

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