How an ex-Nazi arms dealer sold fighters to India and Pakistan during an arms embargo

If this were fiction, it could hardly be a more remarkable story. But a decorated ex-Nazi-turned arms dealer actually sold fighter aircraft to both India and Pakistan, which were facing an arms embargo after the 1965 war.

The episode is recorded in the authoritative books, The Shadow World: Inside the Global Arms Trade, written by former South African MP Andrew Feinstein, and earlier, Private Warriors, written by Ken Silverstein and Daniel Burton-Rose. It is also narrated in detail by retired Indian Navy Vice Admiral Vinod Pasricha in his definitive book on the Sea Hawk aircraft, Downwind, Four Green.

The end of the Second World War left Gerhard Georg Mertins a major in the German Army and a recipient of the Knight’s Cross for bravery after the allied invasion in 1944. Mertins, along with German SS special forces operator Otto Skorzeny, had also participated in the raid to rescue Italian dictator Benito Mussolini after he was removed by the Italian Grand Council of Fascism and the king of Italy and imprisoned.

Mertins and Skorzeny were both also part of a German team sent to train Egypt’s military, with the blessing of the Gehlen organisation. The organisation was named after its founder, General Reinhard Gehlen, a Nazi in the custody of the US military intelligence after the Second World War, who was tasked by them to set up an intelligence organisation to conduct espionage across the Iron Curtain.

This organisation was later merged with the West German government’s intelligence agency, the Bundesnachrichtendienst (BND), and Gehlen became its boss.

According to Mertins’ hagiographer Heinz Vielain, the former paratrooper set up a company called Merex AG in 1963 at the request of Gehlen to facilitate the sale of weapons to other countries.

Extract: Private Warriors

Mertins) and Gehlen soon cut a deal. German intelligence would provide Merex information about which Third World countries were looking to buy arms, and the company would sell them what they needed, using false end-user certificates when necessary. "Any complication that arose for Merex were taken care of by [German intelligence],” Vielain wrote. “The most important thing was secrecy, that no one discover the real destination for the weapons."

In 1966, Merex sold ninety Luftwaffe surplus F-86 Sabre aircraft to the Pakistan Air Force (PAF). Since there was an arms embargo on Pakistan at the time, Feinstein writes, "The required subterfuge was undertaken with the help of the Shah of Iran, who allowed the planes to be delivered to Tehran by Luftwaffe officers and then flown to Pakistan by Iranian pilots dressed up as Pakistani officers."

Extract: Private Warriors

Mertins arranged for Luftwaffe officers to fly the planes to Teheran, where Iranian pilots dressed in Pakistani military uniforms secretly delivered them to Islamabad.

The PAF already operated F-86 Sabre aircraft, having acquired 120 of the aircraft from 1954 onwards.

But in August 1965, the Indian Navy had already placed an order with Merex for 28 surplus Bundesmarine Sea Hawk 100s and 101 fighters. These fighters arrived at Kochi (then Cochin on June 23 1966).

The Indian Navy, too, already operated Sea Hawks, having purchased them from the British in 1959.

Extract: The Shadow World: Inside the Global Arms Trade

When the India-Pakistan war erupted that year both countries were embargoed. But in June 1966 Mertins was given the go-ahead by German authorities to sell the planes to a company in Italy. He leased a ship, the Billetal, to transport the cargo. It set sail from the tiny German port of Nordenham (ostensibly en route to Naples), and once in the Mediterranean passed straight through Italian territorial waters, and wound its way down the Suez Canal and landed in India. Purchased for a reported $625,000 by Merex, the jets were sold for $875,000, raising a profit of around DM 5 million.

At precisely the time that the Billetal was carrying cargo for Merex to india, it’s sister ship, the Werretal, was on its way to Pakistan, traversing much the same route in order to deliver Cobra anti-tank rockets sold to Pakistan by Merex.

Although India was apparently unaware of the deals with Pakistan, the Indian Navy was in the know of this subterfuge.

Admiral Pasricha writes, "VAdm Karl-Adolf Zener, Chief of Staff, German Navy, visited India in 1965. During his meeting with our CNS, VAdm BS Soman broached the subject and they both discussed the possibility of Germany selling us some Seahawks, since they were no longer in service in the German Navy… Thereafter, it was one secret move after another, till 28 Seahawks found their way to Kochi in containers. In fact, the entire deal is best summed up in the words of RAdm SN Kohli, who was DCNS then. On Aug 2, 1965, he had said this on an NHQ file:

"It is important that this subject should have no publicity at all and be mentioned in as few circles as possible, as otherwise the deal is likely to be jeopardized since the Govt of West Germany, on principle, does not supply military aid to areas of possible tension. This deal has been specially arranged.”

Extract: Downwind, Four Green

Because of the sensitive nature of this deal, it was finalised through an arms dealer, Merex AG, Inter Armco International (Ed: Merex was an agent for Sam Cummings’ InterArms), though the actual discussions and the entire sale was implemented Government to Government. All transactions were thus planned by this company through a third country.

According to Admiral Pasricha, the original plan was for Merex to ship the aircraft directly to India, but the West German government had now raised objections "because of our hostilities with Pakistan".

Extract: Downwind, Four Green

It was then planned that MV Billetal (which necessarily had to be a German ship) would route through Italy (Naples), thereafter be diverted to South Africa and then go on to Kochi. It has not been able to ascertain how the ship’s papers were handled. Finally MV Billetal travelled directly to India, with just one transit halt through the Suez. She sailed from Bremen on 30 Jun ’66 via Nordenham and reached Kochi on 23 Jul ’66. Beekay, who reached Bonn on 23 Jun ’66, arrived just in time for this sailing. In December 1966, the contract for the second trip of MV Billetal was signed and the ship again came to Kochi on 16 Aug ’67, with Lt. S.P. Kwatra on board for this consignment.

"Beekay", here, was Commodore BK Malik, who escorted the first consignment of aircraft on the MV Billetal. Commodore Malik writes about his involvement in the affair in Downwind, Four Green, saying, "On MV Billetal, I was known as the Super Cargo, which means owner of the cargo, and given the owner’s cabin."

All of this caused a fuss in Germany and the US (since the Sabres were sold without the permission of the US government). The US Congress held hearings but no further action was taken because US intelligence agencies quietly owned up to working with Mertins.

According to Private Warriors, "Mertins always claimed that the United States – which favored Pakistan against left-leaning India – signed off on the transfer, and of this there can be little doubt. Congressman Stuart Symington, who later led a US investigation of the deal, concluded that 'Our own intelligence services knew exactly at the time that these F-86s were meant for Pakistan'."

Admiral Pasricha says in the book, "The initial price that Germany had quoted to us for these practically new Seahawks was only Rs 1.87 lakh per aircraft, which was minuscule compared to the price of Rs 9.34 lakh that we had paid Britain six years earlier for Mk III/reconditioned Seahawks. Then on Aug 9, 1965, NHQ through NA Bonn, requested the German Navy to consider a further reduction."

According to Pasricha, the total cost for the 28 Sea Hawks was DM 5.35 million. Obviously, the profit to Mertins from the deals with both countries was even higher. He writes, further, "The IN had overcome all hurdles and machinations in this clandestine, but exceedingly well-executed deal. This ensured that we had 28 additional Seahawks, with plenty of spares and ammunition. We also made sure that England never came to know of this sale. In fact, the Admiral of the Fleet, Earl Mountbatten visited India and met Admiral Soman during this period."

Extract: Private Warriors

The India-Pakistan conflict made Mertins a very rich man. He used part of the estimated $10 million in proceeds from the aircraft deals to buy two estates in Switzerland – one in the Alps, about 300 yards from a villa owned by Cummings – and a third on the Rhine near Bonn. He also bought a home in Bethesda, Maryland, where he established a US branch of Merex at offices on upper Wisconsin Avenue.

Mertins was prosecuted in Germany for violating the arms embargo but was cleared of any wrongdoing in 1975 after exculpatory evidence was presented to the court, which indicated that the German government had been, at the very least, aware of the arms transfer. Mertins even won DM 5 million in compensation after he sued the German government for the damage to his reputation.

The Pakistan Air Force deployed these ex-German Sabres in the next war with India in 1971. The Indian Navy, too, deployed the Sea Hawks in the war, which ended with the mutilation of Pakistan and the independence of Bangladesh.

Admiral Pasricha writes, "One of our major strengths during the 1971 war, had been the Seahawks that we had purchased from Germany," adding, "(I)t was only because of the availability of these German Seahawks that we ensured that Vikrant had adequate numbers for the 1971 war! Fourteen out of Vikrant’s total war inventory of nineteen Seahawks were the German 100s/101s."

It is unclear if the Indian government knew about the double-dealing of Mertins or when it discovered it. It is also unclear if the Indian Navy would still have dealt with Mertins, Merex AG and West Germany had it known they were also supplying fighter aircraft and other weaponry to Pakistan?

Mertins was later also involved in the Iranian-Contra scandal. Such was his reputation, manufactured or otherwise, that others paid him the ultimate compliment – that of imitation.

Extract: Private Warriors

During the 1980s, (arms dealer) Arif Durrani formed an American company called Merex. He told me he had no formal connection to Mertins, but picked the name to take advantage of the instant recognition it provided within arms business circles.

(This article first appeared on StratPost.)