The main allegation is that Heeschen and Halsey “loaned” themselves over 100 million euros from the company account and promptly spent it on playboy luxuries such as mansions, aircraft (including a $12 million Bombardier and a $5 million Challenger) and a yacht.

Better than business class - this is how arms dealers travel

These investors loaned over €150 million to Heckler & Koch Beteiligungs (HKB – the parent company of Heckler & Koch) for the usual business development purposes but were spooked when KPMG‘s financial statements for 2008 flagged up that around €30 million had been loaned directly to the shareholders, with nothing to guarantee that it would ever be paid back.

As the complaint against Heeschen and Halsey wryly notes:

[...] the purported €30 million in “loans” have no loan term and the shareholders are not required to make any payments. A “loan” that never matures and requires no payments is not a loan

Quite.

After concerns were raised by KPMG, the investors started looking into HKB’s affairs with more than a little interest. Here’s a few highlights of the allegations contained in the complaint:

Soon after the borrowed money hit the corporate borrower’s (HKB’s) bank account, however, Heeschen & Halsey, instead of using the money for HKB’s business purposes as mandated, caused that money to be transferred to themselves, and they used it for a personal spending spree that shocks the conscience. They bought mansions for over €40 million, personal jets, a helicopter, a yacht, and more, leaving HKB with insufficient funds to repay the loan. This type of misuse of the borrowed monies was explicitly prohibited by the loan agreement, not to mention any concept of corporate propriety.

And they didn’t stop there:

HKB made no fewer (and likely more) than €108 million in “loans” to its shareholders (or their controlled entities) that are not in compliance with the Loan Agreement. Considering that the original principal of the Loan was €l00 million, the current outstanding balance is approximately €151 million, and HKB has only €96,000 remaining in cash after its distributions to shareholders [...]

Oops.

Reading through the plaintiff’s submissions (case number 603522-2009 in New York County, if you’re interested), it’s hard to come away with anything other than the impression that Heeschen and Halsey are a pair of playboys who forgot the law still applied to them. The opening salvos in the case were a series of letters and meetings where the lenders repeatedly asked for clarification and Heeschen and Halsey effectively said “we’re allowed to do this, go away”. They even made a PowerPoint presentation to that effect:

[...] HKB did little more at the meeting than regurgitate its July 30, 2009 conclusory contentions, only this time via a PowerPoint presentation instead of a letter.

Presumably with some nice animated transitions between slides, to really add weight to their argument.

One of the most interesting documents is the description of the poor chap trying to serve Andreas Heeschen with papers. It seems that poor Mr Heeschen repeatedly avoided meeting the solicitor, and apparently pretended not to be at home in the naive hope that the whole thing would just go away. That’s certainly not going to happen and, whoever wins this one, either the investment bankers or the arms dealers are going to lose.

Arms company Heckler & Koch has been in the news this week. It seems that H&K, whose international sales office is located in Nottingham, is still in the business of arming regimes that are well known to commit gross violations of human rights. We look at three examples from around the world.

Manipur, India

Victims of police violence: a pregnant woman and an unarmed suspect, executed in a crowded market in Manipur, July 2009.

Ever since the state of Manipur was annexed by India in 1949, there has been armed conflict between separatists and the Indian government. In 1958 the Indian government passed the notorious Armed Forces (Special Powers) Act (AFSPA), which gives military personnel powers to arrest or kill anyone they want within a so-called “disturbed” area.

The state of Manipur was declared a “disturbed” area, and was heavily militarised, with land across the state being confiscated to set up army camps. There followed decades of grievous human rights abuses, with Indian police and paramilitaries inflicting beatings, rapes, torture, forced labour, disappearances and extrajudicial killings, all the while protected from prosecution by the AFSPA.

Here’s one example: In 2004, Indian troops raided the home of a 32-year old woman called Manorama Devi, whom they suspected to belong to a separatist group. They arrested her and took her away. Her bullet-riddled corpse was found the next day outside a nearby village. She had been tortured and raped, and then shot in her vagina at close range.

Heckler & Koch cannot be unaware of the gross human rights abuses of its latest customers. The situation in Manipur has been documented for many years. However, that would not appear to be an impediment to business.

The Philippines

To discover the connection between Heckler & Koch and the worst ever atrocity against journalists, we have to go to South-East Asia and the Philippines. This archipelago nation has a terrible human rights record, with state security forces practising vigilantism, arbitrary arrest and detention, torture, disappearances and extrajudicial killings.

Filipino soldiers armed with modern Heckler & Koch G36 assault rifles.

The Philippines has also been one of H&K’s best customers. Over the years the Filipino police and military have been equipped with a variety of H&K assault rifles, sniper rifles and submachine guns.

The endemic corruption of the Filipino security forces provides one of the many routes by which H&K weapons flow from the legal arms trade to the black market. Last year, several high-ranking military and police officials were arrested for taking 72 H&K submachine guns from a police depot and selling them to a Taiwanese-led gunrunning syndicate.

The President of the Philippines is Gloria Arroyo. Until very recently, her chief ally in the south of the country was the Ampatuan clan, which ruled province of Maguindanao. The Ampatuans delivered many votes for Arroyo in the 2004 and 2007 General Elections, which were marred by widespread fraud and violence. In return, the Arroyo administration tolerated the Ampatuan clan’s internecine chainsaw murders.

The scene of the Ampatuan massacre

In the aftermath of the massacre, an arms cache was discovered next to the mansion of the Ampatuan regional governor. Among the weapons recovered was a Heckler & Koch HK11 machine gun.

Once again, there can be no way that Heckler & Koch is unaware of the state-sponsored violence and corruption in the Philippines. And yet the company has continued to arm the regime with the latest in assault weapons.

The US Marine Corps

During the US-led “War on Terror”, the US Marines have committed numerous war crimes and serious abuses of human rights. Among those that have come to light:

US Marine with H&K submachine gun

• During the 2004 offensives against the Iraqi city of Fallujah, US Marine snipers deliberately shot civilians and medical personnel and vehicles, killing thousands. The Marines’ tactical siege and destruction of the city amounted to collective punishment, which is a war crime.
• In November 2005, a US Marine unit went on a rampage in the Iraqi town of Haditha, using guns and grenades to slaughter 24 unarmed Iraqi civilians including women, children and old people. When interviewed, US Iraq war veterans described such acts as common, and said they often go unreported and almost always go unpunished. The Marines are responsible for similar massacres in Afghanistan.
• There has been widespread torture and abuse of detainees by US Marines in Iraq, Afghanistan and Guantánamo. Documented abuses include beatings, electrocution, burning, sexual abuse and mock executions.

Of course, none of this matters to Heckler & Koch, which stands to profit a great deal from the Marine Corps. H&K already supplies the Marines with submachine guns, and it was announced this week that H&K is almost certain to win a contract to supply the Corps with thousands of state-of-the-art automatic rifles in a deal worth millions of dollars.

Conclusion

In one week, three separate news stories have illustrated how forces that are well known to commit serious human rights abuses, war crimes and crimes against humanity are continuing to be armed with modern Heckler & Koch weapons.

These are only the latest examples in a disgraceful history of arming the world’s oppressors. If there is one lesson to be learned from 60 years of Heckler & Koch, it is that the company should not be allowed to reach 61. It should be shut down and its employees tried for complicity in the abuses that they have knowingly profited from.

There is a campaign against Heckler & Koch based in Nottingham called Shut Down H&K. Check the events listing for the next meeting or demonstration, and get involved!

Indigenous communities of the Peruvian Amazon have been protesting against new “Free Trade” laws that would open up their ancestral lands to drilling for gas and oil. Since April 2009, indigenous protesters have stepped up their protest, blocking road and river transport and shutting down oil and gas pumping stations. On June 6, Peruvian President Alan García ordered in the troops, and police opened fire using live rounds on a crowd of protesters.

Peruvian police armed with H&K rifles take up positions in Bagua

The shots came from rooftop snipers and a hovering helicopter as well as ground forces. A representative of Save The Children reported that children as young as four years old were wounded by indiscriminate police shooting. The bloody crackdown continues, with some estimates putting the death toll in the 80s. There are eyewitness reports of the Peruvian police hiding bodies by burning or dumping them in the Utcubamba river.

The Peruvian armed forces are only one of many deadly actors employing H&K’s tools for killing and repression in the world today. Two other conflicts that have been in the news lately are the bloody conclusion to the Sri Lankan Civil War, in which government forces were armed with H&K submachine guns, and the Taliban insurgency in Pakistan’s Swat district, in which both Taliban and government forces are armed with H&K rifles and submachine guns.

And to whom do the armed forces of Peru, Sri Lanka and Pakistan go in order to keep their weapons serviced and maintained? Could it be the Nottingham office of Heckler & Koch, which according to the company’s own website is responsible for “international customer sales and customer services outside NATO”?

Make no mistake about it: Heckler & Koch is not a respectable company. It is a purveyor of the tools of murder and repression, staffed by people without a conscience, owned by crooked millionaire playboys, and it needs to be shut down.

According to Human Rights Watch, the Georgian military “used indiscriminate and disproportionate force resulting in civilian deaths in South Ossetia”. However, that hasn’t stopped these war criminals from being customers of Heckler & Koch!

When Heckler & Koch applied for permission to supply 230 assault rifles to Georgia, the German government refused on the grounds that Georgia was involved in a war. But as any successful arms company knows, there are many ways to get around these obstacles, and sure enough, the German-made weapons showed up in Georgia anyway!

To quote the head of BITS, “It doesn’t matter how these weapons landed in Georgia; whether they were illegally exported from Germany, whether a licensed exporter violated German laws or whether a recipient of the weapons who acquired them legally in Germany, further exported them.”

The point is, that’s just how the arms industry works.

And which department of Heckler & Koch is responsible for sales to Georgia and other non-NATO countries? Check the corporate website: It’s Heckler & Koch GB, based at Unit 3, Easter Park, Lenton Lane, Nottingham NG7 2PX.

So next time you see pictures of wretched South Ossetian civilians clutching the bodies of their loved ones amid the shredded ruins of their homes, just remember: a company in Nottingham helped to make that happen.