CONSPIRACY WATCH: Iraqi Government Purchases Arms on Black Market

"It seems strange that a pro-Western government, supported by the U.S. Army and other NATO countries on its own territory, would seek Russian or Chinese weapons through questionable channels," the anti-Mafia prosecutor wrote in seeking the arrest warrant that short-circuited the complex deal.

And so another shady arms deal is opened up for the world to see, all thanks to those "anti-Mafia prosecutors" in Italy, where they still take shady international business deals with dead seriousness.

Is it 1987 all over again? Not quite. The proceeds from the sale (a mere $6.6 million profit) would line the Italian conspirators' pockets, not fund U.S.-supported militias in another corner of the world. But the deal is of such questionable, unbelievable proportions that it's sure to reach wider than just a few Italian-Iraqi connections. The U.S. command in Iraq denies involvement, despite this:

Investigators say the prospect of an Iraq deal was raised last November, when an Iraqi-owned trading firm e-mailed Massimo Bettinotti, 39, owner of the Malta-based MIR Ltd., about whether MIR could supply 100,000 AK-47 assault rifles and 10,000 machine guns "to the Iraqi Interior Ministry," adding that "this deal is approved by America and Iraq."

The results of a few sinister Iraqi politicos or a wider scandal involving Russia (the Iraqis insisted on Russian-made, as opposed to Chinese-made, assault rifles) and other countries? The question is: Where did the $40 million come from to make the purchase? U.S. taxpayers? Oil revenue? It sort of makes the Oil-for-Food scandal relatively toothless.

Stay tuned.