I've been curious about this report for awhile. Too bad it's not online. (Thanks to prisonplanet.com for posting the Guardian article).

The Guardian (UK)
By Richard J Aldrich
April 22, 2002

America used Islamists to arm the Bosnian Muslims
The Srebrenica report reveals the Pentagon's role in a dirty war 

The official Dutch inquiry into the 1995 Srebrenica massacre, released last week, contains one of the most sensational reports on western intelligence ever published. Officials have been staggered by its findings and the Dutch government has resigned. One of its many volumes is devoted to clandestine activities during the Bosnian war of the early 1990s. For five years, Professor Cees Wiebes of Amsterdam University has had unrestricted access to Dutch intelligence files and has stalked the corridors of secret service headquarters in western capitals, as well as in Bosnia, asking questions.

His findings are set out in "Intelligence and the war in Bosnia, 1992-1995". It includes remarkable material on covert operations, signals interception, human agents and double-crossing by dozens of agencies in one of dirtiest wars of the new world disorder. Now we have the full story of the secret alliance between the Pentagon and radical Islamist groups from the Middle East designed to assist the Bosnian Muslims - some of the same groups that the Pentagon is now fighting in "the war against terrorism". Pentagon operations in Bosnia have delivered their own "blowback".

In the 1980s Washington's secret services had assisted Saddam Hussein in his war against Iran. Then, in 1990, the US fought him in the Gulf. In both Afghanistan and the Gulf, the Pentagon had incurred debts to Islamist groups and their Middle Eastern sponsors. By 1993 these groups, many supported by Iran and Saudi Arabia, were anxious to help Bosnian Muslims fighting in the former Yugoslavia and called in their debts with the Americans. Bill Clinton and the Pentagon were keen to be seen as creditworthy and repaid in the form of an Iran-Contra style operation - in flagrant violation of the UN security council arms embargo against all combatants in the former Yugoslavia.

The result was a vast secret conduit of weapons smuggling though Croatia. This was arranged by the clandestine agencies of the US, Turkey and Iran, together with a range of radical Islamist groups, including Afghan mojahedin and the pro-Iranian Hizbullah. Wiebes reveals that the British intelligence services obtained documents early on in the Bosnian war proving that Iran was making direct deliveries...

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From an 8/9/92 Newsday story, "'Belgrade Mafia' Seen Influencing U.S. Policy; Slow response tied to Scowcroft, Eagleburger", by Saul Friedman:

"President George Bush's long silence last week on reports of concentration camps in Bosnia-Herzegovina reflects what has been a paralysis in American policy toward the former Yugoslavia, experts say.

Many of them blame Washington's reluctance to take early, strong action against aggression by the dominant Serbs on the influence of such top American policymakers as <b>National Security Adviser Brent Scowcroft and Deputy Secretary of State Lawrence Eagleburger, who have long had diplomatic, personal and business ties with Belgrade..."</b>.

Curt Weldon wasn't the first Republican to do business with shady Serbs like the Karics.  The Karics jumped started their success in 1981 with a $500k business loan from a Washington-based "development bank".  

As ambassador to Yugoslavia during the Carter adminstration,  Lawrence Eagleburger cultivated a close relationship with Slobodan Milosevic, then head of  Yugoslavia's largest private bank. As a deputy secretary in the Reagan administration, Eagleburger helped the Yugoslavs run up $20 billion in foreign debt which they had no business borrowing. 

Eagleburger left the Reagan administration in 1984 to join Henry Kissinger's consulting firm. He was also the American representative for the Yugo and director of a Yugoslavian bank.

Newsday: "Scowcroft, another prominent member of the "Belgrade mafia," spent a year in Yugoslavia as an air attache in the Belgrade Embassy 30 years ago, but he is a specialist in Slavic languages and history. Scowcroft, who was vice chairman of Kissinger Associates before joining the Bush administration, often converses in Serbo-Croatian with Eagleburger...

Another key player in American policy toward Belgrade was <b>John Douglas Scanlan</b>, a 35-year veteran of the Foreign Service and a specialist on Eastern Europe, who served six years in Belgrade, including four as the U.S. ambassador in the crucial years before Bush became president. Scanlan generally supported Milosevic and reported favorably on his regime to the State Department, said a senior official, and he urged the continuation of Serb dominance in Yugoslavia for the sake of stability in the region.

After leaving the Foreign Service and serving for two years at the U.S. Army War College, Scanlan has returned to Belgrade as the <b> vice chairman of the Galenika pharmaceuticals company, which had been government owned until it was purchased by ICN Pharmaceuticals of Costa Mesa, Calif</b>. The parent company is controlled by California businessman <b>Milan Panic</b>, an American citizen who received special State Department permission to avoid the embargo against doing business in Yugoslavia and keep his citizenship here while becoming prime minister of Yugoslavia...". 

Very curious. Eagleburger pushed western banks to lend $20 billion to Yugoslavia while Milosevic ran the country's largest bank. I wonder where the $20 billion went.

The Karics ended up owning the bank and now they claim to be worth $4 billion.

And the Republicans all wanted to give Milosevic and the Serbs a break in the '90s.

Hmm...

I'm going to post more stories about the Belgrade mafia and the Karics in the comments below.