A couple of points:
1) It's all in the language. Genocide is a loaded term. Extermination actually fits the situation better since blamps are not alive in the first place (and nobody is insulting them by calling them politicians).
(From dictionary.com)
gen·o·cide
[jen-uh-sahyd] Show IPA
noun
the deliberate and systematic extermination of a national, racial, political, or cultural group.
ex·ter·mi·nate
[ik-stur-muh-neyt] Show IPA
verb (used with object), ex·ter·mi·nat·ed, ex·ter·mi·nat·ing.
to get rid of by destroying; destroy totally; extirpate: to exterminate an enemy; to exterminate insects.
2) I've never heard of an arms dealer not wanting two or more parties to go to war. War is when the profits shoot sky high (pun intended)
3) In the vein of Leveki's comment earlier, if your character has any ranks in scholarship, use it to make a declaration that Catherine is having an affair with a werehorse since a mere werewolf can't cut it. (google Catherine the Great and Horse to see the historical context and have fun with the widespread rumour of the cause of her death).
4) This situation seems like what social combat is designed for. It's a shame that the GM isn't willing to go that route.
5) Although it's never happened to me in DFRPG, I have had a few campaigns derail at some point and devolved into inter-party violence. They may stir up the blood but, as long as no real-life friendships are jeopardized, they can be fun and make quite a story. In fact some of them are my more vivid gaming memories even if we had to start a new campaign shortly after.
6) When in doubt, follow the old Military Engineering Axiom: "There is no situation in the human condition that cannot be solved through a properly sized, shaped, packed, placed, timed, and detonated charge of high explosive!"
