Fiona,
Actually, it seems like that scenario would make him *less* likely to be developing weapons. Put it this way: Mellanby is a rebel, who has just cut a deal with the authorities to give them research which he knows they will use on his fellow rebels. Knowing that his own research has just led to the death of his friends, isn't this a good reason to, like Alfred Nobel, hang up the old tool-belt? And if he's developing weapons on Sarran with the intention of selling them to the Federation later... then what that says about his ethics is very, very sinister indeed.
The problem is that he is a fugitive. Unlike Nobel, he can't take up a career as a philanthropist, as he'll be found out by the Federation. Also, there's the question of where he gets his money from. Nobel was a millonaire when he gave up making dynamite.
He knows that he is good at weapons research and development, so continues with it, but has a belief that if his weapons are used to kill (like in the rising on Earth) they will produce results that will hurt him and his family.
But, as Dayna asks, why go on doing it in that case? Why not design nonfatal weapons, or other devices using the same technological skills (after all, a lot of weapons research used in WWI and II has since been turned to applications in everything from construction to airline safety)? If his weapons are used at all, they will *naturally* be used to kill, else what's a weapon for? Look what happens when Servalan gets hold of a gun. Look what happens when Chel gets hold of a gun. Look what happens when Dayna gets hold of a gun... For him to take the attitude you outline is selfish at best and criminal at worst.
I suggested this was a possibile explanation for his behaviour. If so, it is as you say, selfish or criminal.
I recall the 'Voyager' episode you mentioned, with the villain called Seska, something which had me in fits of laughter. Then, I also recalled a character in 'Star Trek: The Next Generation': a woman called Vash, a name pronounced the same way as the French 'vache', the word for 'cow'.<bg>
The Angel episode you mentioned was 'She', which I regard as the worst episode in that very good first season.
Murray