KYRGYZSTAN: Kyrgyzstan investigating firms that sold fuel supplied to U.S. air base

Kyrgyzstan's interim government has begun a criminal investigation of
local companies -- allegedly controlled by the son of ousted president
Kurmanbek Bakiyev -- that were sources of fuel supplied to a key U.S.
air base in the Central Asian country.

"A criminal case has been launched against Maksim Bakiyev," Ulan
Diykanbayev, a spokesman for the prosecutor general's office, told the
Reuters news service.

The Kyrgyz companies, which allegedly did not pay customs duties on jet
fuel from Russia, sold that fuel in turn to London-based Red Star
Enterprises and Mina Corp., a Red Star subcontractor. Both firms had Defense Department contracts to provide
oil products to the Manas air base, a major refueling and transit hub
for U.S. and coalition troops, as well as to the U.S.-run Bagram air
base in Afghanistan.

Corruption allegations involving supplies to Manas have repeatedly
surfaced in Kyrgyzstan and the United States.

In 2005, the previous Kyrgyz president, Askar Akayev, was forced out as a
result of the Tulip Revolution amid allegations that his son and other
family members were profiting from the fuel sales.

When Kurmanbek Bakiyev took over five years ago, he initiated an
investigation of those allegations and asked the FBI for assistance. The
Kyrgyz prosecutor and the FBI ended their inquiries without disclosing
any findings.

When Bakiyev was forced out early last month by another popular
revolution, the allegations of corruption again included charges that
presidential relatives had siphoned off money from fuel sales to Manas.
Bakiyev has since found refuge in Belarus, whose president, Alexander
Lukashenko, said Tuesday that he would not return Bakiyev to Kyrgyzstan
to face charges even if the interim government in Bishkek sought to
extradite him.

Mina and Red Star, which have received more than $1.5 billion from the
fuel contracts since 2005, have never disclosed their ownership. In the
wake of last month's allegations, Mina released a statement saying it
had confirmed to the Kyrgyz and U.S. governments "that it has never had
any ownership affiliations with Kyrgyz government officials, nor has it
ever directed any U.S. government funds to Kyrgyz officials."

The latest U.S. contract for fuel delivery to Manas, which the Defense
Logistics Agency (DLA) signed with Mina in June 2009, was for a year,
with two one-year options.

Awarded without competitive bidding because of national security
concerns, it was estimated to be worth more than $725 million if the
future options were exercised.

On Tuesday, DLA spokeswoman Mimi Schirmacher said no decision had been
made on whether the options would be picked up or the contract re-bid.
"Any exercise of the option and/or follow-on competition of the Mina
Corp. contract will be in accordance with federal acquisition
regulations," she said in a statement.

Last month, the national security subcommittee of the House Committee on
Oversight and Government Reform began its own investigation of the fuel supply program in Kyrgyzstan.

AMP Section Name:War & Disaster Profiteering
  • 185 Corruption

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