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Posted at 7:25 PM ET, 04/22/2010

Ex-Army intelligence officer focus of Kyrgyz corruption probes

By Jeff Stein

A former U.S. Army intelligence colonel has emerged as the focus of investigations into corruption in Kyrgyzstan, the Central Asian host to an American air base and hub of fuel supplies to NATO forces in Afghanistan.

Lt. Col. Charles “Chuck” Squires is a former defense attaché at the U.S. Embassy in the Kyrgyz capital, Bishkek. Shortly after the Sept. 11, 2001, attacks, Squires formed a company that, despite having no track record in logistics, was awarded a sole-source contract to supply fuel to U.S. aircraft at the Manas base, according to congressional testimony and an investigation by The Nation magazine.

“A graduate of the Russian studies program at Harvard University, Squires appears to enjoy excellent rapport with American diplomats and military officers and good relations with senior figures in Kyrgyzstan, including President Bakiyev’s son Maksim, in whose company I have previously observed Squires at Bishkek’s Hyatt Regency Hotel,” Scott Horton, an adjunct professor at Columbia Law School told a House Oversight subcommittee hearing on Thursday.

Squires’s Red Star Enterprises, and another firm by the name of Mina Corp., share an official London address “in a former public housing complex that now leases office space to a multitude of small-time companies, escort agencies and business advisory services,” according to report by Eurasianet.org.

“At least one other figure involved in the London management of Red Star,” Horton told the national security subcommittee, “has close ties to the U.S. intelligence community.” He did not elaborate.

Red Star, Horton told the panel, appeared “out of nowhere to administer hundreds of millions of dollars in supply contracts and which appears to have no significant customers besides the Defense Department.”

“It was a huge contract, totaling $240 million over three years,” former NBC investigative reporter Aram Roston wrote in this week’s issue of The Nation magazine. Another, bigger one followed.

And soon enough, the family of President Askar Akayev, who led the country until 2005, had bustling businesses going at the base, too.

“Even if the Kyrgyz government wasn't getting paid much for the base, the Akayev family was reaping tens of millions,” Roston reports.

“It was heavily involved in business at the airport, running the two companies that operated as Red Star's subcontractors. One of them was run by Akayev's son, and the other by his son-in-law, and from 2002 to 2005 Red Star, operating on its US government contract, paid the firms about $120 million.”

The departments of Justice and Defense have looked at Red Star’s operations at the base and declined to prosecute, saying they found nothing illegal.

Outside investigators trying to find out the particulars of the contract, meanwhile, such as the price per gallon the Defense Department is paying for the fuel, have been hindered by a “national security” cloak thrown over the contract.

"Full and open competition need not be provided for when the disclosure of the agency's needs would compromise the national security, " according to the rule, which Roston dug up.

And “national security,” evidently, was defined as helping keep the pro-U.S. Akayev family in power. That’s the way the locals began to see it.

“It may have just been business,” Roston writes, “but the way Kyrgyz investigators later saw it, Red Star, the prime contractor, was the cut out for funneling funds to the Akayev family.”

Popular discontent with corruption in Kyrgyzstan finally erupted in the so-called 2005 Tulip Revolution, which chased the Akayev family from power. But Akayev’s successor, Kurmanbek Bakiyev, settled into the old ways, until he, too, was forced out on April 7.

Now the U.S. has no firm ally in Bishkek.

Each chapter of the drama gave off the the odor of corruption at the U.S. air base. Kyrgyzstan’s once-fervent support for the U.S. presence at the base has evaporated, witnesses told the panel.

Barnard professor Alexander Cooley, author of “Base Politics: Democratic Change and the U.S. Military Overseas,” urged U.S. officials to help the provisional government not just root out the corruption but “turn Manas-related payments and service contracts into a public benefit for Kyrgyzstan as a whole, rather than a private revenue stream for connected insiders.”

That still leaves the mysterious circumstances surrounding the sole-source contract Squires obtained from the Defense Department to supply aviation fuel to Bagram air base in Afghanistan, worth upwards of $1 billion, to explore.

And where is the mysterious Col. Squires? Not easily found.

“Chuck Squires, the director of operations of Red Star/Mina Corp., declined to answer any questions from EurasiaNet.org on April 19 and referred all inquires to a Mina Corp email address.,” the Web site said.

Maybe subcommittee chairman John F. Tierney, D-Mass., will have more luck.

On Apr. 12 he sent letters to Red Star, Mina Corp., the departments of State and Defense, and the FBI asking for details on the contracts.

Their answers are due May 3.

By Jeff Stein  | April 22, 2010; 7:25 PM ET
Categories:  Intelligence, Justice/FBI, Military  
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Comments

It is wrong that the US has no allies in Kyrgyzstan. Roza Otunbayeva is fabulous. I knew her when she was Ambassador in DC and we would do well to cultivate her -- by helping clean up the corruption. If that means Justice needs to hit somebody for violations of the Foreign Corrupt Practices Act, let's get going. www.FreeingTibet.com

Posted by: JohnRobertsFreeingTibet | April 22, 2010 8:41 PM | Report abuse

So, if a lot of people got jobs they wouldn't have had otherwise this is bad how? The area isn't used to any sort of huge interaction with the rest of the world, and all of a sudden we want them to help fight against people who say one thing and then blow up innocent people on another. There's been a great deal of speculation about the intentions of Russia over the base there, but the problem is that it's in the best interests of Russia to have it there. They do not seem real happy with the notion of having Afghanistan be the same problem for them that they've had in the past with it.

There seems to be a missing transition phase where business happened in enough of a way to spread out contracts locally to fair market bids. The instability there suggests that their self-governance capacity is a bit of a mess however.

They at least get along well enough to where they are not blowing each other up for lack of any better ideas.

Posted by: Nymous | April 22, 2010 10:17 PM | Report abuse

Sole Source Contracts have always been a problem in the Defence Department. There are many other companies who could have served Bagram so a sole source should not have been authorized by procurement. I do not think this will end with Chuck, there are people above him who made the authorization.

Posted by: aqc6784 | April 22, 2010 10:43 PM | Report abuse

Sometimes there is only one source for some things. So it's an unavoidable problem, and the commercial sector & industries all have the same problem. There's nothing always bad about that, it's just a fact of existence.

It's probably more fair to say that the DoD finds & discloses more of them than corporations do.

Posted by: Nymous | April 23, 2010 3:35 AM | Report abuse

This isn't exactly transparency in government.

Sounds like Squires worked out quite the deal for himself.

If we're going to give money to a government, we should be public about it, so as not to encourage this type of corruption.

The government should come clean about it's involvement here.

Posted by: postfan1 | April 23, 2010 4:04 AM | Report abuse

let me get this straight...

the u.s. has this "col squires" working for the agency in bishkek...

who is having a "relationship" with the son of the president of Kygrstan....

and in order not to be "outed"... and ...

so he can pocket some "retirement" money...

he forms his own company while also serving the agency/state department....

and "double dips"... by "winning" a defense contract...

helps enrich the Kyrg family in power...
they get overthrown...

so he tries doing it to the next family who takes the helm... and they get overthrown too...

but "col squires" doesn't get caught with "the candlestick in the dining room with the son"....

and nobody knows whodunnit?

Posted by: FranknErnest | April 23, 2010 6:18 AM | Report abuse

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