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Posted at 8:53 PM ET, 07/21/2010

House panel gains cooperation from firms in Kyrgyz air base probe

By Jeff Stein

After weeks of tense negotiations, a House oversight subcommittee has gotten promises of cooperation from two secretive companies at the center of allegations regarding corruption in aviation fuel contracts at the big U.S. air base in Kyrgyzstan.

The objects of the panel’s attention are Douglas Edelman, a Californian with extensive business experience in Moscow and Central Asia, and Erkin Bekbolotov, a Kyrgyz national. The men are partners in Red Star Enterprises and Mina Corp. Ltd, firms that were awarded sole-source, classified, $1.4 billion Defense Department contracts to supply fuel to Manas in 2002.

They, along with Chuck Squires, a former U.S. Army attaché at the American embassy in Bishkek who manages company operations at Manas, have figured prominently in several reports that kickbacks were paid to ruling officials in Kyrgyzstan in connection with the contracts.

The subcommittee on National Security and Foreign Affairs, chaired by Rep. John Tierney (D-Mass.) undertook an investigation of the contracts in April, when the second of two Kyrgyz regimes with a reputation for corruption was driven from office within five years.

"Two overthrows of the government there have been linked to corrupt dealings at Manas airbase," Tierney said last month. “That’s what we’re looking into.”

A committee investigator said Wednesday that, after being served with subpoenas, “the companies are cooperating and providing documents and individuals for depositions.”

Investigators are also interested in whether Defense Department officials were aware of, or even tacitly approved of, alleged payments to the U.S.-backed ruling families, whose ousters were fueled by widespread disgust among the Kyrgyz with corruption.

A source said the congressional investigators were “asking questions about what the department knew about arrangements between the company and the first family and whether the department approved of the arrangements.”

“The heart of the investigation,” the source said, “is why Red Star and Mina Corp. were not investigated under" the Foreign Corrupt Practices Act, which forbids U.S. companies from paying bribes or kickbacks to foreign officials.

The portrait drawn of Red Star and Mina Corp. in the media as “rogue contractors that went bad,” the source said, may be wrong.

Little is known about the private firms, which were registered in Gibraltar for privacy reasons.

Bekbolotov, in particular, was said to be close to the country’s most recently deposed president, Kurmanbek Bakiyev. Neither he nor Edelman could not be reached for comment.

Both are adverse to publicity. Bekbolotov recently sued the Paris-based newsletter Intelligence Online for “invasion of privacy,” after it merely reported the location of an apartment he had bought in Paris. The suit was thrown out.

The oversight panel has been criticized for moving too slowly and timidly. But the committee investigator rejected the charge, saying it has been carefully gathering the documentary groundwork for quizzing company and government officials.

He said the panel had obtained 43,000 documents from the Defense Department and 17,000 pages worth of e-mails from Red Star-Mina Corp. It had also requested documents from the State Department.

“More are coming,” he said on condition of anonymity because he was not authorized to speak for its chairman, Tierney.

Meanwhile, sources said the Defense Department closed its bidding window this week on a new contract to supply aviation fuel to Manas, a critically important staging area for the war in Afghanistan.

Defense Department officials declined to confirm the information after several requests Wednesday.

By Jeff Stein  | July 21, 2010; 8:53 PM ET
Categories:  Intelligence, Military  
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