The Oil and the Glory

A Kyrgyz airfield, a burger joint owner, and a $3 billion deal

Six months after a U.S. fuel contract contributed to the ouster of Kyrgyz President Kurmanbek Bakiyev, we appear no closer to knowing whether his opponents are correct in assuming corruption and other criminality in the deal. At issue is a $3 billion U.S. military contract with two companies registered at mail drops and in offshore ...

VYACHESLAV OSELEDKO/AFP/Getty Images
VYACHESLAV OSELEDKO/AFP/Getty Images

Six months after a U.S. fuel contract contributed to the ouster of Kyrgyz President Kurmanbek Bakiyev, we appear no closer to knowing whether his opponents are correct in assuming corruption and other criminality in the deal. At issue is a $3 billion U.S. military contract with two companies registered at mail drops and in offshore tax havens, and run by a cloak-and-dagger California native who makes Julian Assange look as open as Oprah, the Washington Post's Andy Higgins suggests in a weekend piece. The current Kyrgyz government says the contract enriched the Bakiyev family, and that the U.S. tolerated the situation to guarantee the longevity of Manas Air Base, which services the war in Afghanistan. Incidentally, Bakiyev alleged the same thing when he helped overthrow the Askar Akayev regime in 2005.

By approving such contracts, does the U.S. in effect cultivate the very corruption that it aggressively abhors in governments around the world? Scott Horton, a New York lawyer who sits on the board of American University in Bishkek, is among those who think so. At the Harriman Institute last Friday, Horton said:

Six months after a U.S. fuel contract contributed to the ouster of Kyrgyz President Kurmanbek Bakiyev, we appear no closer to knowing whether his opponents are correct in assuming corruption and other criminality in the deal. At issue is a $3 billion U.S. military contract with two companies registered at mail drops and in offshore tax havens, and run by a cloak-and-dagger California native who makes Julian Assange look as open as Oprah, the Washington Post’s Andy Higgins suggests in a weekend piece. The current Kyrgyz government says the contract enriched the Bakiyev family, and that the U.S. tolerated the situation to guarantee the longevity of Manas Air Base, which services the war in Afghanistan. Incidentally, Bakiyev alleged the same thing when he helped overthrow the Askar Akayev regime in 2005.

By approving such contracts, does the U.S. in effect cultivate the very corruption that it aggressively abhors in governments around the world? Scott Horton, a New York lawyer who sits on the board of American University in Bishkek, is among those who think so. At the Harriman Institute last Friday, Horton said:

The latest Transparency International corruption index is out, and it shows that countries occupied by the United States, in which U.S. contract awards have decisive importance to the economy, are two of the five most corrupt on earth. These nations have, moreover, become dramatically more corrupt since the U.S. took over. What is the relationship between having a large U.S. military installation and military contracting on your territory and corruption? The TI index points to a direct relationship. The U.S. talks a good tune about democracy, transparency and the rule of law. What it delivers is just the opposite.

(Full speech transcript here.)

The companies appear to be controlled by Doug Edelman, a Californian who somehow parlayed the American Bar and Grill, his Bishkek-based beer-and-hamburger joint, into one of the premier, single-source contracts in the entire Iraq and Afghan wars. We say “appear to be,” because no one will say who actually does own or control Mina Corp. and Red Star Enterprises, the two companies in question. There is no office with actual people in it. Edelman himself is somewhere in London, and not talking. That left Higgins talking to Edelman’s ostensible partner in the deal, a 35-year-old Kyrgyz named Erkin Bekbolotov, and Mina’s director of operations, Chuck Squires, a retired U.S. military intelligence officer.  

Bekbolotov told Higgins that he is glad to be suspected of being a CIA front, because it’s mysterious and makes him look locally powerful, though he says he isn’t connected to the intelligence agency. As for Squires, he got to know Edelman over cheeseburgers at the grill while he served as U.S. military attaché in Bishkek in the late 1990s, then finished off his 27-year military career as a Central Asia adviser to Central Command, which now runs U.S. military operations in Afghanistan and also Kyrgyzstan. Squires says that accusations against Mina “are all garbage. This is a legitimate company. Always has been.”

In a hilarious section of the piece, Higgins puts Mina’s and Red Star’s claims to the test. Bekbolotov tells him the companies employ 450 people, but won’t say where for security reasons. What type of security reasons, one might wonder. Whatever the case, Higgins takes a couple of planes to their listed addresses. He writes:

At an address in Gibraltar used by both Red Star and Mina is a law firm that specializes in “virtual office services.” Mina’s London office consists of a small glassed-in cubicle. An address in Toronto that Red Star used to win its first Pentagon contract turns out to be a business center in a high-rise tower.

There is not monolithic U.S. support for the status quo, Josh Kucera writes at The Bug Pit. The National Security Council isn’t so sure and would prefer more transparency, but is being confounded by the Pentagon, which actually runs the show in the region, and supports the current contract. At the same conference where Horton appeared last Friday, Kurt Donnelly, the NSC’s director for Central Asia, conceded that “mistakes” were made in connection with the fuel contract, but added that the administration has moved to correct them.

The contract is due to be renewed imminently — some say as soon as today.

<p> Steve LeVine is a contributing editor at Foreign Policy, a Schwartz Fellow at the New America Foundation, and author of The Oil and the Glory. </p>

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