Oil Money Fuels Corruption in Kyrgyzstan
After the visit of Richard Holbrooke (US Special Representative for Afghanistan and Pakistan) to Kyrgyzstan in early March 2010, there were speculations that the US reached an agreement with Kyrgyzstan on the renewal of the lease of Manas Transit Center (formerly called Manas Air Force Base) in its territory (outside of Bishkek, the Kyrgyz capital). Current contract for the lease is due June 2010.
Why Manas Transit Center is important?
Afghanistan. The Manas TC is the transit point for soldiers that stop over the base on the way to and back from Afghanistan. The airbase also hosts fuel transporters. Hence, it is most of all a critical site for refueling Air Force aircraft flying over Afghanistan. It accommodates the 376th Expeditionary Logistics Readiness Squadron (see Fact Sheet).
mission fast facts (Jan 2008 – Dec 2008)
- Fuel Offloaded from KC-135 Stratotankers: 194,453,400 lbs
- KC-135 sorties flown: 3,294 sorties
- Number of aircraft refueled over Afghanistan: 11,419 aircraft
- Passengers Moved: 170,000 personnel
- Cargo Moved: 5,000 short tons
flight issued 12,500,102 gallons of jet fuel in March.
In addition, the 22nd Expeditionary Air Refueling Squadron (KC-135 flying gas station group) celebrated the 16,000th sortie milestone on 10 April 2010.
Meanwhile 376th Air Expeditionary Wing broke its own record on 18 February 2010 by pumping 544,758 gallons of jet fuel in a 24-hour period. Previous record on October 8, 2009: 501,662 gallons in 24 hours.
Oil and Corruption in the same soup
Reportedly, Manas International Services Ltd. and Aalam Services Ltd. were the only companies in Kyrgyzstan with facilities to transport and store fuel at the Manas air base. Coincidently Aydar Akayev, the then President Askar Akayev’s son, was a part owner of Manas Ltd. And Adil Toiganbayev, the president's son-in-law, is said to be one of the owners of Aalam. Avcard, a Maryland aviation fuel company used those two companies as subcontractors there. The contract in early days of Manas Base was 250,000 gallons of jet fuel a day. [Why these two companies were supplying the fuel but an American company was the official contractor?] In early 2003, after the Pentagon reopened the contract for bidding, Avcard was replaced by Red Star Enterprises Ltd (a London ?, Toronto or Gibraltar based company), but Avcard’s deal with those two companies remained. In late 2005 Kyrgyz prosecutors and FBI agents investigated whether (Askar Akayev, the president at the time) and his family pocketed hundreds of millions of dollars, partly from Pentagon fuel contracts, before he was ousted in March 2005.
With over $1,069,266,941, Red Star had the 55th place in Top 100 Recipients of Federal Contract Awards for FY 2008 and number 3 Contractor for Fuels, lubricants, oils and waxes in 2008. Over $1 bn
contract and yet the company does not even a website. How discrete, no?
Now, the National Security and Foreign Affairs Subcommittee of the House Committee on Oversight and Government Reform is opening a wide-ranging investigation into the DoD’s fuel contracting practices at the Manas Transit Center in Kyrgyzstan. The investigation will seek to determine what relationship, if any, existed between Red Star Enterprises Ltd., its affiliate Mina Corp. and the family of nominal president Kurmanbek Bakiyev, whose administration collapsed amid political violence in Bishkek on April 7. Mina Corp. currently holds the contract for fuel deliveries to Manas. The contracts
previously were held by Red Star. Manas base is a key hub for US and NATO troops and materiel going to and from Afghanistan. (See, source)
Where is Maxim? Bakiyev’s son, Maxim, is believed to be in the US and is now wanted in Kyrgyzstan on criminal charges. The US government’s close relationship with the Bakiyevs has quickly emerged as a sore point in US relations with the new Kyrgyz leadership. (Source)
This story shows that talking only about military-industrial complex is just one side of the bigger story. There are two sides in corruption – corrupters and corrupteds. We can call these two as the group of greedy elites if you wish. A country like the US and a federal government institution like the DoD have always been shown as examples of transparency, justice and equality trinity. Where do they stand now? In the club or corrupters, or corrupteds or something else? The US government agencies should not be allowed to transfer contractor payments to overseas bank accounts. Moreover, they should investigate deeper the companies before giving any job.
For a simple tourist visa application USA asks hundreds of documents and questions. How come then it can give millions of dollars worth contracts to private companies without performing a thorough checking process? Why the reports of the Government Accountability Office on contractors are still neglected?
As far as fuel contracts to Afghan theater are concerned, I am not in a position of making recommendations. One recommendation mentions that the United States can publicly encourage the Kyrgyz interim government to nationalize the distribution of fuel to the Manas base. In less developed or developing countries corruption is an extremely big and important problem. And that neither nationalization nor liberal system would put an end to it. In order not to be perceived as a corrupter at least, the US government, for instance, could establish a company under DLA to take care of the fuel chain. Most of such a company’s employees would be hired through fixed-term contracts.
Additional info: see Kyrgyzstan: Business, Corruption and the Manas Airbase and More Aviation Fuel For Afghanistan, and Washington's Afghan Quandary
According to Fedspending.org: here are the contracts with Red Star:
2009 Q3: $90,362,237