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

by Walter Pincus Washington Post
May 5th, 2010

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.

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