Writing in "The New Republic," RFE's James Kirchick looks at a report from the U.S. Congress on fuel contracts in Kyrgyzstan under the government of Kurmanbek Bakiyev.
--Back To Basics
James Kirchick | The New RepublicJanuary 27, 2011
When an angry mob overthrew Kyrgyzstan’s autocratic president Kurmanbeck Bakiyev last April, one of the complaints heard most often on the streets of Bishkek, the country’s capital, was that the U.S. government had been complicit in propping up his regime. A former Soviet republic once known as the “Switzerland of Central Asia” because of its relatively strong civil society, Kyrgyzstan had suffered in recent years under Bakiyev from grinding poverty, widespread corruption, and government marred by cronyism and contempt for political opposition and independent media. And yet the United States remained a reliable supporter of the regime.
Though perhaps not the only reason Washington supported Bakiyev, certainly the biggest was the base that the U.S. military has maintained at Bishkek’s airport since 2001. It is critical to the war in Afghanistan; all U.S. troops journeying to the theater pass through the Transit Center at Manas, as the base is known. Rumors have long persisted that Bakiyev profited from the base through financial interests in Mina Corporation and Red Star Enterprises, the sister companies that supply jet fuel to Manas, and that officials in Washington might have known about these activities. After the president’s ouster, the controversy became so problematic, with the new Kyrgyz government repeatedly bringing it up in meetings with American officials, that the majority staff of the House National Security Subcommittee commissioned an investigation into the fuel companies’ contracts. But the final report, which came out just before the winter holidays, offered a surprising conclusion: There is “no credible evidence to support the allegation that President Bakiyev, his family, or affiliates were financially linked to Mina and Red Star.”
Still, many in Kyrgyzstan don’t buy the report’s findings. They continue to insist that Bakiyev exploited the base for personal gain, and that the U.S government either facilitated or ignored his activities. Even before the report’s release, the new Kyrgyz government called for the creation of a state-controlled fuel supplier and launched its own investigation into contracts at Manas. Then, in an interview with Radio Free Europe/Radio Liberty six days after the report was published, new President Roza Otunbayeva accused Mina of “wrongdoing.” Three days later, she intimated that Mina was trying to bribe her to keep its Manas contract (a company representative, she said, met with her son last July). And Prime Minister Almazbek Atambayev has said that the Bakiyevs are “behind Mina Corp.” Whether these claims of wrongdoing are accurate or not, what’s clear is that the United States has found itself in the middle of an embarrassing, international p.r. crisis—and one that it could have avoided.
Since its creation, Manas has played an outsized, and negative, role in Kyrgyz politics. The arrival of a major American military installation offered an easy opportunity for the political graft all too common in Central Asia. Not long after the base was established, the two operators supplying fuel to the airport were taken over by the son and son-in-law of Askar Akayev, Bakiyev’s predecessor, quickly raising allegations of corruption. After Akayev was ousted in the “Tulip Revolution” of 2005, the FBI, according to NBC, found that he and his family had operated a “vast international criminal network that stretched all the way to a series of shell companies in the United States.”
Bakiyev, who entered office promising an end to sleaze, also saw a chance to benefit from Manas. On a large scale, he used the base as international leverage. In 2009, in what was largely seen as a quid pro quo with Russian Prime Minister Vladimir Putin, Bakiyev abruptly announced plans to evict the Americans from Manas after being offered a $2 billion aid package from Moscow. In response, the United States offered to triple its rent payments to the Kyrgyz government—and Bakiyev allowed the base to stay. Thereafter followed widespread speculation in Kyrgyzstan that Bakiyev and his son, Maksim, had found ways to make money personally by involving themselves with Mina and Red Star. The Russian news agency Itar-Tass reported that Mina has contracts with fuel service companies controlled by Maksim Bakiyev, and, according to the International Business Times, officials in the new Kyrgyz government claim the former president’s son “skimmed as much as $8 million a month from daily jet fuel sales to the base.”
To investigate these allegations, the House National Security subcommitteespent over 8 months surveying more than 250,000 pages of documents and conducted numerous interviews in the United States, Kyrgyzstan, and the United Kingdom. The resulting report, “Mystery at Manas,” credits Mina and Red Star with assisting “one of the most complex and challenging logistical operations in U.S. military history.” But it also points to many problems with the companies. For one, their corporate structures are “buried deep under layers of shell companies formed in countries whose corporate laws are designed to facilitate secrecy and tax avoidance.” While the companies, which are legally registered in Gibraltar, insist that secrecy is fundamental to operating in Central Asia, where governments routinely ignore the rule of law, the report concludes that such obscurity has given credence to rumors of corruption. What’s more, the investigation found that the companies did collude with some Kyrgyz officials to falsify custom forms, in order to claim that the fuel, which was shipped from Russia, was being used for commercial and not military purposes. (This was to get around a vaguely worded Russian ban on exports used for certain types of weapons. )
And yet, the report found no evidence of what so many in Kyrgyzstan are convinced is true: that Bakiyev personally profited from the base. Some people I spoke to pointed out that Congress might not be the right outfit to expose the rough-and-tumble of Central Asia’s criminal networks and endemic corruption. “They are not detectives or special services,” says Edil Baisalov, a former spokesman for the interim government who recently formed his own political party. “They would never of course be able to pinpoint the exchange of suitcases full of millions of dollars that changed hands.”
It is impossible to know whether there is any truth to Baisalov’s claim. There certainly isn’t evidence to back it up. What is undeniable, however, is that the United States did a terrible job of handling widespread rumors about Bakiyev and Manas. It was only in November 2010, seven months after Bakiyev was overthrown and eight years into the U.S. contracts with Mina and Red Star, that DLA-Energy (the branch of the Defense Department that handles fuel contracts for global military operations ), prompted by House oversight, inquired into the ownership of the two companies. “Before the investigation, we had no idea that they weren’t an Iranian front company,” a source on Capitol Hill with knowledge of the investigation told me. Moreover, there is an allegation in the report that, far from examining the companies, U.S. officials engaged with their leadership on matters outside fuel contract negotiations. In the report, Erkin Bekbolotov, a Kyrgyz national and partner in Mina, claims he was an “unofficial intermediary” between Maksim Bakiyev and DLA-Energy when Maksim’s father was considering closing Manas. Bekbolotov says U.S. defense officials told him to maintain “back-door channels.” (The report ultimately concludes, however, that “it is unknown what motivated [Maksim] to work with Mr. Bekbolotov. ”)
This was allowed to happen because U.S. Federal Acquisition Regulations do not require the government to scrutinize the ownership structures of companies bidding for contracts ; the only proviso is that they be “cross-checked against a federally maintained list of suspended or debarred contractors,” which Mina and Red Star weren’t on. What’s more, despite persistent complaints from Kyrgyz politicians about the secrecy of the fuel contracts at Manas, the House report says, “Senior DLA-Energy officials stated that the American Embassy never communicated any concerns to them regarding potential corruption.”
To be sure, Kyrgyzstan is a country in which rumors fly freely and often. Last summer’s riots targeting ethnic Uzbeks in the south were initially spurred by reports—later proven false—that Uzbeks had raided a dormitory and raped a dozen Kyrgyz women. Last April, a man in a Bishkek bar told me that the real purpose of the Manas base is to facilitate the U.S. military’s smuggling of weapons to various criminal elements in Central Asia. Moreover, the new government has much to gain from trying to prove Bakiyev’s wrongdoing; after all, it is still in a struggle to win support and maintain peace across the country.
Which is all to say that it’s quite possible the congressional report is accurate—that Bakiyev wasn’t profiting from Manas. Even if that is the case, however, there remain the intertwined issues of oversight and public perception. On these fronts, when it comes to Kyrgyzstan and Manas, the United States has most certainly failed. “You came to us to help us build democracy,” Roza Otunbayeva, a former opposition leader who now serves as Kyrgyzstan’s president, told The Washington Post last year. “And then just one day, you put your hands over your mouth just to have a base.”