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House Panel Probing Kyrgyz Deals, Possible FCPA Violations
Posted By Christopher M. Matthews On July 22, 2010 @ 1:21 pm In Central Asia | No Comments
A House panel investigating corruption allegations involving fuel contracts at the major U.S. air base in Kyrgyzstan appears to have finally obtained the cooperation of two companies at the center of the probe, Jeff Stein reported  in his SpyTalk column Wednesday.
After weeks of negotiations, the two companies, Red Star Enterprises and Mina Corp. Ltd, have promised to cooperate with the probe, which is said to be examining why the companies have not been investigated under the Foreign Corrupt Practices Act, Stein’s story said.
The companies were awarded sole-source, classified, $1.4 billion contracts from the U.S. Department of Defense to supply fuel to Manas Air Base in 2002. After the corruption -lagued Kyrgyz regime was violently forced from office earlier this year — the second such regime change in five years — the House Oversight Subcommittee on National Security and Foreign Affairs, chaired by Rep. John Tierney (D-Mass.), began a probe of the contracts in April.
“Two overthrows of the government there have been linked to corrupt dealings at Manas Air Base,” Tierney said last month. “That’s what we’re looking into.”
The investigation centers on Douglas Edelman, a Californian who has operated in Moscow and Central Asia, and Erkin Bekbolotov, a Kyrgyz national, who are partners in Red Star and Mina Corp. Reports have suggested that kickbacks were paid to ruling officials in Kyrgyzstan in connection with the contracts, the story said. Chuck Squires, a former U.S. Army attaché at the American embassy in Bishkek, Kyrgyzstan, who manages company operations at Manas, is also a person of interest.
According to the article, the committee is examining whether Defense Department officials were aware of, or tacitly approved of, alleged illicit payments to the Kyrgyz ruling families, which were backed by the U.S. government.
The companies have been served with subpoenas and investigators are “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 story said.
In response to the subpoenas, the companies, which are extraordinarily secretive, have begun to provide documents and individuals for deposition. The Defense Department closed its bidding window this week on a new supply contract to Manas, which is a critically important staging area for the war in Afghanistan.
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