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Kyrgyz leader seeks to bar U.S. contractors from supplying fuel to American base

By Andrew Higgins and Glenn Kessler
Washington Post Staff Writers
Tuesday, September 21, 2010; 8:02 PM

NEW YORK - In a move that could complicate Washington's war effort in Afghanistan, the Central Asian nation of Kyrgyzstan wants to bar Pentagon contractors from supplying jet fuel to an American air base that is critical to the Afghan campaign.

In an interview, Kyrgyz President Roza Otunbayeva said private companies handling supplies should be replaced by a joint venture between a Kyrgyz state company and Russia's state-controlled Gazpromneft, a major source of jet fuel in the region.

Such an arrangement, said Otunbayeva, would reduce corruption, increase transparency and end "the absolutely dark corner" of Pentagon contracts. She estimated that her country would collect an estimated $50 million a year by cutting out middlemen.

But the plan would provide Moscow with direct leverage over an American base outside the Kyrgyz capital, Bishkek, that serves as a vital logistics hub for U.S. military operations in Afghanistan.

Moscow has long been wary of America's military presence in Kyrgyzstan, a former Soviet republic that Russia considers to be in its sphere of influence. Russia has frequently used Gazprom, the parent company of Gazpromneft, as an instrument of political and diplomatic pressure.

Otunbayeva, however, said she had discussed the U.S. air base, known as the Manas Transit Center, with Russian President Dmitri Medvedev and was under no pressure to push out the Americans, who pay an annual rent of $60 million to the Kyrgyz government. Putting fuel supplies in the hands of a Kyrgyz-Russian joint venture, she added, would boost trust between Moscow and Washington and serve President Obama's policy of seeking a "reset" in relations with Russia.

"We want to make absolutely clear and sure that there will be no middle people in between but a straight supply to American planes," said Otunbayeva, who is visiting New York to attend to the U.N. General Assembly.

The Pentagon has relied since 2003 on two Gibraltar-registered companies for the supply of jet fuel to Manas and also to Bagram air base in Afghanistan. The two companies - Mina Corp. and Red Star Enterprises - are closely affiliated and have together been awarded Pentagon contracts worth more than $2 billion. Their ownership has not been made public, but they are believed to be largely controlled by Douglas Edelman, an American. Managers include several former U.S. military officers.

Mina Corp. and Red Star have won plaudits from the Pentagon for providing reliable fuel deliveries but have also been dogged by controversy, including allegations that they worked with corrupt relatives of two of Kyrgyzstan's former presidents.

The last government was toppled in April following a revolution fueled in part by public anger over rampant corruption.

A congressional investigation is now looking into the allegations against Red Star and Mina Corp. Senior American officials who visited Kyrgyzstan after the April revolution got berated by the new government for allegedly turning a blind eye to corruption, particularly in relation to fuel contracts.

John Lough, a spokesman for Mina and Red Star, said the companies have been "cooperating fully" with the congressional probe and believe that it "will confirm their integrity." He described allegations of corruption by the companies as "reckless and false" and said "crony companies" close to the new Kyrgyz government are maneuvering to take over the jet fuel contracts. "This is particularly disturbing given the international community's high hopes for the interim government" of Otunbayeva, he said.

The Pentagon, ignoring Kyrgyz hostility toward private contractors, this summer opened bidding for a new jet fuel supply contract for Manas. Mina Corp. is among those bidding.

Otunbayeva, who will meet with Obama on Friday, said she would be "very unhappy" if the Defense Department presses ahead with the process and awards a new contract.

In a statement, the Pentagon said that it was "open to exploring" the idea of supplying fuel through a state-owned enterprise. "The U.S. priority is to ensure a secure, reliable and uninterrupted supply of fuel to the Transit Center," the statement said.

The Manas Transit Center has played a critical role in President Obama's Afghan surge, with tens of thousands of American troops passing through the U.S. base in Kyrgyzstan as they enter and exit Afghanistan. The base also houses a fleet of air-tankers that are used for in-flight refueling of American warplanes over Afghanistan.

Unlike her predecessor, Kurmanbek Bakiyev, who tried to close the U.S. base under pressure from Moscow, President Otunbayeva said she would let a base lease agreement with Washington stand.

She said that far from demanding that American troops leave Kyrgyzstan, President Medvedev of Russia had "even sort of expressed his satisfaction that America takes a lot of responsibility over the Afghan problem." Russia also has a military base in Kyrgyzstan, along with several other security-related facilities.

But opposition to the Manas Transit Center will probably increase after elections for a new Kyrgyz parliament in October. The poll is expected to strengthen forces who want to revisit the base accord.

Otunbayeva's own ability to influence events has grown steadily weaker following a series of grave crises, most notably a spasm of ethnic violence in the south of the country.

Asked to name the most difficult time of her brief tenure as president, Otunbayeva said: "All the time is difficult. Nobody would envy me my role."

higginsandrew@washpost.com kesslerg@washpost.com

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