Controversial defense contractors Mina and Red Star reveal owners

By Andrew Higgins
Washington Post Staff Writer
Saturday, November 6, 2010; 1:01 AM

Amid rising anger in Kyrgyzstan over a new Pentagon jet fuel contract for a vital U.S. base in the Central Asian nation, a secretive business group at the center of the storm Friday lifted a veil of mystery surrounding its ownership.

The group, which comprises Gibraltar-registered Mina Corp. and Red Star Enterprises, has won Pentagon deals worth billions of dollars over the past eight years but only on Thursday - a day after announcing another contract with the group - did the Pentagon ask for, and then receive, details of who owns the operation.

The business, according to a Defense Logistics Agency official who requested anonymity, belongs to Delphine Le Dain, the French wife of Douglas Edelman - an elusive Californian businessman who used to run a bar and hamburger joint in Kyrgyzstan - and to Erkin Bekbolotov, his 35-year-old Kyrgyz partner.

Pentagon contracting regulations do not require that contractors reveal their ownership. Mina and Red Star nonetheless went to great lengths to conceal the ownership role of Edelman's wife - who has no known experience in jet fuel logistics - and Bekbolotov behind a web of offshore entities.

Revealing this data should help meet demands from the White House that the Pentagon shed more light on the controversial jet fuel deals, but it is unlikely to calm the fury in Kyrgyzstan, which demanded Friday that Washington stop dealings with Mina Corp. The company won a major new Pentagon contract Wednesday to supply jet fuel to a U.S. air base in the former Soviet republic. The award infuriated Kyrgyz officials, who want private contractors replaced by a Russian-Kyrgyz joint venture.

A statement issued by the Foreign Ministry in Bishkek, the Kyrgyz capital, said that Washington must "suspend cooperation" with Mina until the completion of an investigation by state prosecutors. It cited "corrupt schemes around fuel deliveries" to the U.S. base and demanded steps to "ensure transparency and remove suspicion."

A serious rupture between Washington and Bishkek could jeopardize the future of a U.S. base that is used to fly troops to and from Afghanistan and houses a fleet of aero-tankers that do in-flight refueling over the Afghan combat zone. The jet fuel controversy is fed in part by political jockeying in Bishkek following an election last month that boosted the clout of politicians hostile to Mina and Red Star.

Kyrgyz officials have repeatedly accused the companies of corrupt ties to the family of former president Kurmanbek Bakiyev, who was ousted in April. But they have provided no proof of wrongdoing and a six-month investigation by the House subcommittee on foreign affairs and national security has found no credible evidence of corruption.

The companies have denied wrongdoing and say they are the victims of misinformation spread by rivals.

But, U.S. officials say, their secrecy and the Pentagon's contracting rules have helped fan suspicion. Mina and Red Star spokesman John Lough declined to comment on why the firms had hidden their ownership so elaborately, but he said that they provided the data "immediately" when the Defense Logistics Agency asked for it Thursday. Mina's recently appointed chief executive Denis Grigoriev revealed the ownership details to DLA Friday morning. Lough had no comment on why Edelman's wife, a former journalist, would be co-owner of the business.

Mina and Red Star told congressional investigators of their ownership this summer, but only after elaborate negotiations over confidentiality. Edelman did not comply with a congressional subpoena. Bekbolotov, the co-owner, and the companies' director of operations, former U.S. military intelligence officer Chuck Squires, agreed to answer questions.

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