FRIDAY, DECEMBER 3, 2010
KLMNO
EZ RE
The World A13 U.S. will give share of fuel contract to Kyrgyzstan, Clinton says
for Russian supplier BY GLENN KESSLER
Deal expected to be lucrative
AND ANDREW HIGGINS
bishkek, kyrgyzstan—The United States will agree to a demand by Kyrgyz officials that their impoverished country be given a share of lucrative fuel contracts for a critical transit hub here for troops headed to Afghan- istan, Secretary of State Hillary Rodham Clinton said Thursday. Clinton’s
announcement,
made during a five-hour visit to the fragile Central Asian democ- racy, appeared designed to as- suage growing anger over Penta- gon contracts that have been worth about $3 billion over eight years toMina Corp. and Red Star Enterprises, a secretive business group registered in Gibraltar. The new arrangement should
also please Russia, which is ex- pected to play a big—and profit- able—role. Gazpromneft, part of Russia’s state-controlled energy giant Gazprom, will probably supply much of the jet fuel. Moscow has frequently used Gazprom to further its political and strategic goals, but the Obama administration is gam- bling that its efforts to “reset” relations with Russia — and the prospect of large profits for Gaz- prom — will help ensure that jet fuel keeps flowing to the U.S. air base in Kyrgyzstan, known as the Manas Transit Center. Every soldier headed to or
from Afghanistan passes through the base, which also houses a fleet of American air tankers that refu- el U.S. warplanes in flight over the combat zone. TheManas base has helped the
Pentagonavoid dangerous supply routes through Pakistan. But it has also given rise to bitter feud- ing over who should profit from its jet-fuel needs. Tensions rose sharply last month when the Pentagon awarded a new con- tract to Mina, despite calls by Kyrgyzstan thatWashington stop dealing with the company. The Kyrgyz Foreign Ministry de- manded that the contract be sus- pended pending the result of a government corruption probe. Standing next to Kyrgyz Presi-
dent Roza Otunbayeva at a news conference, Clinton said the two had “discussed” the issue “at some length.” The United States would help the government “es- tablish a Kyrgyz entity that can take over part of the base con- tract,” she said, adding that the State Department “would work closely with the Department of Defense to expedite the process” of creating a company that would meet U.S. legal requirements. Later, at a televised town hall
meeting with students, Clinton said the new company would provide “a significant part of the fuel” for the base. U.S. officials said the Kyrgyz share of the fuel contracts could be as high as 50 percent, if a supplier can be found.
The deal In a September interview with
The Washington Post, Otun- bayeva said she envisioned a joint venture with Russia’s Gazprom- neft. She estimated that Kyrgyz- stan would collect $50 million a year by cutting out the middle- men. The Russian company used to
sell fuel indirectly to the U.S. air base in Kyrgyzstan by supplying Mina and Red Star, which acted as intermediaries. But it abruptly halted deliveries early this sum- mer. The move suggested an at- tempt byMoscow to squeeze sup- plies and pressureWashington to give a bigger and more direct slice of the business to Gazprom. The deal that Clinton an- nounced Thursday has been in the offing since late September, when the Pentagon, under pres- sure about its reliance on the group comprising Mina and Red Star, revised the terms of the jet fuel contract for the U.S. base in Kyrgyzstan. John Lough, a spokesman for
the group, said the new contract won byMina includes a provision allowing the Pentagon to intro- duce an additional supplier for Manas. “Mina is ready to assist the U.S. government in making this happen,” he said. But he added that the Defense Depart- ment will need to make sure that any newcomer “has a reliable fuel supply chain and appropriate fi- nancial capabilities, and can op- erate in a transparent and ethical way.”
Congress has been investigat-
ing Mina and Red Star for more than six months and is set to release a final report soon. Otun- bayeva, who has accused the firm of corruption but provided no evidence, said Thursday that a separate probe by her govern-
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ment has not been completed, adding, “We will make it public.” Clinton said the United States would “review the results of any investigation.” Representatives of the compa-
nies have long denied wrongdo- ing, and no proof of any has yet emerged.
‘Madame President’ Last month, after a Pentagon
request, the companies revealed they were owned by Delphine Le
Dain, the French wife of Douglas Edelman—a California business- man who used to run a bar and hamburger joint in Kyrgyzstan— and by Erkin Bekbolotov, his 35-year-old Kyrgyz partner. The companies had operated behind a web of offshore entities and had gone to great lengths to conceal their true ownership. The controversy over the base
contracts has been a growing irritant in an increasingly impor- tant relationship. Predominantly
Muslim Kyrgyzstan last month became the first Central Asian country to hold parliamentary elections judged free and fair by observers. Earlier this year, the president was ousted, and ethnic violence in the country’s south in June left 400 dead. Clinton sandwiched her visit
here between stops in two auto- cratic Central Asian neighbors — Kazakhstan andUzbekistan—on a long day scheduled to take her from the snowy streets of Astana
to balmy Bahrain, where she was to attend a conference. While here, Clinton lauded
Kyrgyzstan for taking the initial steps toward democracy, saying the people were “pioneers” among the former Soviet repub- lics in the region. “Parliamentary democracy can help ease tensions between different regions and different groups of people,” she said at the town hall meeting. “ ‘Compromise’ is not a dirty word in a democracy,” she said.
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Clinton and Otunbayeva, the
first female president in the re- gion, appeared to form a bond, with Clinton extending her visit at the presidential building for a cup of tea. “I loved calling your president
‘Madame President’ today,” the unsuccessful presidential aspi- rant told the students.
kesslerg@washpost.com
higginsandrew@washpost.com Higgins reported from Hong Kong.
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