In a fascinating article by Staff Writer, Andrew Higgins, the Washington Post published an article on November 1 which chronicles the background of an unusual $3 billion fuel contract awarded by the US Department of Defense (“DoD”) to companies whose ownership is apparently not well known to the government. The article, entitled “Kyrgyz contracts fly under the radar.”
According to the article, “Congressional investigators have spent six months digging into single-source Pentagon contracts, the possibly illegal diversion of Russian fuel and Kyrgyz claims of backroom deals, which have soured ties with a crucial U.S. ally. The below-the-radar rise of Mina Corp. and Red Star Enterprises – whose ownership, operations and even office locations are shrouded in secrecy – shows how nearly a decade of war has not only boosted the bottom line of corporate behemoths but also enriched unknown upstarts. In just eight years, Mina and Red Star – both registered in Gibraltar and run by the same people – have come from nowhere to become a key link in the U.S. military’s supply chain. They have beaten out established rivals to supply nearly a billion gallons of jet fuel to a U.S. Air Force base here in Kyrgyzstan, a vital staging post for the Afghan conflict, and also to American warplanes at Bagram air base in Afghanistan.”
“The companies themselves, however, are largely invisible. In dealings with the Pentagon, they have used addresses in Toronto, London and Gibraltar, each apparently little more than a mail drop. Edelman, the former bar owner, who now lives in London, is so elusive that even congressional investigators probing the jet fuel deals have not managed to talk to him. He did not comply with a July subpoena from the House Subcommittee on National Security and Foreign Affairs, according to people close to the probe.”
At issue is not the contract per se nor the fact that the owners are apparently unknown to Congressional investigators (let alone the American taxpayer who funds these contracts), but the arrogance demonstrated by the Defense Department in defending contracts without due diligence and/or competitive bidding.
“The Pentagon and State Department ignored widespread Kyrgyz public perceptions of contract corruption engendered by a fundamental lack of transparency,” said Rep. John Tierney, D-Mass., chairman of the subcommittee that conducted the probe. “Supplying vast quantities of fuel is an extremely sensitive endeavor with significant political, diplomatic and geopolitical ramifications. It is not merely a logistics matter.”
The White House, alarmed by the unintended consequences of the fuel deals, is pushing for greater transparency, said a senior administration official. “There has been a giant fight with [U.S. Central Command] over this,” said the official, who asked not to be named because of the sensitivity of the matter.
Readers of SFTT are all too familiar with the underhanded contract awards and veil of secrecy that surrounds our military procurement process. It seem like every other month, the Government Accountability Office (“GAO”) is launching an investigation into some facet of our procurement process. Despite strong evidence to the contrary, the military continues to insist that our troops have the best equipment possible. When will our military leadership apply the same standards of discipline and integrity that they demand of our frontline troops and begin to overhaul the military procurement system? It is a cancer that undermines the credibility of our military leadership.
It is simply a question of TRUST! Our troops and our taxpayers deserve more from our military leadership.
See just a sample of related SFTT articles on our broken procurement process:
If you share our concern, TAKE ACTION now and become a Member of SFTT!