Research support for this article was provided by the Investigative Fund at The Nation Institute.
In Napoleon Bonaparte’s day an army may have marched on its belly, as the French emperor famously quipped, but the modern-day American military campaign in Afghanistan needs not just food but also fuel. Diesel for the MRAPs and Humvees, aviation fuel for the planes and helicopters–that’s the fodder for the military surge under way in Afghanistan. Fuel is precious there–they call it liquid gold–and the effort to keep it flowing has created an array of bizarre monopolies, strange alliances and allegations of corruption entangling the US government.
This is the story of two interlinked and secretive offshore companies run by a former Army intelligence officer. The firms run a specialized monopoly of massive proportions. Their niche: supplying aviation fuel for US military operations in Afghanistan–enough to fill two Olympic-size swimming pools each and every day of the year.
The companies’ names are Red Star Enterprises and Mina Corp. In Afghanistan, Red Star Enterprises has a sole source contract worth more than $1 billion, won without competition, to deliver fuel to Bagram Air Base, that central hub of the war effort. The Nation has obtained an unusual "memorandum of agreement" between Red Star and the US military authorities, giving the firm exclusive ownership of a fuel pipeline that feeds directly into the base.
Similarly, in nearby Kyrgyzstan, a staging ground for the Afghan war, Mina has another sole source contract, awarded without any announcement, to provide fuel to a huge and controversial base. The contract has been at the center of corruption and kickback allegations, and the companies have been accused of enriching the families of two successive heads of state, both of whom presided over kleptocratic and repressive regimes–an arrangement that fostered great resentment in the country. Violence exploded on the streets in early April, leaving eighty protesters dead, and President Kurmanbek Bakiyev was forced to flee. The new, provisional government sees Red Star and Mina in a very specific light. The chief of staff, Edil Baisalov, tells The Nation that the firms have served as "an indirect way for the Pentagon to bribe the ruling families of Kyrgyzstan." (These allegations are the subject of a Congressional hearing tomorrow, convened by the House Subcommittee on National Security and Foreign Affairs.)
Baisalov’s charge is a serious one but not new, nor as outlandish as it may seem, although the companies deny it. The eight-year saga of high-stakes contracts and secretive deals raises serious questions about how the Afghan campaign has been run, not only by the Bush administration but also under President Barack Obama. Sole source contracts have continued under the current administration, and if the Kyrgyz authorities are correct, the Pentagon contractors are still doing what they did under Bush. After all, the thirst for oil and fuel can only grow as President Obama’s Afghan surge ramps up.