Friday, June 18, 2010

U.S. Ties to Ex-Kyrgyz Regime Are Questioned

I sat through the typical PBS News Hour discussion of Kyrgyzstan and I knew I wasn't getting the full story. Too little mention, in fact none, was being given to the fact the the U.S. has an important fueling and transport base into Afganistan near Bishkek and had a complicated, yet better relationship with the ousted corrupt former regime of Kyrgyzstan then the new regime which has "hostility...towards the U.S. fuel dealings."

An excellent article, U.S. Ties to Ex-Kyrgyz Regime Are Questioned, in the Wall Street Journal brings important details to the table. For some of you out there, the appearance of the name Kroll Associates should ring a few 9/11 bells, as they also play a small role in the drama taking place. Below are portions of the article.

BISHKEK, Kyrgyzstan—Weeks before ethnic clashes killed hundreds of people in this Central Asian republic, an audio recording was posted on YouTube that presaged the mayhem.

"We need to find 500 b—ds…and keep [the country] in a constant mess," said a voice that government officials here say was that of Maksim Bakiyev, the 32-year-old son of the ousted president. "Somebody needs to kick up a fuss."

...The new leaders in Bishkek say the U.S. government, keen to maintain a crucial military base here used to funnel troops and supplies into nearby Afghanistan, pursued a dangerous policy of ignoring the regime's abuses right up to the moment it collapsed after a popular revolt.

Kyrgyzstan's new leaders charge that America's relationship with the Bakiyevs before they fled provided a patina of respectability to a brutal, corrupt government through high-level contacts and dubious fuel deals. Now, both the U.S. and Kyrgyz citizens are feeling the blowback

Roza Otunbayeva, head of Kyrgyzstan's new interim government, says the YouTube recording is authentic, and that the former regime "provoked and orchestrated" the ethnic violence that has left an estimated hundreds dead and sent tens of thousands fleeing into neighboring Uzbekistan....

Kyrgyz prosecutors want to try Maksim Bakiyev for abuse of office, misuse of government funds and money laundering, a prosecutor's spokesman said Tuesday.

While details of the charges are sketchy, one involves the younger Mr. Bakiyev's relationship with Asia Universal Bank, a Kyrgyz bank that was advised by U.S. consultants APCO Worldwide and Kroll Associates and whose board members included three former U.S. senators. Prosecutors allege that the younger Mr. Bakiyev steered to AUB part of a $300 million Russian state loan to Kyrgyzstan, and personally benefitted from it, the spokesman said.

Mr. Baisalov said U.S. business ties with Maksim Bakiyev were part of a larger pattern of the U.S. turning its back on human rights in the region, dialing back its criticism of authoritarian regimes so it could win their support for the war in Afghanistan...

The U.S. government responded with a "stunning silence" in the last year of the Bakiyev government's existence, as officials rigged elections, and shut down websites and newspapers as opposition figures were killed or arrested, he said. "We were shocked, dismayed by the silence and we felt betrayed."...

The new government has also accused the U.S. of enriching Maksim Bakiyev through fuel supply deals. It says a fuel-supply contractor, Mina Corp., a privately-owned company based in Gibraltar, had lucrative U.S. government contracts to supply fuel to the U.S. base. The government says Mina, which is operated by a former U.S. military attaché, used smaller delivery companies, that were allegedly controlled by Maksim Bakiyev, and funneled as much as $70 million a year to them.

The Kyrgyz government has produced no evidence of the alleged payoffs, saying the case is under investigation. Mina denies the accusation, and its operations manager, Chuck Squires, says he never even met the president's son.

But hostility in the new government towards the U.S. fuel dealings have led to supply disruptions at the base. Kyrgyzstan's acting president, Ms. Otunbayeva, said Kyrgyzstan will abolish an exemption on jet-fuel taxes that made the business especially profitable under Mr. Bakiyev. In an interview, Ms. Otunbayeva said she wants no more "corrupt schemes."

In Washington, the finger-pointing prompted the House Committee on Oversight and Government Reform to launch an investigation in April into allegations that Pentagon fuel contracts to supply fuel to the Manas Air Base "substantially enriched family members of President Kurmanbek Bakiyev."

Whether true or not, the "perception of corrupt" deals between the U.S. and the Bakiyev family has already undermined U.S. interests in the region, and may have helped topple the Kyrgyz government, said Scott Horton, a lecturer at Columbia Law School in New York and a trustee of the American University in Bishkek who testified at one of the Congressional hearings...

And getting back to the bank scandal involving Kroll....

In 2005 the Central Bank of Russia launched an investigation of AUB, and later issued a statement reviewed by the Wall Street Journal saying it suspected the bank of "suspicious operations" to help companies evade taxes. Mr. Sarbanov said that when he tried to help the Russian bank investigate, he was forced out of his job by President Bakiyev.

After Mr. Sarbanov's departure, AUB went into the retail banking business. Mr. Nadel, AUB's chairman, says this had nothing to do with any favors from the government, and that AUB had spent "several years" working to obtain the retail banking license and the Russian Central Bank investigation proved nothing against AUB.

The following year, the bank hired APCO Worldwide and Kroll as advisors. Kroll published a report in early 2007 saying the bank had a "solid foundation" to enact controls against money laundering. Former U.S. Senators Bob Dole (R., Kan.) and J. Bennett Johnston (D., La.) joined its board. Earlier this year, Mr. Dole resigned and his seat was filled by former Democratic Sen. Donald W. Riegle, Jr. from Michigan.

In April 2007, Mr. Dole and Mr. Johnston visited Bishkek on AUB's invitation. Mr. Dole also visited the U.S. air base, and had an audience with President Bakiyev.

Mr. Dole declined to comment for this article. Mr. Johnston denied ever meeting with Mr. Bakiyev "or any of his family or anyone who spoke for him."...

U.S. officials said Maksim Bakiyev's official status made it necessary to invite him to Washington in April, where he was to be a featured speaker at the Kyrgyz Opportunities Forum, hosted by the Commerce Department. The top State Department official for Central Asia, William O. Blake, was also to appear. But events in Kyrgyzstan forced an abrupt cancellation of the gala event...

Now take a look at the video mentioned at the top of the article below:

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