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Owner of Kyrgyzstan fuel depot speaks out

Could American officials be tried under the Foreign Corrupt Practices Act?

A KC-135 Stratotanker is seen through the razor wire fence as it takes off from Manas air base near Bishkek, Kyrgyzstan on Feb. 13, 2009. (Shamil Zhumatov/Reuters)

BISHKEK, Kyrgyzstan — Valery Hon owns what in local business jargon is described as a “tasty morsel.”

Hon is founder and chairman of the board of the VOSST company, located just outside of Bishkek, Kyrgyzstan’s capital. Among his holdings is one of the most sought-after pieces of real estate in Kyrgyzstan: a fuel storage facility located about half a mile from the country’s main international airport, Manas. 

Given the facility’s size and proximity to Manas, it is in a perfect position to supply fuel for civilian flights at the airport and for the major United States military base located on Manas’ territory.

Early last year, Hon says that he received a phone call from one Sergei Kim.

Local businessmen and Kyrgyz officials say that Kim is the right-hand man of Maksim Bakiyev, the much feared entrepreneur son of recently deposed President Kurmanbek Bakiyev.

Kim got straight to the point, says Hon: Maksim wanted Hon to sell his fuel storage facility to another company.

“He said that he was calling from Maksim — that was the first thing that he said,” said Hon.

This was in fact not the first time that the facility was a takeover target. In late 2003, Hon said, a collection of people linked to the Kyrgyz government, using the country’s tax police, attempted to seize his business. He was saved by the fact that Kyrgyzstan underwent a sudden change in government — the so-called “Tulip Revolution” — and most of those he accuses had to flee the country. Then in 2008, the same thing happened: High Kyrgyz officials tried to commandeer the same storage facility.

This second takeover attempt in 2008 and 2009 was more successful, however: Hon avoided selling his property outright, but companies closely linked to Omurbek Babanov, a former deputy prime minister, forced him to lease them the facility for five years while they paid a fraction of the cost for the fuel stored there.

“This wasn’t a hostile takeover, as it’s called,” Hon said recently in the VOSST offices overlooking the facility. “This was open theft — they grabbed my business and that was that.”

Hon’s story is a window into the hard-knuckled business methods and possible corruption that thrived during the President Bakiyev’s administration. Last month, Bakiyev was forced to flee the capital, and then ultimately the country, after throngs of protesters — outraged at the millions of dollars that Bakiyev and his family were said to have extracted from the Kyrgyz economy — overpowered riot police and stormed his presidential administration.

But the case of the VOSST fuel depot has much wider ramifications, potentially stretching all the way to the highest echelons of power in Washington, D.C. Hon believes that Maksim Bakiyev, 32, President Bakiyev’s younger son, was the driving force behind the facility’s seizure in an attempt to corner the highly lucrative sale of aviation fuel to the U.S. air base.

Were that story to prove true, it would be more than just an embarrassment for U.S. officials. America’s standing in this small but strategically located ex-Soviet nation could be deeply damaged, given that Washington would be viewed as helping enrich a widely detested regime, all for the sake of holding onto a key U.S. military installation.

American citizens and possibly officials would also be open to prosecution under the Foreign Corrupt Practices Act (FCPA), 1977 legislation that forbids U.S. businessmen from bribing foreign officials.

http://www.globalpost.com/dispatch/asia/100521/kyrgyzstan-manas-air-base-fuel-contracts