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Regime security, base politics and rent-
seeking: the local and global political
economies of the American air base in
Kyrgyzstan, 2001–2010
Kemel Toktomusheva
a Department of Politics, University of Exeter, UK
Published online: 13 Feb 2015.
To cite this article: Kemel Toktomushev (2015) Regime security, base politics and rent-seeking:
the local and global political economies of the American air base in Kyrgyzstan, 2001–2010, Central
Asian Survey, 34:1, 57-77, DOI: 10.1080/02634937.2015.1008796
To link to this article: http://dx.doi.org/10.1080/02634937.2015.1008796
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Regime security, base politics and rent-seeking: the local and global
political economies of the American air base in Kyrgyzstan, 2001–2010
Kemel Toktomushev*
Department of Politics, University of Exeter, UK
Unlike the eponymous hero of the Kyrgyz epic, Manas, who united the Kyrgyz people, the
American air base situated at Kyrgyzstan’s Manas International Airport became a source of
fracture in Kyrgyz politics after its establishment in late 2001 to support the US-led war in
Afghanistan. Whilst international attention focuses on the geopolitics of a so-called New
Great Game over basing rights in Central Asia, a more significant political and economic
struggle concerning the Manas Air Base is related to its fuel supplies. The air base became a
source of rent for the ruling elites and an object of controversy between the government and
opposition in two successful uprisings, which removed presidents Askar Akayev and
Kurmanbek Bakiyev from power (in 2005 and 2010, respectively). The air base’s secret fuel
contractors, with their unknown beneficiaries, offshore registration and low visibility, built
close links to the regimes of the two ousted presidents. The lucrative and illicit contracts
and subcontracts were purportedly used by both presidents and their entourages for personal
enrichment and to strengthen their regimes but were ultimately a factor in their downfall.
Drawing on the results of recent congressional and non-governmental investigations and
interviews with representatives of the fuel-supply companies and members of the former
regime, this work assesses the role of the US Manas Air Base in regime security and rent-
seeking schemes during the Akayev and Bakiyev tenures. Thus, this article will contribute
to the growing literature on rent-seeking in Eurasia’s hybrid regimes and the external
dimensions of regime security.
Keywords: Kyrgyzstan; base politics; Manas Air Base; rent-seeking
Introduction
The experience of the American Manas Air Base in Kyrgyzstan serves as an excellent empirical
example to examine the sources of Kyrgyz foreign policy and to test the validity of the Great
Power narratives vis-à-vis the rent-seeking variable. The developments around Manas since its
establishment in 2001 show that base politics in Central Asia extends beyond traditional inter-
national relations amongst states to connect local to global politics through offshore havens
and supposedly legitimate financial mechanisms. The Manas Air Base became a source of rent
for the ruling elites and an object of controversy between the government and the opposition
in two successful uprisings, which toppled presidents Askar Akayev and Kurmanbek Bakiyev.
This work will demonstrate how Akayev and Bakiyev and their entourages exploited shell com-
panies and global financial mechanisms for their own benefit, merging the country’s economy
with clandestine and informal offshore worlds. Special attention will be given to the rise of
new Pentagon vendors –the mysterious Red Star and Mina Corp. –and to their no less mysterious
owners, Erkin Bekbolotov and Douglas Edelman. The article will examine the kinds of relation-
ships that these companies established with local elites and particularly with the powerful sons of
© 2015 Southseries Inc
*Email: kemel@alumni.lse.ac.uk
Central Asian Survey, 2015
Vol. 34, No. 1, 57–77, http://dx.doi.org/10.1080/02634937.2015.1008796
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the presidents and how, as a result, Kyrgyz foreign policy decisions pertinent to the Manas Air
Base have rarely gone beyond the commercial preferences of the ruling elites.
Thus, this work will trace a link between the Kyrgyz leadership and the centre of political
power in Kyrgyzstan through the offshore and transnational connections of the American
vendors with locally registered fuel subcontractors. This is a constellation, which demonstrates
that political power is not contained solely within national units but flows from financial and
economic connections from the transnational through the national to the local. Whilst unveiling
complex fuel arrangements between the American vendors and local subcontractors, this section
will demonstrate that the geopolitical New Great Game is a seductive, but misleading concept. In
particular, it will be revealed that the Russian calls for the eviction of Manas were political rheto-
ric, as the complex fuel web had involved senior Kyrgyz officials, Russian Gazprom-owned refi-
neries, the American Defense Logistics Agency Energy (DLA Energy) and Gibraltar-registered
companies.
Drawing on the results of recent congressional and non-governmental investigations, as well
as interviews with representatives of the fuel-supply companies and members of the former state
regimes, this work will assess the role of the Manas Air Base in the context of regime security and
rent-seeking schemes during the tenures of Akayev and Bakiyev. Weak states like Kyrgyzstan
pose a formidable challenge to the Westphalian view of security and international order. Security
in the context of weak states does not simply refer to external orientations or military capacities
but implies a wide range of preconditions vital for the existence of the state and which have
already been realized in developed countries. Weak states lack a strong physical base, effective
public institutions, a monopoly on the instruments of violence and a consensus on the idea of
the state, and thus are distinguished by the nature of their insecurities (Buzan 1991). Often charac-
terized by corrupt, autocratic, family- and clan-based governance, the ruling elites in weak states
struggle to escape the insecurity dilemma posed by internal and external weaknesses of the state
and employ a variety of strategies to maintain the security of their regimes at the expense of long-
term state development (Migdal 1988; Mohamedou 1996; Jackson 2010). As a result, regime
security often dominates the security agenda of the state and serves as the key rationale behind
state policy making. The pivotal questions become: Who is in power, and what are their interests?
This article will contribute to the growing literature on rent-seeking in transitional states and the
external dimensions of regime security. Crystallized by clan and family bonds, rent-seeking in Kyr-
gyzstan has morphed into a symbiotic phenomenon, parasitic upon the state. The Kyrgyz ruling
elites tended to prioritize their own security and thus shaped the foreign policies of the country
in accordance with their own priorities and rent-seeking interests. In this respect, this article has
several implications. First, it presents a substantive case study, which addresses Kyrgyz domestic
politics both as a primary and a theoretical matter. It seeks to resolve the puzzle of whether rent-
seeking can complement or replace the New Great Game narratives. Second, Kyrgyzstan is used
as an empirical lens through which to explore how a developing region connects to the global
economy via hidden and informal financial vehicles and offshore enterprises. Third, this research
has strong normative aspirations. The findings of this work point to a variety of normative issues
and underscore the need for the re-assessment of current thinking about state weakness, organized
crime and corruption within the discourse of global governance.
Manas Air Base: from famous to infamous
The Manas Air Base was an American military installation, 20 km from Bishkek, the capital of
Kyrgyzstan. The base was opened on 16 December 2001 at the civilian Manas International
Airport under the status of forces agreements as part of the American-led Operation Enduring
Freedom (Transit Center at Manas n.d.).
1
Initially, the 786th Security Forces Squadron of the
58 K. Toktomushev
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86th Contingency Response Group (from the Ramstein Air Base in Germany) was deployed to
Bishkek to ensure the security of coalition forces that were installing the new base (Global Secur-
ity n.d.). Thereafter, the base hosted troops from several International Security Assistance Force
(ISAF) countries; however, its primary operating unit remained the American 376th Air Expedi-
tionary Wing (Transit Center at Manas n.d.). In the summer of 2009, the status of the Manas Air
Base was renegotiated; it was renamed the Transit Center at Manas International Airport, purport-
edly transforming the military nature of the installation.
2
The Manas Air Base represented a key logistic hub in the region and served as a focal point in
the US-led war in Afghanistan. The ISAF command was responsible for ensuring a stable flow of
supplies to one of the most hostile and remote parts of the world, where nearly 100,000 ISAF
troops were stationed (United States House of Representatives 2010). As a result, the Transit
Center at Manas became one of the busiest American Air Force installations in the world (Viss
n.d.). Every American soldier entering or leaving the Afghan battlefield had to go through the
Transit Center at Manas –a transit average of 1200–3500 coalition troops per day (USHR
2010; Wasson 2010). In addition, between 6 million and 13 million pounds of cargo went
through the Transit Center each month (USHR 2010; Wasson 2010). The rates of fuel consump-
tion for the Afghan war were higher than in any previous war fought by the Americans (Deloitte
2009; USHR 2010). Nearly 30% of this fuel came from the KC-135 Stratotankers stationed at the
Manas Transit Center (Wasson 2010).
3
Nonetheless, the air base was rather infamous among the locals. Unlike the eponymous hero
of the Kyrgyz epic, Manas, who united the Kyrgyz people, the American air base situated at
Manas International Airport became a source of dissent throughout Kyrgyz politics after its estab-
lishment in late 2001. On 6 December 2006, American soldier Zachary Hatfield shot Kyrgyz
citizen Alexander Ivanov dead at a checkpoint at the base. US officials stated that Ivanov, a
42-year-old truck driver on a routine mission of delivering fuel to the base, had threatened a
US serviceman with a knife, and was shot twice as a result (Pannier 2007). However, the state-
ments of the US spokesmen and Hatfield himself were unconvincing, while the evidence of a
knife found 20 metres from the scene of the shooting simply called for further investigation of
the event (Marat 2007;Baza 2009; Horton 2009). Although the Prosecutor General’sOffice of
Kyrgyzstan demanded the full prosecution of the US soldier for homicide, the American side
denied them access to Hatfield and transferred him out of the country, referring to the Status of
Forces Agreement, the intergovernmental agreement guaranteeing immunity to US servicemen
at bases outside the USA (Pannier 2007).
The inability of the Kyrgyz government to put the American soldier on trial for Ivanov’s
murder caused outrage in Kyrgyzstan and was widely covered by both Kyrgyz and Russian
media. The official initial American compensation to Ivanov’s family totalled USD 1000, com-
pared to the reparation of USD 50,000 provided by Ivanov’s company; although the payment
was intended as a goodwill gesture, the difference in these figures was perceived as humiliating
and insulting by Ivanov’s wife and by the majority of Kyrgyz citizens (Baza 2009).
4
WikiLeaks
cables dated July 2009 and purportedly issued to the US Embassy in Bishkek by the secretary of
state reveal that the convening authority, general Arthur Lichte, dismissed the charges against
20-year-old Zachary Hatfield and closed the case without requiring him to explain his rationale
(Wikileaks 2009d).
This information, which was circulated in the media, further reignited public anger towards
the status and necessity of American troops on Kyrgyz soil. The base had always been under
public scrutiny, and prior to this particular incident several complaints had been raised about
the American base. Some of the objections related to the collision of an American Stratotanker
with the presidential airliner, the practice of dumping surplus jet fuel over Kyrgyz territory,
and the presence of armed US military patrols in villages near the base. More serious accusations
Central Asian Survey 59
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were linked to drug smuggling and illegal wiretapping.
5
In addition, the presence of the American
base on Kyrgyz territory fostered debates among the local population about whether Kyrgyzstan
would become a target for radical extremists, especially in light of possible American military
actions against Iran.
Nevertheless, the greatest criticism of the Manas Air Base was directed at the base’s secretive
fuel contractors, with their unknown beneficiaries, offshore registration, opaque operation and
close links to those in power. The lucrative and illicit contracts and subcontracts were purportedly
used by both the first president of Kyrgyzstan, Akayev, and the second, Bakiyev, and their
entourages for personal enrichment and to strengthen their regimes. This phenomenon explains
why the ruling elites were rather reluctant to question the presence of the air base on the territory
of the republic despite growing dissent throughout society regarding the base. As for the men-
tioned complaints, the ruling governments often exploited those grievances as a pretext for rene-
gotiating the financial arrangements for their own benefit. As a result, the air base became a source
of rent for the ruling elites and an object of controversy between the government and the opposi-
tion in two successful uprisings, which removed presidents Akayev and Bakiyev from power.
Manas International Services and Aalam Services Ltd
Rent-seeking emerges when a new source of assets is captured by a ruling regime. Basing pay-
ments are one source of such rents (McGlinchey 2011; Cooley 2012). After the terrorist
attacks of 9/11, Kyrgyzstan suddenly reappeared on Washington’s radar as the Pentagon was
searching for footholds for Operation Enduring Freedom. For the USA, Kyrgyzstan emerged
as a convenient location, not far from the operational zone and with a functional airport, with
a 14,000-foot runway initially designed for Soviet bombers (Daly n.d.). For Kyrgyzstan, the
events of 9/11 provided a unique opportunity to host an American air base, with consequent finan-
cial benefits, and the government of Akayev seized this moment. As Borubek Ashirov has stated,
the decision to host an American air base turned out to be both governmental conjuncture and an
intersection of private interests, and not part of the republic’s clear foreign policy position.
6
Some policy makers believe that this decision was driven by the willingness of the Kyrgyz
government to contribute to international efforts to fight terrorism and ensure stability in the
region.
7
The government of Akayev had discussed this issue with all members of the Collective
Security Treaty Organization and, having received verbal approval, agreed to host an American
military installation on Kyrgyz territory.
8
Nonetheless, by the end of 2001 Akayev was facing a
crisis of legitimacy and had been widely criticized for corruption, nepotism, persecution of the
opposition, usurpation of power and a crackdown on free speech. In 1998, the Constitutional
Court of the Kyrgyz Republic had allowed Akayev to run for the presidency for a third term,
and on 29 October 2000, Akayev was re-elected as the president of Kyrgyzstan for the next
five years. Felix Kulov, Akayev’s key opponent in the presidential race, was removed from the
ballot and in 2001 was sentenced to 7 years’imprisonment and confiscation of property on
charges of abuse of power. Consequently, the decision of the Kyrgyz leadership to host the Amer-
ican air base should be analysed through the prism of Akayev’s regime and its survival. The base
could have served as a source of external legitimacy for the unpopular Akayev, since his domestic
sources of legitimacy were lacking. In fact, the presence of the American contingent, along with
troops from the ISAF states, demonstrated that Kyrgyzstan or Akayev’s regime per se was an
accepted and respected member of the international community. Accordingly, the Kyrgyz Parlia-
ment quickly ratified this decision, with President Akayev personally visiting the Parliament to
observe the voting. Washington was granted a right to build its military foothold at the civilian
airport near Bishkek for the annual rent of USD 2 million plus USD 4000 per flight (Kudrina
2007).
60 K. Toktomushev
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At first glance, the set fees appear unreasonably low. However, the official agreement between
Akayev and the Pentagon concealed the real agreement between the two parties. Lucrative and
illicit fuel contracts and subcontracts were the real remuneration to Akayev for his services, in
addition to the possible political benefits. The American side found the fuel suppliers to the air
base just as quickly as their Kyrgyz counterparts ratified an agreement to host the base. DLA
Energy, the US Department of Defense (DoD) agency for fuel solutions, chose a Maryland-
based logistics firm, AvCard, to supply fuel to Manas (USHR 2010). DLA Energy awarded
AvCard two contracts and one extension, without any tenders, for the period from December
2001 to February 2003, for the total amount of USD 56,559,743 (USHR 2010). Kathryn Fantasia,
the executive director of DLA Energy and at that time the DLA Energy contracting officer, stated
that AvCard was selected for its promise to meet the needs of the military (Cloud 2005). However,
it is still unclear why this particular company was chosen as the main fuel supplier to the air base
and what the company’s previous fuel supply history was. It may be inferred, nonetheless, that the
capitalization of the company was relatively small, as it was sold on 8 November 2007 to Miami-
based World Fuel Services Corporation for approximately USD 55 million, which is close to what
AvCard had received for the supply of fuel to Manas from DLA Energy (Bloomberg 2007;
Mukhopadhyay 2007; InsideView n.d.).
Rent-seeking by state actors is often formally guaranteed and legal, rather than informal and
illicit. The first AvCard contract, to supply 15 million gallons of jet fuel to Manas, was announced
on 30 November 2001, prior to the official statement from the Kyrgyz government permitting the
air base on its territory (USHR 2010). Aidar Akayev, the son of the Kyrgyz president and a gradu-
ate of the University of Maryland, became one of the partners of Maryland-based AvCard. His
company, Manas International Services (MIS), was chosen as one of AvCard’s two fuel subcon-
tractors. The second subcontractor was Aalam Services Ltd, which was owned by Adil Toigon-
bayev, the president’s son-in-law and a citizen of Kazakhstan. These two companies were
responsible for all fuel delivery to Manas Air Base, despite AvCard’s not even delegating a
single full-time employee to Kyrgyzstan (Cloud 2005). MIS was initially founded by Aleksander
Nastayev, a former Kyrgyz first class pilot and captain, who served as the CEO of the company for
some time.
9
Allegedly, shortly after its establishment, MIS was raided and expropriated by Aidar
Akayev.
10
As for Aalam, the company was part of Toigonbayev’s holdings. In summer 1999,
Joint Stock Company (JSC) Manas International Airport, a reorganized version of JSC National
Airlines (Kyrgyzstan Aba Joldoru), illegally transferred the refuelling complex of the Manas
airport to JSC Aalam Services Ltd (Kuzmin 2005). This transfer was presented as a 30% contri-
bution by Manas International Airport to the charter capital of JSC Aalam, with the entire refuel-
ling complex valued at only USD 510,000 (Kuzmin 2005). The remaining 70% share, or USD
1,190,000, which was never transferred, became the liability of an offshore company, Merleyside
LLC, registered in Delaware (Kuzmin 2005; Sotnik 2013). The Prosecutor General’sOffice of
Kyrgyzstan confirmed that both Aalam and Merleyside belonged to Adil Toigonbayev
(Kuzmin 2005).
The provision of rent-seeking opportunities to the regime members of allied governments
appeared to be an effect of the American government’s contracting procedures. The AvCard
executives have not disclosed how much they transferred to MIS or Aalam for the fuel, but
have confirmed that the company was aware of the links between the subcontractors and
the family of Akayev (Cloud 2005). Linda Kropp, the president of AvCard, claimed that she
learned about those ties soon after the fuel procurement and reported it to the officials responsible
at the Defense Energy Support Center (Cloud 2005). As it turned out, DLA Energy also knew
about the beneficiaries of the Kyrgyz fuel subcontractors. Kathryn Fantasia emphasized that the
DoD contracting and procurement laws permitted companies affiliated with foreign leaders and
their entourages to bid for and win DoD tenders (Cullison, Toktogulov, and Dreazen 2010).
Central Asian Survey 61
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Lieutenant Colonel Joe Carpenter of the Pentagon stated that the fuel procurement had been
conducted in accordance with American laws and regulations, while any misappropriations of
funds by the Kyrgyz leadership were solely the country’s internal affairs and thus at the discretion
of the Kyrgyz judicial system (Roston 2006).
In late 2002, DLA Energy invited new bidders to join the race for the lucrative fuel contracts
at the Manas Air Base. The agency received five valid applications, including AvCard, but DLA
Energy selected Gibraltar-registered Red Star Enterprises Ltd as the new fuel supplier to the base
(USHR 2010). Although the initial contract was for 1 year, beginning February 2003, the contract
with Red Star was reconsidered five times and eventually extended to July 2007 without any
further open tenders (USHR 2010). These procedures were justified with reference to the
‘unusual and compelling urgency’of delivering fuel to one of the most hostile regions in the
world (USHR 2010, 12). Furthermore, although the supplier of fuel to the air base had
changed, both MIS and Aalam remained the only subcontractors. Similar to AvCard’s complaint,
the representatives of Red Star lamented the fact that the company had no choice but to work with
MIS and Aalam, as the Manas airport authority allowed only the mentioned local fixed-base oper-
ators to supply fuel to the airport (USHR 2010). As a consequence, over the period from 2003 to
2005 MIS received nearly USD 87 million, and Aalam Services nearly USD 32 million, from Red
Star (Cloud 2005).
In the Kyrgyz case rent-seeking also accompanied regime instability and chronic state weak-
ness. On 24 March 2005, Akayev and his family fled the country to find political asylum in
Moscow as a result of the popular uprising across the country in protest of his corrupt governance.
Immediately afterwards, the newly appointed prosecutor general, Azimbek Beknazarov, included
the Manas International Airport, MIS and Aalam in the list of 42 Kyrgyz businesses affiliated with
the Akayev regime. Initially, Aalam was investigated for tax evasion and customs fraud.
However, the evidence found was insufficient for the Kyrgyz authorities to build up a convincing
case for those charges, and thus the case developed was based on fraud with regard to the charter
documents.
11
For instance, it was revealed that the tender announcement concerning the sale of
the Manas refuelling complex was published only after the deal had already been agreed with the
State Property Fund of the republic.
12
Accordingly, the privatization of the refuelling complex
was denounced, and the facility was returned to Manas International Airport. As for MIS, Nas-
tayev returned to Kyrgyzstan after the revolution claiming that Aidar Akayev had illegally expro-
priated his company.
13
Shortly thereafter, however, Nastayev withdrew his claims, allegedly
selling his rights in the company to Omurbek Babanov.
14
Rent-seeking in weak states should not be examined as a phenomenon exclusive to the dom-
estic politics of these states. The unlawful enrichment of autocratic rulers and their entourages
cannot be accomplished without the support of local and international brokers, offshore compa-
nies and major financial institutions, which operate within the realm of licit and formal norms
and practices. The denunciation of the Akayev regime after the Tulip Revolution spawned
numerous allegations about Akayev’s offshore bank accounts and clandestine relationships
with international criminal syndicates. Some allegations went beyond factual accusations to con-
stitute the body of a conspiracy theory. Nonetheless, apart from the speculation and domestic
inquiries, a serious investigation of Akayev’s business ventures was conducted by the Federal
Bureau of Investigation (FBI). The Prosecutor General’sOffice of Kyrgyzstan requested assist-
ance from the US Department of Justice to trace the overseas assets of the ousted president,
which could have been acquired through his illegal and corrupt practices (USHR 2010). The
eight-page report produced by the FBI was sent to the new leadership of Kyrgyzstan;
however, shortly afterwards this document was classified by the US Department of Justice
(USHR 2010; Shishkin 2013). Prior to its classification, the New York Times and NBC News
received a copy of this report from the government of Kyrgyzstan (USHR 2010). Aram
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Roston (2006) of the NBC News Investigative Unit revealed that international investigation had
examined a ‘vast amount of potential criminal activities’, with nearly 175 enterprises associated
with the ousted president. In fact, the FBI found that the criminal traces of the Akayevs led to the
USA, where the president’s family had connections with an American ‘known to have formed
over 6000 US shell companies for organized crime factions, weapons, drug traffickers and cyber
criminals’(Roston 2006). Moreover, the FBI report provided an alert that both MIS and Aalam
might have engaged in money laundering via their accounts at Dutch bank ABN AMRO and at
Citibank in New York (Cloud 2005). Both banks reported to the FBI that MIS and Aalam were
‘tied to transactions with arms traffickers, Politically Exposed Persons (PEPs) and a myriad of
suspicious US shell companies associated with the Akaev Organization’(Roston 2006). Edward
Lieberman, an American lawyer hired by the Kyrgyz government to assist with the investigation,
stated that in the period from 18 December 2001 to 12 November 2003 nearly USD 40 million
had been wired from MIS and other related companies to Citibank accounts in New York
(Centrasia 2005). In general, the FBI Eurasian Unit advised that Akayev and his entourage
might have been engaged in ‘siphoning off at least $1 billion from the Kyrgyz state budget’
(Roston 2010).
Offshore jurisdictions turned out to be the major challenge in tracking down the owners and
beneficiaries of Akayev-affiliated businesses. The case of MIS and Aalam was one of numerous
high-profile cases that incriminated Akayev. His family and entourage were engaged in nearly all
lucrative business spheres in the country, ranging from gold mining and gambling to banking and
mobile communications. Although Prosecutor General Beknazarov, American lawyer Lieberman
and head of the State Inquiry Commission Daniyar Usenov promised to locate and return the
overseas assets and accounts of Akayev and his family, their attempts appeared to be populist
and unviable. The State Inquiry Commission struggled to establish even domestic criminal
links between major local businesses and Akayev’s family. The initial list of 42 ventures
alleged to have belonged to Akayev was soon expanded to 73, with the process of identifying
these assets resembling a witch-hunt. The State Inquiry Commission confirmed that the regis-
trations of the companies under investigation included the Isle of Man, the Seychelles, Liberia,
Panama, Liechtenstein, Cyprus and the Cayman Islands, among many others (Jumagulov
2005). Nonetheless, these cases, and particularly the MIS and Aalam affairs, demonstrated that
since the start of Kyrgyzstan’s independence, the so-called Switzerland of Central Asia had not
been detached from the global economy. Akayev and his entourage actively exploited the new
opportunities that opened up after the break-up of the USSR. What was unthinkable during the
Soviet era had become an indispensable part of regime security in Central Asia. By using offshore
companies and global financial mechanisms, Akayev and his family guaranteed themselves a
secure and comfortable living in exile, while the country had become infamously attached to
hidden and informal offshore worlds.
The rise of Red Star and Mina
The theory of rent-seeking rests on the premises that opportunities for personal gain can have sig-
nificant impact on public policy decision making, whilst the quest for personal enrichment may be
camouflaged by the populist rhetoric of social change and development (Congleton, Hillman, and
Konrad 2008). Such a phenomenon was vividly present during the tenure of Bakiyev. He came to
power in March 2005 as a result of the popular uprising against Akayev. As acting president,
Bakiyev immediately began to criticize the illicit and nontransparent base arrangements
between Akayev and the Pentagon. In July 2005, at the meeting of the Shanghai Cooperation
Organization in Astana, Bakiyev signed a declaration to remove foreign military installations
from the country (Cooley 2012).
15
As a result, in July 2005, Donald Rumsfeld, the US secretary
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of defence, had to make a personal visit to Kyrgyzstan to discuss the future of the Manas Air Base
with the new leadership. Nonetheless, sworn in officially as president of Kyrgyzstan on 14 August
2005, Bakiyev continued to denounce the fees paid by Washington to the Kyrgyz side and threa-
tened to evict the base. In October 2005, Condoleezza Rice, the US secretary of state, made a visit
to Bishkek, where she held talks over the base with Bakiyev and his cabinet. Although both
Rumsfeld and Rice were reassured that the base would remain in Kyrgyzstan, they were also
advised that the price for its presence would increase significantly. On 14 February 2006,
Bakiyev stated in an interview to the Russian newspaper Kommersant that the American side
ought to pay USD 207 million per year for the use of the facility (Pannier 2006). Washington
was reluctant to accommodate this new price, which was perceived as disproportionately high
(Cooley 2012). The rounds of negotiations continued, and in 2006 Bishkek and Washington
came to a mutual agreement. The annual rent for the air base was increased from USD 2
million to USD 17 million as part of the larger aid package promised by the USA, totalling up
to USD 150 million per year (Cooley 2010). Nonetheless, in its dispatch to the State Department
in 2007, the US Embassy in Bishkek acknowledged that the Manas Air Base would ‘continue to
lurch from crisis to crisis’, as both the government of Kyrgyzstan and the opposition would con-
tinue to use the base ‘in their own domestic political arguments’(WikiLeaks 2007).
Nonetheless, although there were ongoing political negotiations over the base after the Tulip
Revolution, the fuel supplies to the Manas Air Base had never been interrupted. As mentioned,
Red Star continued to supply fuel to the base until July 2007, receiving in total USD
509,217,358 (USHR 2010). In 2007, the fuel ‘relay baton’was officially passed to the new
vendor, Mina Corp., which turned out to be a rebranded version of Red Star (USHR 2010).
There were rumours that Red Star and Mina, with their opaque operation, unknown beneficiaries
and offshore registration, were enriching both the Akayev and the Bakiyev regime. After the April
Revolution of 2010 and the subsequent ousting of Bakiyev, the American base along with its
secret vendors became the core of diplomatic scandal between the two countries. As a result,
in April 2010, the Subcommittee on National Security and Foreign Affairs of the US House of
Representatives (USHR), under the chairmanship of John Tierney, started an official investigation
of the fuel supplies to the Manas Air Base.
The subcommittee revealed the perturbing details of the fuel supply to the Manas Air Base and
its vendors, Red Star and Mina Corp. (USHR 2010). Red Star belonged to Erkin Bekbolotov and
Delphine Le Dain, who each owned a 50% stake.
16
The USHR (2010, 20), however, was careful
to advise that ‘it is virtually impossible to determine the companies’beneficial ownership through
public records’. The subcommittee also concluded that the real owner of Le Dain’s shares was her
husband, Douglas Edelman, as Delphine Le Dain herself had never actively engaged with the
companies (USHR, 2010).
17
The official website of their holding states that Mina Group is ‘an
international group of companies –Mina Corp Limited, Red Star Enterprises Limited, and
Mina Petroleum FZE –with trading operations in Asia, Europe, the USA and the Middle East’
(Mina Group n.d.). Bekbolotov himself stated that Mina was founded in 2004 ‘as an umbrella
structure for a number of operations in Iraq’, including the petroleum trade and the production
of a daily English newspaper, Iraq Today, published in Baghdad (Hettena 2010; USHR
2010).
18
Although the activities of Mina resembled a CIA set-up, both Bekbolotov and Leon
Panetta, a former director of the CIA, rejected the idea that Mina was an agency project (Shishkin
2013). Nonetheless, thereafter, Mina evolved into a vast corporation that even owned an Internet
company in Kabul and MTVAdria in the Balkans, in addition to mining and commodities trading
interests across different continents (Hettena 2010; LeVine 2010).
19
The term ‘rent’is often benchmarked as income returns which are higher than the minimum
that an economic actor may gain in a competitive market or under alternative conditions (Jomo
and Khan 2000). The broadness of the definition demonstrates that rent-seeking behaviour can
64 K. Toktomushev
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range from illegal activities such as illegal transfers by mafia, to semi-legal activities such as mon-
opoly rents, to legal activities such as short-term profits by innovators or from political lobbying
(Jomo and Khan 2000). In other words, rent-seeking often takes legal and licit forms. In 2001,
Bekbolotov moved with his family to Toronto, where he established Red Star Enterprises
(USHR 2010). Soon after, Bekbolotov and Edelman registered Red Star Enterprises Ltd in Gibral-
tar, the British tax haven known for its hyper-secretive jurisdiction and protection of corporate
interests (Roston 2010). In 2002, Red Star Enterprises Ltd won the DLA Energy contract to
supply fuel to Manas Air Base, and in February 2003 the company began deliveries to the
base (USHR 2010). Concurrently, in 2003, Red Star became the sole supplier of jet fuel to
Bagram Air Base in Afghanistan (USHR 2010). Bagram base commander Colonel Jonathan
Ives recalled that every day approximately 30 Red Star tractor-trailers were delivering nearly
250,000 gallons of fuel to Bagram, transporting it all the way from Uzbekistan through the
Salang Pass and the mountains of Mazar-i-Sharif to Kabul (Roston 2010). Moreover, in 2007,
the leadership of Red Star signed a memorandum of understanding with the US Air Force to
install a proprietary petroleum pipeline at the Bagram Airfield (Roston 2010). The subcommittee
of the USHR (2010) admitted that this memorandum had institutionalized Red Star’s control over
fuel deliveries to the base in Afghanistan, as Red Star retained ownership of the petroleum pipe-
line, while other bidders and fuel competitors were obliged to attain access to it. ‘Surprisingly’,
my anonymous interlocutor mused, ‘neither the Taliban nor the Northern Alliance has dared to
attack Red Star’s tractor-trailers or the pipeline.’
20
Indeed, policy changes and a greater oversight of American fuel procurement practices could
have reduced rent-seeking opportunities in countries like Kyrgyzstan or Afghanistan. In 2007,
DLA Energy announced a new tender to supply fuel to the Manas Air Base (USHR 2010).
The name of Red Star had often been associated with Akayev and his family, and the leadership
of Red Star decided to rebrand the company while submitting a bid for a new contract (USHR
2010). In an email sent to Kari Archer of DLA Energy, Bekbolotov stressed that Red Star and
Mina are two different companies, which ‘share the same management team as far as fuel
trading goes’; however, Mina also ‘employs other management teams that are involved in a
broader range of activities’(USHR 2010, 23). As a result, although the incumbent bid was sub-
mitted by Red Star, the contract was awarded to Mina Corporation (USHR 2010). In fact, from
July 2007 to December 2011, Mina won the tenders for fuel supply to Manas Air Base three times
and, similar to the cases of AvCard and Red Star, its contracts were extended five times without
open and full competition (USHR 2010). These decisions were justified by reasons of national
security and were subsequently classified as secret (USHR 2010). During this stint, Mina received
nearly USD 1.292 billion from the DoD for procurement, delivery and storage of fuel (USHR
2010).
As a result, Red Star and Mina Corp. emerged as the key fuel players in the region, winning
the DoD’s most lucrative petroleum contracts. Although these companies were successful in sup-
plying fuel to the bases in Kyrgyzstan and Afghanistan, the USHR was astonished by the levels of
secrecy and mystery surrounding both the vendors and the DoD’s procurement practices and
questioned why such opaque proceedings were necessary. The new government which came to
power after the ousting of Bakiyev during the April Revolution of 2010 claimed that the nontran-
sparent and secretive nature of fuel supplies to the base was a bribe of sorts by the USA to
Bakiyev’s clan (Roston 2010). Edil Baisalov, chief of staff of the post-2010 interim government,
accused Mina Corp. of paying certain dividends to Maksim Bakiyev, the son of Kurmanbek
Bakiyev, so that the Pentagon could have continued use of the Manas Air Base (Roston 2010).
Dean Peroff, a lawyer for Mina from the law firm Amsterdam & Peroff, has stated that all accusa-
tions against the company are groundless, as the subcommittee’s investigation found no financial
evidence linking the fuel suppliers with the Bakiyev family (Mazykina 2011).
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With access to public information only, it is difficult to track down the direct connection
between the families of Akayev and Bakiyev and Red Star/Mina. The Gibraltar-registered com-
panies, now headquartered in Dubai, continue to operate in a secretive manner. Denis Grigoriev,
the CEO of Mina Corp. and Red Star, emphasized that ‘the company and its representatives have a
policy not to grant interviews or comment directly on political events or situations outside of the
most extraordinary circumstances’.
21
The FBI report on Akayev and his businesses was classified
in 2005, and the date of its declassification is unknown. The US Congress report has shed some
light on the issues of fuel delivery to the Manas Air Base. However, the investigation could have
been more critical and thorough, with wider engagement from the Department of Justice, FBI and
CIA. For instance, the subcommittee concluded that there is no credible evidence linking Mina
and Bakiyev financially. It is uncertain how the subcommittee came to this conclusion,
because the investigators had not conducted a forensic audit, which would have traced every
dollar spent by AvCard, Red Star or Mina. In addition, the subcommittee had not disclosed or
referred to the classified information provided by the State Department and the DoD. As Philip
Shishkin (2013, 229) writes, to Mina’s accusers the findings of the USHR meant that the fuel cor-
ruption ‘was so well hidden and devious as to be beyond the reach of Washington investigators’.
Rise of the subcontractors
The conditions in weak and failed states provide unparalleled economic opportunities for privi-
leged groups to make fortunes by nefarious means (Rotberg 2003). Corruption and nepotism
become the scaffolding of the system, wherein every actor with access to illegal or semi-legal
profits turns out to be interested in safeguarding the existing regime, whilst those excluded
from the lucrative incomes and preferential benefits tend to challenge the ruling actors, but not
the rules of the game. As Sally Cummings (2002, 3) states, ‘Regimes are typically less permanent
than states but more permanent than governments.’In this respect, Bakiyev and his entourage
continued the legacy of Akayev by recapturing the fuel supplies to the American air base
through the use of subcontractors and fixed-base operators. Scott Horton (2010), in testimony
to the subcommittee, stated that apart from the prosecutors, independently hired lawyers from
a Washington-based legal firm investigated the Manas case and presented the findings to
Bakiyev. Nonetheless, according to Horton’s(2010) interlocutor, Bakiyev decided to drop the
criminal case on fuel deliveries simply in order ‘to step into the shoes’of Akayev.
Since subcontractors operated locally, their ties to the ruling elites were more apparent than
their links with either the DoD or the main vendors. As mentioned, the founders of Red Star
formed relationships with MIS and potentially with Aalam even prior to the events of 9/11.
However, after the DoD procurements, these links were cemented, since Red Star became the
base’s only vendor, while MIS and Aalam became exclusive subcontractors. The director of oper-
ations of Red Star and Mina Corp., Charles Squires, who was a defence attaché at the American
Embassy in Bishkek before 2001, confirmed that he was personally introduced to both Adil Toi-
gonbayev and Aidar Akayev when he was taking over the fuel supplies from AvCard at Manas
(Cloud 2005). After the Tulip Revolution of 2005, the leadership of the country changed, as
well as the leadership of both MIS and Aalam. The Kazakh owners of Aalam immediately fled
the country, while the company’s machinery, equipment and two storage facilities were nationa-
lized.
22
The refuelling complex was also returned to the Manas airport. As for MIS, the company
came fully under the control of Babanov, who had already been supplying fuel to MIS since 2003
(USHR 2010).
23
Prior to MIS, Babanov has been building his gas-station empire in Kyrgyzstan,
under the patronage of Aidar Akayev (Jeenbekov 2012). The total control of MIS, however,
opened the door for Babanov to the jet fuel business, from which he had been excluded.
24
Babanov divided MIS into Aircraft Petrol Management (APM) and Aero Fuels Service (AFS)
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and continued to supply fuel to the base.
25
The representatives of Red Star claimed that Bakiyev’s
family was behind MIS (USHR 2010).
26
Bekbolotov confessed that after the ousting of Akayev,
Red Star financed the creation of Kyrgyz Aviation Services (KAS), a proxy company, which
leased Aalam’s former storage facilities (USHR 2010). However, Bekbolotov lamented the fact
that the plan to control the entire fuel delivery process was soon interrupted, when Babanov estab-
lished exclusive rights to access the Manas airport and its storage facilities (USHR 2010). As a
result, Red Star was again subcontracting the fuel delivery with APM, a restructured version
of MIS (USHR 2010).
Nonetheless, despite the involvement of the president’s family in fuel deliveries, the American
vendors continued to supply fuel to the air base via Bakiyev-affiliated subcontractors. The inci-
dent with Hatfield and Ivanov, a driver for Babanov’s company, allowed Mina’s KAS to regain the
subcontracting niche, phasing out Babanov’s stakes (USHR 2010). In May 2008, Mina created a
new firm, Manas Aero Fuels (MAF), with Gazprom subsidiaries. In addition, during that stint,
Mina founded two more firms: Central Asia Fuels (CAF) and Manas Fuel Service (MFS)
(USHR 2010). Mina did not even attempt to disguise its relationships with MAF. Red Star,
Mina and MAF shared the same office space at the Hyatt hotel in Bishkek, while Nurbek Tashi-
bekov, the general director of MAF, had a Red Star–affiliated email account (Tynan 2010b).
Nikolai Ushakov, Edelman’s former employee at the American Pub, registered seven websites
on behalf of Mina, including manasaerofuels.net, cafuels.net, manasfuels.net and kaerofuels.
com (Tynan 2010b). In 2008, MAF managed to fully outbid Babanov’s APM and gained absolute
access to the storage facilities of the Manas airport (USHR 2010).
In rentier states, rent-seeking often takes the form of an elaborate system whereby ‘state elites
and various social groups are joined in complex networks of mutual exchange’(Jackson 2010,
192). As a result, the actors engaged in rent-seeking practices become interested in safeguarding
the established rules of the game. Accordingly, although Mina representatives claimed that MAF,
CAF and MFS were created to guarantee the company full control over fuel delivery, these new
firms were believed to be Maksim Bakiyev’s shares in the lucrative fuel chain (Sorokina and
Saakyan 2011).
27
When Bakiyev came to power, his son Maksim soon allegedly became the
richest person in Kyrgyzstan, taking over all Akayev’s assets, from gold mining and hydro-
energy to banking and mobile communications. He was accused of sharing business interests
with disgraced Russian oligarchs and transnational criminals. His assets and finances were
managed by MGN Group, an investment firm with offices in Moscow, New York and London
(Shishkin 2013). The company was led by an American citizen, Eugene Gourevitch, who was
accused of defrauding Telecom Italia and laundering money for international mafia. The public
reputation of Maksim’s companies was ostensibly sustained by a PR firm, Flexi Communications,
led by a formerly London-based BBC producer, Vugar Khalilov. Maksim’s personal banker was
his friend Mikhail Nadel, whose AsiaUniversalBank, with two former US senators on its board,
became the largest bank in the country during Bakiyev’s tenure (Shishkin 2013). Maksim was so
influential inside the country that no serious political appointments were conducted without his
approval.
28
According to a confidential cable by the US Embassy in Bishkek, British and Cana-
dian businessmen complained to the Duke of York, Prince Andrew, that ‘only those willing to
participate in local corrupt practices are able to make any money’, because nothing got done in
Kyrgyzstan without ‘a cut’for Maksim (WikiLeaks 2008).
Conspiring with state officials, powerful economic groups tend to maximize the rent extrac-
tion in captured economies (Hellman, Jones, and Kaufmann 2000). Unlike in Aidar Akayev’s
case, it is more difficult to establish a direct connection between Maksim and MAF, CAF or
MFS. Baisalov wrote to Shishkin (2013, 229) ahead of his visit to Kyrgyzstan to study fuel
supplies, ‘What do you guys want: some videotape where Maxim is seen taking cash from
Mina? There is no such thing.’However, the USHR (2010) confirmed that its investigation did
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establish that Maksim was informally engaged with the JSC Manas International Airport, the air-
port’s governing authority, which served as a gateway to lucrative fuel procurements. After the
Tulip Revolution, one of the first orders from Bakiyev was to appoint Egemberdi Myrzabekov
the new president of the airport; Bakytbek Sydykov, the son of Bakiyev’s chief of staff, was
appointed Myrzabekov’s deputy (Pobedimov 2005). From 2006, DLA Energy received a few
letters from Myrzabekov, who clearly outlined the criteria that American vendors would have
to meet to supply fuel to the Manas airport (USHR 2010). Taking these requirements into
account, DLA Energy announced on 15 March 2007 that all fuel solicitors had to possess a
letter of authorization from the Kyrgyz airport authorities and a commitment letter from the
fixed-base operators (USHR 2010). As a result, AvCard and AeroControl were unable to
obtain permission from Myrzabekov, while International Oil Trading Company’s letter of
permission was believed not to be genuine (USHR 2010). Mina again won the DLA Energy
solicitation, as the company had secured all authorizations, suitable fuel storages and exclusive
relationships with all local fuel subcontractors (USHR 2010). In turn, MAF became a key
subcontractor for fuel storage (USHR 2010). Moreover, in April 2009, Gourevitch was introduced
to the board of directors of Manas International Airport, while Sydykov was appointed president
of the airport. In a few months, Gourevitch orchestrated the sale of the airport’s refuelling
complex to MAF for approximately USD 7 million, while Mina financed MAF to purchase
this facility (USHR, 2010).
29
After the events of April 2010, Gourevitch would be sentenced
in absentia to 15 years’imprisonment, with confiscation of property, on corruption charges
(Akipress 2011). The Prosecutor General’sOffice would state that the facility itself had
brought in USD 4–5 million per year in rent fees, yet was still sold cheaply to MAF. Although
MAF was in good standing at that time, such operations in favour of MAF raised serious ques-
tions about whether Mina cut a deal with Bakiyev’s younger son or bribed airport authorities
(Shishkin 2013).
Open secrets and closed rules: the political economy of base closure
State officials who control national resources and who often act like resource owners have the
power to manipulate public policy to enrich themselves and their entourage (Mbaku 1998).
Civil servants are lured by the possibilities of rapid enrichment despite the illegality of such
actions and potential criminal prosecution. The merger of private interests and state politics
becomes a central feature of the political economy of weak states. On 3 February 2009,
Bakiyev announced his decision to close the American air base at Manas International Airport.
A few weeks later, the Kyrgyz Parliament unanimously voted for the eviction of the base, and
the Ministry of Foreign Affairs delivered a diplomatic note to the American side to leave the
base in 180 days. This decision had been taken in light of the Kremlin’s promise to provide a
USD 2 billion soft loan to Kyrgyzstan, along with a USD 150 million grant. Nonetheless,
although Bakiyev confirmed the irrevocability of his decision, on 23 June 2009, Bishkek and
Washington signed a new deal, according to which the fees for the use of the airport would
increase from USD 17 million to USD 60 million per year. The installation, renamed the
Transit Center at Manas, would cease to be a military base and became a logistics and transpor-
tation hub.
Although this political move by Bakiyev continued to accommodate the commercial interests
of all engaged parties, Bakiyev’s rent-seeking motives endangered the security of his regime. The
announcement to close the American air base in 2009 was unexpected despite Bakiyev’s early
rhetoric of 2005 to evict the ISAF troops from Kyrgyz soil. In a similar vein, few could have pre-
dicted the changes in the basing agreement between Bishkek and Moscow after the Kremlin’s
pledge to provide a USD 2 billion loan to Bakiyev’s government.
30
Bakiyev’s U-turn enraged
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Vladimir Putin personally, and Putin refused to meet the official Kyrgyz delegation, led by prime
minister Daniyar Usenov, in Moscow.
31
The Kremlin was further ridiculed by Bakiyev’s misuse
of the first instalment of the preferential loan, in the amount of USD 300 million.
32
Maksim
Bakiyev preferred to gamble with this money on the Russian stock exchange through his financial
companies.
33
In addition, Maksim was setting up a scheme to appropriate the remaining USD 1.7
million designated for the construction of the hydro-energy stations in the republic.
34
Although
the proximate causes of the April 2010 events were directly related to the grievances accumulated
within the country during the reign of Bakiyev, the Kremlin contributed to the overthrow of
Bakiyev by heating up the anger generated within Kyrgyzstan via the federal TV channels and
imposing taxes on the export of Russian petroleum products to Kyrgyzstan.
35
It remained contentious whether the Kremlin’s initial goal was the overthrow of Bakiyev’s
regime and the eviction of the American base, although Michael McFaul, the US Ambassador
to Russia, confessed that in 2009 both Washington and Moscow offered bribes to Bakiyev –
the former to keep the base, and the latter to shut it down (Kucera 2012). In fact, WikiLeaks
cables (2009b) reveal that Russian ambassador, Valentin Vlasov, enjoyed an excellent rapport
with the Kyrgyz political beau monde. For instance, at the opening of Maksim Bakiyev’s new
resort, on 20 June 2009, the Russian Ambassador moved ‘like a trusted friend’through the
nervous crowd of the Kyrgyz political and business elite, who waited for the ‘boss’, Maksim,
to arrive and start the ceremony (WikiLeaks 2009b). US charge d’affaires Lee Litzenberger
reported that at some point during this event a member of the Kyrgyz Parliament ran up to the
Russian ambassador to inform him that the American air base would stay in Kyrgyzstan,
because it was ‘all about the money’; unsurprisingly, Vlasov replied, ‘I know it’s about the
money, but I want to see all the details of the money’(WikiLeaks 2009b).
Such private discussions demonstrate that rent-seeking schemes constituted an important part
of political processes in Kyrgyzstan. In a similar vein, behind-the-scenes fuel arrangements reveal
that the Russian call for the Manas eviction was also merely a political gesture. From its very
inception, the fuel for the Manas Air Base was delivered predominantly from Russian refineries
with the tacit approval of the Kremlin. During Akayev’s tenure, MIS and Aalam were procuring
TS-1 jet fuel for the American air base from different locations, including Pavlodar and Atyrau,
Kazakhstan, and the refineries of Turkmenistan.
36
However, the main deliveries were from Gaz-
promneft’sOmskrefinery.
37
Moreover, the established fuel delivery schemes could have been
jeopardized when Putin signed Decree No. 230, dated 20 February 2004, on the ‘Amendments
to the list of equipment, materials and technologies that can be used to produce missile
weapons and which are subjected to export control’(Ministry of Economic Development of
the Russian Federation 2004). Referring to this decree, the Federal Agency for Technical and
Export Control of the Russian Federation banned all exports of jet fuel for military purposes.
38
Nonetheless, the Manas Air Base has not experienced any fuel shortages.
The Congress subcommittee revealed that the American vendors invented a scheme which
allowed Red Star and Mina to evade the ban and continue supplying jet fuel to the base. These
American fuel vendors used their proxy companies to obtain false Kyrgyz certifications, which
stated that the Russian fuel would be used by Kyrgyz civil aviation (USHR 2010). However,
this fuel was then re-procured to Red Star and Mina. All my interlocutors confirmed that it
would be naive to assume that the Kremlin was unaware of this illicit scheme. As Turdukulov
stated, all top Gazprom officials, including Miller, understood where their fuel was really
going, but in the end Gazprom was the recipient of most of the American money. Indeed, it
was apparent and easily calculable that the imported jet fuel was not used for Kyrgyz domestic
purposes. The monthly needs of the Manas Air Base were several times larger than the annual
needs of the ‘half-dead’Kyrgyz civil aviation industry.
39
In some months, the Manas Air Base
consumed more fuel than Moscow’s Sheremetyevo International Airport.
40
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State capture is usually associated with legal actors such as national or international economic
groups that pursue their economic interests mainly through corrupt practices (Garay, Salcedo-
Albaran, and De Leon-Beltran 2009). This phenomenon is often described as ‘a situation in
which individuals, groups or legal firms manipulate the formulation of laws, decrees, regulations
and policies, to gain durable self-benefits’(Garay, Salcedo-Albaran, and De Leon-Beltran 2009,
4). Bureaucratic corruption becomes one of the most perennial indicators of rent-seeking behav-
iour. In light of these developments, the letter from the prime minister of Kyrgyzstan, Igor Chu-
dinov, to the chief executive of Gazprom, Alexey Miller, becomes especially controversial.
41
This
letter, which was presented by Bekbolotov to the USHR, reveals that Chudinov requested Miller’s
assistance in the provision of jet fuel to Kyrgyz aviation. In particular, the head of Gazprom was
asked to ensure that Mina-founded CAF would continue to receive 40,000 tons of jet fuel per
month. Bekbolotov did not disclose how they managed to persuade the prime minister of Kyrgyz-
stan to engage in such a sensitive issue and, moreover, falsely verify that Russian jet fuel would be
used by Kyrgyz aviation. Nonetheless, Horton (2010) reveals that Squires, Mina’s director of oper-
ations, enjoyed an exceptional rapport with Kyrgyz senior officials, including Maksim Bakiyev,
whom he personally saw with Squires at the Hyatt hotel in Bishkek. In addition, my anonymous
interlocutor confirmed that the appointment of Chudinov as prime minister was directly orche-
strated by Maksim because Chudinov was one of Maksim’s cadres.
42
Moreover, the subcommittee of the USHR (2010) revealed that Erkin Bekbolotov, owner of
Mina Group, personally served as a middleman between Maksim Bakiyev and the DoD during the
negotiations over the base.
43
After a meeting with Maksim, Bekbolotov contacted DLA Energy to
outline a proposed solution to the Manas conundrum brokered with the son of the president, and
until 23 June 2009, Bekbolotov continued to serve as a ‘back-door’intermediary (USHR, 2010,
30). In turn, WikiLeaks cables (2009c) reveal that Maksim Bakiyev praised himself for master-
minding the new transit agreement via his ‘American friends in Washington’. If Bekbolotov’s
rationale behind those negotiations was to save a source of his lucrative business, it is
unknown what guided Maksim. After the events of April 2010, the Prosecutor General’s
Office issued a statement that there was an ongoing investigation of the companies belonging
to Maksim, among which were CAF, MFS, KAS, Aircraft Petrol Ltd and Aviation Fuel
Service (Tynan 2010a). If the allegations of the Prosecutor General were genuine, then the
engagement of governmental officials and the rationale of Maksim in saving the base was
clear. In fact, protectionism with regard to the jet fuel business by high-ranking officials was
not exercised with respect to CAF only. Prior to 2005, there was a draft law to impose a tax of
KGS 2000 per ton on all imported jet fuel; however, after 2005 the taxes on imported jet fuel
were lifted by the Kyrgyz Parliament and the president (Tynan 2010a).
44
Moreover, Red Star
and Mina were exempt, per an intergovernmental agreement, from paying any taxes on
Kyrgyz soil (Tynan 2010a). Accordingly, it is highly unlikely that the tax haven for fuel contrac-
tors was spearheaded by incentives to ease the tax burden of businessmen in this republic with a
budget deficit. The rent-seeking nature of the Bakiyev regime presents a rather more realistic
picture, with tax havens used for some secretive purposes.
What is important for Gazprom and other Russian companies is that they have never been
directly engaged with the American vendors or Kyrgyz subcontractors in these transactions.
45
There were two or three intermediary companies that bought fuel from Russia and then resold
it in Kyrgyzstan; there was never direct contact between the initial sellers and Mina.
46
For
instance, in Russia there are few documents publicly available online regarding legal dispute
No. А40–85035/2005 between NefteTrade LLC and the Inspectorate of the Federal Tax
Service of the Russian Federation at the Arbitration Court of Moscow.
47
According to this
case, NefteTrade had purchased fuel from RussNeft’s Syzran refinery and then sold it on to a
third party, Albars LLC. In turn, Albars sold this fuel to Red Star’s KAS. Interestingly, the
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Albars website states that this Bishkek-registered company was created on 29 August 2002 to
export Russian oil to the countries belonging to the Customs Union. The company’s main fuel
suppliers are Russneft, Rosneft, Gazprom Oil and Lukoil (Albars n.d.). Albars also has foreign
bank accounts at BNP Paribas and Bank Hapoalim in Switzerland, with the former also being
a place where Red Star and Mina used to have accounts.
As the Manas case demonstrates, rent-seeking behaviour is not endemic exclusively to non-
democratic countries. There is an incentive for individuals and special-interest groups to capture
the government and influence its distributional outcomes for the purpose of enriching themselves
in both developed and developing states (Mbaku 1998). As Bekbolotov confessed to the USHR
(2010), the Manas fuel supply scheme was political cover for the Kremlin, because if the infor-
mation about Gazprom and Mina became public, the Kremlin would have failed to deal with it
politically and thus would have closed the fuel channel. Tolkunbek Abdygulov, head of the
Economy and Strategic Development Department of the government of Kyrgyzstan, stated in
an interview on 13 September 2012 that this fuel chain was all about making money. The law
of finance is to make money using other people’s money, and in this case there was a stable
buyer –the US Air Force –and a stable seller, the refineries in Russia.
48
What was needed
was to find a way to join the chain between the seller and the buyer and make money.
49
Maksim Bakiyev did not even have to invent anything; he simply outlined the new rules of the
game, and everyone started playing by them, because all parties wanted Russian fuel to be deliv-
ered to the American air base.
50
There is also a pragmatic political explanation of why the
Kremlin permitted the sale of fuel to the base. Fuel was a hook for the Kremlin to have at
least some control over the American base.
51
Had Russia decided to close this particular fuel
channel, the base would have found another source of fuel and would have become totally inac-
cessible to the Russians.
52
This situation was foreseen, because Red Star and Mina were advised
to examine alternative fuel routes and were making contacts in Turkmenistan and in Arab
countries.
53
In general, it is evident that the Kyrgyz fuel scheme was a complex mechanism that involved
senior officials, shell and intermediary firms, the American DoD, and Russian refineries. The web
of links between the companies was as complex as the logistics routes chosen for the delivery of
jet fuel. Whilst ensuring that both Russian and American needs were satisfied, the regimes of
Akayev and Bakiyev managed to turn the air base into a source of rent. The intricate linkages
between the Kyrgyz ruling elites and international actors demonstrate that the small Central
Asian republic was not a mere pawn of great powers but a fully fledged figure in the ‘tournament
of shadows’for fuel, influence and power. In fact, much of the ostensible Great Power politics was
mere acts of virtual politics and a cover for the Kyrgyz ruling regimes to hide their goals of per-
sonal enrichment. The lucrative business opportunities brought together strange bedfellows, blur-
ring the contours of the Central Asian geopolitical map and rendering traditional Cold War
thinking obsolete. Global financial mechanisms and offshore vehicles have become indispensable
to modern Kyrgyzstan, whilst the country has fully immersed itself in the global informal
economy.
Conclusion
This article has sought to examine a complex struggle over the fuel supplies to the American air
base at the Manas International Airport. While unveiling intricate linkages between different
actors over access to the Manas Air Base, this work has demonstrated that the American air
base became a source of rent for the ruling elites in Kyrgyzstan. Both Akayev and Bakiyev
(and their entourages) exploited the DoD’s lucrative fuel contracts for personal enrichment and
to strengthen their regimes. The capture of fuel supplies for the Manas Air Base was accomplished
Central Asian Survey 71
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through the use of subcontractors and fixed-base operators. In the case of Akayev these compa-
nies were MIS and Aalam, and in the case of Bakiyev they were purportedly KAS, APM, AFS,
CAF and MAF. Although the fuel deliveries to the Manas Air Base were always controlled by the
inner circle of the ruling president, the remaining elite groupings were eager to alter these arrange-
ments. As a result, lucrative fuel contracts became a source of fracture within the Kyrgyz elite and
led to substantial power shifts and political instability in the republic, which eventually turned into
the successful uprisings against first Akayev and then Bakiyev. Moreover, the Manas business
arrangements demonstrate that the geopolitically motivated concept of the New Great Game
lacks empirical evidence in Kyrgyzstan. Common business interests overshadowed potential geo-
political points of friction, while financial vehicles and offshore mechanisms ensured that these
secret arrangements remained intact. The regimes of Akayev and Bakiyev managed to play off
both Washington and Moscow for their own rent-seeking interests, as the complex fuel
schemes involved not only Kyrgyz senior officials, and shell and intermediary companies, but
also the American DoD and Russian refineries. As a result, Kyrgyz politics emerged as part of
a complex constellation with transnational connections and global outreach.
Disclosure statement
No organization has a vested interest in the outcomes of my research, as I am on a joint scholarship awarded
by the University of Exeter and the University of Central Asia to support aspiring Central Asian scholars in
their academic endeavours.
Notes
1. The base was unofficially named in honour of American firefighter Peter Ganci, who was killed in the 9/
11 terrorist attack.
2. In this work, the terms Manas Air Base and Transit Center at Manas will be used interchangeably.
3. For example, the American forces operating out of the Manas Air Base consumed up to 500,000–
600,000 gallons of TS-1 jet fuel per day (USHR 2010; Cooley 2012).
4. After the news coverage, the amount of the American compensation increased substantially, and the
initial compensation was portrayed by the US officials as an interim payment to the Ivanov family
(Arykbayev et al. 2011).
5. For instance, the movie Baza (2009), which was publicly broadcast on the Russian federal channel
Rossiya, claimed that there were special two-storey buildings with no windows, limited access and
strict temperature controls on the territory of the air base. The producer of this movie argued that one
of those buildings hosted a multichannel and multifunctional electronic surveillance system,
ECHELON, to intercept satellite, cellular, radio and fibre-optic communications, with estimated cover-
age of all of Central Asia, parts of China, and Siberia. Some scholars and politicians also assert that the
base had become a transit point for Afghan heroin and opium bound for European markets (Mamontov
2009). They argue that the main European distribution points for Afghan drugs were US air bases, such
as Ramstein in Germany, Bondsteel in Kosovo and two air bases in Spain, through which aircraft from
Manas transited (Baza 2009).
6. B. Ashirov, former deputy chief of staff, presidential administration, government of Kyrgyzstan, inter-
view, 29 October 2012.
7. M. Djumaliev, ambassador of Kyrgyzstan to the USA, interview, 15 November 2012.
8. B. Ashirov.
9. Anonymous, fuel logistics expert, interview, 21 December 2012.
10. Anonymous fuel logistics expert.
11. Anonymous fuel logistics expert.
12. Anonymous fuel logistics expert.
13. Anonymous fuel logistics expert.
14. Babanov, a good friend and a business partner of Aidar Akayev, was at that time the owner of the oil
company Alliance, which monopolized the domestic petrol market (anonymous fuel logistics expert).
72 K. Toktomushev
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15. In the same month, Uzbekistan delivered a diplomatic note to the USA requiring it to vacate the Karshi-
Khanabad air base from its territory within 180 days.
16. The first owner of the company, Erkin Bekbolotov, is a Kyrgyz national, son of the former minister of
agriculture and water resources under Akayev, Jenishbek Bekbolotov (anonymous fuel logistics expert).
Erkin graduated from the Kyrgyz State University of Construction, Transport and Architecture, named
after N. Isanov, majoring in finance and accounting (Turdukulov, chairman of the Foundation of Pro-
gress, interview, 12 November 2012). From 1994 to 1995, he studied at Pace University in
New York and, after returning to Kyrgyzstan, was employed by two consulting companies for a short
time, during which he was responsible for the provision of educational services and market research
to the local fuel firms (USHR 2010). In late 1996, he joined the Kyrgyz Petroleum Company, a
closed joint stock venture created by the government of Kyrgyzstan and a Canadian investor (Turduku-
lov). Being responsible for the fuel supplies and logistics of the Jalal-Abad refinery, Bekbolotov soon
rose to the position of general manager at Kyrgyz Petroleum (anonymous fuel logistics expert). In
1998, he negotiated the sale of the Jalal-Abad refinery and left the company to start his own business
(USHR 2010; anonymous fuel logistics expert).
17. It appears that the business relations of Bekbolotov and Edelman with the companies belonging to Aidar
Akayev and Adil Toigonbayev developed even prior to the DoD fuel procurements. In 1998, Bekbolo-
tov met Douglas Edelman, and in 1999 they teamed up to supply jet fuel for civilian aviation at Manas
International Airport (USHR 2010). Originally from Stockton, California, Edelman had been living and
doing business in Kyrgyzstan since the mid-1990s, establishing several fuel trading firms and even
owning the expats’favourite bar, American Pub, in Bishkek (Hettena 2010; USHR 2010). It is believed
that Edelman still holds an American passport, although he has lived abroad for more than 25 years
(USHR 2010). Allegedly, Edelman currently resides in Kensington, London (LeVine 2010). In testi-
mony to the USHR (2010), Bekbolotov stated that one of Edelman’s companies used to supply jet
fuel to Kyrgyzstan’s national airline, which owned Manas International Airport. As mentioned, in the
late 1990s the airport belonged to the JSC National Airlines (Kyrgyzstan Aba Joldoru), which was
later decentralized and privatized. In the course of this privatization, the refuelling complex of the
Manas airport was transferred to Toigonbayev’s Aalam. In addition, Bekbolotov confirmed that both
he and Edelman had helped create another fuel company, MIS, with a 40% ownership share in the
name of Edelman’s French wife (USHR 2010). The remaining 60% was divided between three
unidentified Kyrgyz businessmen who later in 2001, according to Bekbolotov, expropriated their
40% share (USHR 2010). Nonetheless, Bekbolotov and Edelman continued to supply jet fuel to
MIS, which in turn was selling it to Manas Jet Services, which supplied Manas International Airport
(USHR 2010).
18. Mina Media’s director, Stephen MacSearraigh, used to serve as the director of both Mina Corp. and Iraq
Today (Hettena 2010).
19. Edelman, who is also linked to Aspen Wind Corporation, a financial consultancy firm with executive
offices in Cyprus, turned out to be an executive producer of a film about evangelist Billy Graham,
Billy: The Early Years (2008). The film was financed by Solex Productions, a sister company of
Mina Media (Hettena 2010). Hettena (2010) discovered that Mina Media is registered in Nicosia,
Cyprus, and is a subsidiary of Mina Corp. The company owns and runs MTV Adria, which broadcasts
in Slovenia, Serbia, Croatia, Macedonia, Bosnia and Herzegovina, and Montenegro.
20. Anonymous fuel logistics expert interview.
21. Email to the author, 19 December 2012.
22. Anonymous fuel logistics expert.
23. Anonymous fuel logistics expert.
24. Anonymous fuel logistics expert.
25. Turdukulov.
26. Indeed, Babanov was a business partner and a good friend not only to Aidar Akayev but also to Maksim
Bakiyev (Jeenbekov 2012). After the flight of Aidar, Babanov became the sole supplier of fuel, as
Maksim did not immediately understand the conjuncture of the fuel delivery schemes (Turdukulov).
By that time, experienced Babanov was already in the jet fuel business and knew how the system
worked (Turdukulov).
27. Turdukulov.
28. Anonymous, security adviser, interview, 14 January 2013.
29. This is the refuelling complex that was illegally transferred to Aalam Services during Akayev’s admin-
istration and then nationalized.
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30. These political events reinvigorated the popular tale of the New Great Game on the grand chessboard
of Central Asia. The Kremlin always reacted sensitively to any developments in the region related to
the engagement of other players. After the events of 9/11 Vladimir Putin openly supported George
W. Bush and the US-led war on terror, as Russia preferred to bandwagon the USA. Nonetheless,
with the rising prices for oil and gas world-wide, the rhetoric of senior Russian officials changed,
and the political discourse in Russia was again focused on the geopolitical rivalry between
Moscow and Washington. In 2003 Russia opened a military base in Kant, Kyrgyzstan. In Soviet
times, the Kant air base was a military aviation school, where pilots from the communist satellite
countries (among whom were even two presidents, Hosni Mubarak and Hafez al-Assad), were under-
going aviation training (Mironov n.d.). The new Russian air base, 30 km from the American air base,
became the first military installation of Russia beyond its borders since its independence. The Russian
leadership began to call for the eviction of all American military installations from its nearby terri-
tories and from Kyrgyzstan in particular, although the latter was installed with the approval of
Moscow.
31. Anonymous, political advisor, interview, 6 May 2013.
32. T. Abdygulov, head of the Economy and Strategic Development Department, government of Kyrgyz-
stan, interview, 13 September 2012.
33. Abdygulov.
34. Anonymous political advisor.
35. Immediately after the April Revolution, at the Minsk press conference in 2010, Bakiyev asserted that in
February 2009 he had felt cheated by the Russian leadership. The ousted president revealed that he had
had a lengthy conversation with both Medvedev and Putin prior to the announcement of his decision to
terminate US access to the Manas Air Base (Centrasia 2010). According to Bakiyev, the Russian leader-
ship was irritated by the presence of the American forces in Kyrgyzstan and was willing to offset the
costs of evicting the base. However, the very next day after Bakiyev agreed to this deal and publicly
announced his decision, the leaders of Russia, Kazakhstan, Tajikistan and Uzbekistan expressed their
willingness to host American air bases, even though Washington’s options were not limited to
Central Asia (Centrasia 2010). For instance, when the Kyrgyz government delivered a formal notifica-
tion to the USA of its intent to evict the base, Hillary Clinton sent a cable to the American agencies to
examine the receptivity of the governments of the United Arab Emirates, Bahrain and Oman to the shift
of ISAF operations to their facilities (WikiLeaks 2009a). The US State Department also advised the con-
sideration of the Azerbaijan facilities as an alternative (WikiLeaks 2009a). Bakiyev lamented: ‘It turned
out that only Kyrgyzstan was against [the presence of the American troops in Central Asia], whilst
everyone was for it. This was a slap in the face from the Russian leadership’(Centrasia 2010).
Bakiyev referred to these developments as the justification for his decision to keep the American air
base in Kyrgyzstan. Nonetheless, taking into account the vested interests of Bakiyev’s son in the lucra-
tive fuel business, it remains contentious whether Bakiyev was guided by Russian ‘deceit’to keep the air
base in the country.
36. Anonymous fuel logistics expert.
37. Anonymous fuel logistics expert. The Omsk refinery is the largest petroleum refinery in the world, with
annual production capacity of approximately 21 million tons of crude oil, and is a subsidiary of Gaz-
promneft, which in turn is a subsidiary of Gazprom (Gazprom Neft, n.d.).
38. Turdukulov. Both Bekbolotov and the DoD officials claimed that they had not seen this decree, and
doubted whether it existed. However, the document is freely available on the Russian internet.
39. Turdukulov.
40. Turdukulov.
41. The original letter is published in the report Mystery at Manas by the USHR (2010).
42. Anonymous security adviser.
43. Erkin, who was a contemporary of Maksim, admitted before the USHR that they were indeed ‘social
acquaintances’and had known one another since they were teenagers (USHR 2010, 32; Shishkin
2013, 230). The fathers of Maksim and Erkin came from the same Jalal-Abad region and both had
had high-level positions in the governments of Akayev. Although he claimed that ‘personally’he did
not do any business with Maksim, Bekbolotov confirmed that he had approached Maksim to save the
base (USHR 2010, 32).
44. KGS 2000 is approximately USD 40.
45. Anonymous fuel logistics expert.
46. Anonymous fuel logistics expert.
47. For instance, there are some documents available on the legal portal pravo.ru.
74 K. Toktomushev
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48. T. Abdygulov, head of the Economy and Strategic Development Department, government of Kyrgyz-
stan, interview, 13 September 2012.
49. Abdygulov.
50. Abdygulov.
51. Anonymous, former deputy minister of foreign affairs of the Kyrgyz Republic, interview, 23 December
2013.
52. Anonymous former deputy minister of foreign affairs.
53. Anonymous former deputy minister of foreign affairs.
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