KBR subcontracting Air Bas

By Nick Confessore
Newsweek's Mike Isikoff follows up on arms dealer Victor Bout's flights into Iraq. Other folks have been bird-dogging this one recently, including Michael Scherer , who was the first to publish a magazine article on the Bout companies' refueling contracts. But Isikoff adds two juicy scoops: The exact number of flights Bout-connected firms made into Iraq (142!) and the fact that the firms were contracted by Halliburton subsidiary Kellogg Brown & Root (KBR).

This is a very big story. Under the Clinton administration, the United States was trying to shut Bout down. Under the Bush administration, we gave him permission to fly into Iraq and refuel at American bases. Throw in Halliburton and, as British blogger Alexander Harrowell -- who, as far as I can tell, was the first guy to uncover evidence of the fuel purchase agreements -- says, you have "something like a Bush administration perfect storm."

Doug Farah, a veteran foreign correspondent formerly with the Washington Post, has also been monitoring these developments. He points out:
By my count, if the contracts were voided after 7 months, or roughly 28 weeks, that means Air Bas was refuelling five times a week at U.S. military bases. Hardly an occassional operator in the field.
So what was Bout doing for the Pentagon? Here's one theory. When I was digging into this story last summer, some documents I found with Harrowell's help indicated that one Bout-linked firm was drawing fuel from the Army as of March 10th, 2004, and another as of April 5, 2004. This roughly coincides with the early stages of the insurgency in Iraq, at which time coalition forces in Iraq found themselves in a massive logistics crunch; it was increasingly difficult and dangerous to convoy supplies and ammunition over the roads. One source of mine, working for a contractor active in Iraq, recalled that the Pentagon began leasing airlift capacity from just about anyone who had it, while also outsourcing a lot of convoy duty to private security firms to limit the exposure of American troops. So it may be that the Bout-linked firms got contracted in a mad scramble for airlift capacity. Given all the ways Bout is known to mask his connections to these companies, KBR may well not have known who they were ultimately dealing with. But it's still another black eye for the guys running the Pentagon. Because they didn't plan for a tough occupation, they ended up so desparate for airlift capacity that they resorted to hiring companies tied to one of the most notorious arms-and-diamond smugglers in the world -- who also smuggled guns to the Taliban! Pretty bad.

But here's the real question: When did anyone in charge become aware that one branch of the U.S. government was lining the pockets of a guy whom another branch of the U.S. government was trying to nail? Last May, the Financial Times reported that British officials had joined American officials in an effort to keep Bout off a UN sanction registry applying to individuals who had helped run guns to former Liberian strongman Charles Taylor. (Supplying guns to African regimes was one of Bout's principal ventures, and the one for which he was most reviled, until recently.) Why? Because, an anonymous diplomat complained, "the American defence forces are using Victor's planes for their logistics."

Now, the Financial Times is a reputable paper, but a couple of people I spoke with last summer, and who had no reason to defend the Bush administration, wondered whether the story could possibly be true -- whether knowledge of Bout's work for the Pentagon was so widespread among top U.S. officials. Now you have to wonder.

Soon after the Times published that story, Senate Democrats asked State's Dick Armitage and Defense's Paul Wolfowitz if there was anything to the allegations. Both said they didn't know anything about it, but would look into the matter. In his own article, published in September, Scherer notes that: An inquiry conducted by the State Department found, according to a State Department source, that "there were allegations that raised our concerns, and we shared those concerns with the Department of Defense." Months later, however, the Pentagon has yet to respond, and officials there would not say whether they are looking into the State Department's concerns.
So we can surmise that State looked into it, and got rebuffed by the Pentagon -- which, according to Scherer's sources, continued to use Bout's services through the summer.

As Isikoff notes in passing in his story, it took Bush until July to issue an executive order directing the Office of Foreign Assets Control, which is based out of the Treasury Department, to finally add Bout to a list which essentially freezes his assets here in the United States and forbids Americans from doing business with him. (It's not the same as the UN list mentioned above -- it's kind of the U.S. version of that list.) And it's not as if Bout just got onto the United States' radar screen. The Clinton administration had been after Bout for several years before Bush took office.

So one is tempted to infer that the Bush administration pressured the UN to keep Bout off the international asset freeze list because the Pentagon didn't want to be deprived of his services in Iraq, and waited until his services were no longer required before they got around to adding him to the United States' own asset freeze list.

Surely there's a newspaper investigative unit out there that wants to pick this one up.

--Nick Confessore

This is what Alexander Harrowell a.k.a. The Yorkshire Ranter had to say:
What happens when something reaches critical mass? I'll tell you - a huge ball of really hot radioactive stuff spreads out in all directions in instants. That's roughly what's happened since earlier this morning with The Story. The LA Times has an impressive story giving quite a lot of detail on the whole thing. Apparently, although the contracts via Falcon Express were spiked in August, an Ilyushin 18 belonging to Irbis Air Co. turned up in Balad as recently as the 22nd of October. Igor Zhuravylov, BGIA's flight ops director, was interviewed and gave the following insight into the stringent background checks applied to the Defence Energy Support Centre's fuel accounts:
"In December 2003, he said, he struck up a conversation with a U.S. military fuel truck operator at the Balad airfield. Zhuravylov said the soldier gave him a blank government form, urging him to fill it out and mail it to military officials.

In April, "to my big surprise, I received a plastic card for each of our planes which allowed us to get military fuel," Zhuravylov said. British Gulf's business boomed.

"It was really so good," Zhuravylov said. "All by the mail. No inspectors, nothing like that. Write a letter, fill a form, get a card." Well, I laughed my arse off at that one. It's also interesting that although Viktor Bout himself was blacklisted on the 22nd of July, none of his businesses or aircraft were. Did they think he accompanied every flight in person?

One explanation for this remarkable incompetence, of course, would be that somehow their hearts weren't in it. Nick Confessore appears to have picked up a crucial point in this direction, pointing out just how the case came to light in the first place. Remember, it was the fact that suddenly the US and British governments didn't want Bout's name on a UN asset freeze list (when it had been their policy for years to close him down) that initiated the whole story. Now, the initial reaction seems to be that it was all a terrible mistake. Somehow they just slipped through the net. But if that was so, and the officers, officials, and contractor executives involved just didn't know what was going on, how could both the State Department and the British Foreign Office have changed their policy? Confessore also picks up another key point, which I covered in this post back in May. This is that the contracts are dated to the same period as the first Sadr uprising, when the US rapidly lo! st control of the roads and faced a serious quartermaster crisis. Even the Green Zone was on half rations for a while. You could see why large heavy-lift aircraft suitable for near-tactical flying (basically, the equivalents of the USAF's C-130s and C-17s) were at a premium.

That doesn't explain, though, the fact that BGIA apparently became aware of the fuel credit system in December, 2003, nor that photos place 9L-LEC in Baghdad in January 2004, nor that S9-DAE was photographed in Mosul, December 2003, nor that according to the LA Times the CIA were "concerned" about possible dealings with Bout in October, 2003.

Another thing it doesn't explain is the fact that apparently it was the British Government who chartered Jetline (or perhaps Jet Line) twice.

Merchant of Death, the book... Former West African Bureau Chief of the Washington Post Douglas Farah and Los Angeles Times National Correspondent Stephen Braun detail how a small circle of U.S. officials and international investigators worked doggedly to shut down Viktor Bout's arms pipelines, only to be trumped by Bout's ingenuity and by their own inability-and, in some cases, unwillingness-to confront the dark side of the new world order.

Back to Victor Bout's file

Created: 25-01-05 Updated: 25-5-05