http://blog.wired.com/defense/2008/07/how-to-do-busin.html#moreHow to Do Business With a Blacklisted Russian Weapons CompanyWe now know that the U.S. Army handed out a sole-sourced deal to sell nearly two dozen Russian Mi-17 helicopters to Iraq. But the lingering question is, how?
Rosoboronexport, the Russian state agency in charge of military exports, is blacklisted from working on U.S. government deals. So how did the U.S. Army and the Carlyle Group-owned company ARINC manage to pull off the $325 million deal? Or more to the point, did they knowingly violate this ban?
Let's talk about that ban. In July 2006, Rosoboronexport was accused by the U.S. government of violating the Iran-Syria Nonproliferation Act and was placed on what is informally called a "no go" list, ostensibly shutting the Russians out of some big-ticket foreign military sales to Iraq (ironically, the Russians deny wanting to sell weapons to Iraq, given their unhappiness over the U.S.-led invasion).
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Given all this, how did ARINC set up the helicopter deal? According to contract details confirmed by the Pentagon, ARINC avoided the Rosoboronexport ban by purchasing the helicopters as commercial items from Kazan, a Russian helicopter manufacturer, thus avoiding direct work with the Russian state agency, which handles military exports. The helicopters would be converted for military use in the United Arab Emirates. That would make the deal costly, but legal.
Well, unless the other companies involved are owned by Rosoboronexport.
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So, who is responsible for this colossal mess? Well, it could be the State Department, whose spokespeople were too afraid to even go on the record saying that working with Rosoboronexport is illegal despite rather clear language in the federal register; it could be the U.S. Army, which negotiated this deal, or it could be the Pentagon, which has oversight of these sales. Or, it could be that this is evidence, yet again, that contracting in Iraq has thoroughly destroyed the interagency process and oversight that is supposed to ensure that U.S. laws are enforced.
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