AP Exclusive: Accusations dog Russian copter deal

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WASHINGTON (AP) — U.S. military officials insisted atop-secret Pentagon study proved the need to
buy Russian helicopters forAfghanistan’s security forces. But the study actually recommended anAmerican-made
rotorcraft, according to unclassified excerpts obtained byThe Associated Press.The excerpts show the U.S.
Army’s workhorseChinook, built by Boeing Co. in Pennsylvania, was "the mostcost-effective single
platform type fleet for the Afghan Air Force over a20-year" period.The finding has triggered
allegations theDefense Department misled members of Congress and improperly cut U.S.companies out of
competing for a contract that has swelled to more than$1 billion.More than two years since DOD announced it
wasacquiring Russian Mi-17 helicopters, a veil of secrecy still obscuresthe pact despite its high-dollar
value, the potential for fraud andwaste, and accusations the Pentagon muffled important
information.Theunprecedented arms deal also serves as a reminder to a war-wearyAmerican public that
Afghanistan will remain heavily dependent on U.S.financial support even after its combat troops depart.Sen.
JohnCornyn of Texas, the Senate’s No. 2 GOP leader, said DOD "repeatedly anddisingenuously" used
the 2010 study to justify the Russian helicopteras the superior choice for the Afghans.Congress only
recently received a copy of the document."Sowhy are we buying Russian helicopters when there are
Americanmanufacturers that can meet that very same requirement?" Cornyn asked.Asrecently as September,
Deputy Defense Secretary Ashton Carter cited thestudy in a letter to House members defending the Mi-17
decision. Carterleft his job last week.Last year, Frank Kendall, the Pentagon’stop acquisition official, and
policy chief James Miller pointed to thestudy in a written response to questions posed by Cornyn.Just afew
weeks after the secret study was completed, Army Secretary JohnMcHugh wrote in a 2011 memo "that the
Mi-17 stands apart" when comparedwith other helicopters.The Pentagon denies it misled Congress.Asenior
department official said the study was focused on long-termrequirements and not the immediate needs of the
Afghan military, whichwere best met by the Mi-17. Also, U.S. commanders in Afghanistan wantedthe Russian
helicopter because it is durable, easy to operate and theAfghan forces had experience flying it, according
to the official, whowas not authorized to be identified as the source of the information.The war in
Afghanistan, now in its 13th year, has been full of paradoxes.Whatwas once President Barack Obama’s
"war of necessity" has become a racefor the exits. Hopes of eradicating the Taliban and
transformingAfghanistan into a viable state have been dialed down. U.S. combatforces are scheduled to depart
by the end of next year, leaving theAfghans responsible for ensuring the country doesn’t collapse into
thepre-Sept. 11 chaos that made it a terrorist haven.There’s nodispute that heavy-duty helicopters capable
of quickly moving Afghantroops and supplies are essential to accomplishing that mission. But thedecision to
acquire them from Russia has achieved the rare feat in adeeply divided Congress of finding common ground
among Republicans andDemocrats.Why, lawmakers from both political parties havedemanded, is the U.S.
purchasing military gear from Russia? After all,Russia has sold advanced weapons to the repressive
government in Syriaand Iran, sheltered NSA leaker Edward Snowden and been criticized by theState Department
for adopting laws that restrict human rights.Ontop of all that, corruption is rampant in Russia’s defense
industry,heightening concerns that crooked government officials and contractorsare lining their pockets with
American money."We’re not dealingwith a corrupt system. Corruption is the system," said Stephen
Blank, aRussia expert at the American Foreign Policy Council, a Washington thinktank. "This is not a
world we’re familiar with."Overall, 63Mi-17s are being acquired through the 2011 contract. It was
awardedwithout competition to Russia’s arms export agency, Rosoboronexport,even though the Pentagon
condemned the agency after Syrian PresidentBashar Assad’s forces used Russian weapons to "murder Syrian
civilians."Rep.Rosa DeLauro of Connecticut, a high-ranking Democrat on the HouseAppropriations
Committee, said the arrangement has put Americantaxpayers in the intolerable position of subsidizing a
company complicitin the atrocities occurring in Syria."The lack ofstraightforward information from the
Pentagon on the ability ofAmerican-made helicopters to meet the mission in Afghanistan is butanother factor
severely undermining their credibility and justificationfor pursuing this sorely misguided
procurement," DeLauro said.No Pentagon official was made available to speak on the record for this
story.TheAP also requested in late October that the department releaseunclassified portions of the 2010
study and other records supporting thedecision to buy Mi-17s instead of Chinooks or other helicopters.
Thedepartment provided only a one-page summary of a report that provided nonew information.Afghanistan’s
mountainous terrain demands ahelicopter capable of operating in the most rugged conditions ataltitudes well
in excess of 15,000 feet. The Mi-17 met all theserequirements, Carter and other U.S. military officials told
lawmakers incorrespondence and in testimony.But so could the heavyweightChinook. The Boeing helicopter is
larger than its Russian counterpart,carries up to a 26,000 pound payload, which is twice as much as
theMi-17, and can operate at nearly the same high altitude.The armedMi-17s being purchased for Afghanistan
from Rosoboronexport willreplace older and less capable Mi-17s that the U.S. and other countrieshad
purchased from brokers and contractors through the open market andthen donated or loaned to the Afghans.The
fact that the Afghan forces had years of experience flying the Mi-17 figured prominently in the Pentagon’s
decision.Carterand other U.S. defense officials contended that adding the Boeinghelicopter to the mix would
unnecessarily burden the Afghans with havingto learn how to operate and maintain an unfamiliar
helicopter.The2010 study "specifically analyzed the opportunity for DOD to provide aU.S. alternative to
the Mi-17 for Afghanistan," according to theexcerpts.It outlined a transitional approach in which
Chinooksbeing retired from the U.S. military’s fleet would be available in late2013 to be refurbished and
then replace older Mi-17s in the Afghanfleet, according to the excerpts. A combination of Mi-17s and
renovatedChinooks, known in the Army’s nomenclature as the CH-47D, could work aswell.The 2010 study advised
proceeding cautiously. Shifting tooquickly away from the Mi-17s already in use could undermine progressmade
in training the Afghan air force, the excerpts said. But itrecommended a plan for converting the Afghan
forces from a "pure" Mi-17fleet to one that uses U.S. helicopters.The Chinook option never
materialized.Anextensive analysis of both helicopters concluded that a refurbishedChinook would cost about
40 percent more overall to buy and maintainthan the Mi-17, said the senior defense official.That’s hard to
fathom.Boeingexecutives informed congressional staff during a meeting held in lateSeptember that the cost of
a refurbished CH-47D would be in the $12million to $14 million range, according to a person knowledgeable
aboutthe discussion but not authorized to be identified as the source of theinformation.That would make an
overhauled Chinook $4 million to$6 million less than what the department is currently paying for
Mi-17s,according to figures compiled by the Joint Rapid Acquisition Cell, thePentagon office that fills
urgent requests for equipment frombattlefield commanders.Boeing spokesman Andrew Lee referred questions
about Chinook costs to the Defense Department.Thefigures also show the average cost of each new Mi-17 has
increased witheach successive order — from $16.4 million to $18.2 million. ThePentagon has assured Congress
that the prices were "fair andreasonable," and in line with what other countries have paid.Butan
internal Defense Contract Audit Agency document shows that thedepartment could not conduct a comprehensive
cost comparison becauseRosoboronexport wouldn’t allow U.S. auditors to look at its books.Armynegotiators
omitted a provision standard in government contracts thatpermits pricing reviews. In examining the contract,
the audit agencynoted that Rosoboronexport "is arguably an agent or instrumentality of aforeign
government and is therefore exempt from most cost accountingstandards."Rosoboronexport’s director
general, Anatoly Isaykin,said in statement late last month that his agency was
"completelytransparent" in negotiating Mi-17 prices with the U.S. He provided nodetails on costs
or any examples of transparency."In our opinion,this contract is most acceptable to the U.S. Department
of Defense interms of quality/price ratio," Isaykin said.The roots ofRosoboronexport’s involvement
reach back to 2010 when the U.S. andRussia were engaged in high-stakes diplomacy aimed at fulfilling
Obama’sgoal to reset relations between the two former Cold War foes.DmitryMedvedev was Russia’s president,
not Vladimir Putin, and the talksresulted in agreements to expand cooperation on global security issuesand
strengthen economic ties.Among the breakthroughs: The U.S.terminated penalties against Rosoboronexport that
the Bush White Househad imposed in 2006 after the State Department determined the exportagency had provided
Iran and Syria sensitive military technology. Thesanctions had barred the U.S. government from entering into
anycontracts with Rosoboronexport. Russia agreed to support a U.N.resolution to punish Iran over its nuclear
program.Headquarteredin Moscow, Rosoboronexport is the only Russian agency authorized toexport and import
military hardware. The agency is controlled in turn byRussian Technologies, a state holding company that
includes thecountry’s top arms manufacturers. The chief executive of RussianTechnologies is Sergei Chemezov,
a longtime confidant of Putin, whoreturned to the Russian presidency last year.U.S. officials long have
known corruption in Russia’s defense industry is widespread.WilliamBurns, then the U.S. ambassador to
Russia, wrote in a 2007 classifiedcable later published by the Wikileaks website that "it is an
opensecret that the Russian defense industry is an important trough at whichsenior officials feed, and
weapons sales continue to enrich many."Nothing has changed, but figuring out who is personally
profiting is nearly impossible, said Russia expert Clifford Gaddy.Only a small circle of investigators close
to the Kremlin know who is involved in various schemes."Sincethe information they have is one of the
most powerful instruments Putinhas to control the individuals who run Russia on a day-to-day basis,they
protect that information," said Gaddy, a senior fellow at theBrookings Institution and co-author of
"Mr. Putin: Operative in theKremlin."With the penalties lifted against Rosoboronexport,Russia’s
ministry of foreign affairs wasted little time informing U.S.officials that new Mi-17s could be purchased
only through the armsexport agency because the helicopters were military gear intended foranother country’s
armed forces.After lengthy deliberations, theU.S. agreed. Pentagon officials no longer would permit third
parties toacquire Mi-17s. They would deal with Rosoboronexport directly.Lastmonth, the Pentagon changed its
mind. After re-evaluating, officialsdecided to cut 15 copters out of the 78 they had planned to buy
fromMoscow. Isaykin, Rosoboronexport’s director general, said the decisionwon’t hurt the export agency’s
bottom line."Rosoboronexport’sorder book is sufficient to ensure the steady utilization of
Russiandefense industrial complex’s production capacities, especially in thehelicopter sector, for the next
three-four years," he said.The move was a bittersweet victory for the program’s
opponents."Therewas no redeeming value, no redeeming feature to this sale," said Sen.Richard
Blumenthal, D-Conn. "An inferior product bought with Americantaxpayer money from a Russian export
agency that was unconscionablyselling to Assad. If you made it up, no one would believe
it."___Associated Press writer Vladimir Isachenkov in Moscow contributed to this report.___Follow
Richard Lardner on Twitter: https://twitter.com/rplardnerCopyright 2013 The Associated Press. All
rightsreserved. This material may not be published, broadcast, rewritten orredistributed.

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