U.S. lawmakers ask Holder to back probe into Russian helicopter program

Reuters News
Posted: Sep 17, 2013 3:15 PM

By Brian Grow and Warren Strobel

(Reuters) - A group of U.S. lawmakers called on U.S. Attorney General Eric Holder on Tuesday to reinforce the Pentagon's criminal investigation into an Army aviation unit that awarded millions of dollars in contracts to Russian and U.S. firms to maintain and overhaul Russian-made Mi-17 helicopters.

Nine senators and 23 members of the House of Representatives in a letter said they have "great concern" about allegations of possible criminal activity related to the Mi-17 program. They urged Holder "to utilize all available resources, including the Federal Bureau of Investigation" to support the Pentagon's investigation.

Reuters reported on August 29 that investigators from the Pentagon's Defense Criminal Investigative Service are examining potentially improper payments by the Army's Non-Standard Rotary Wing Aircraft unit to two Russian-owned subcontractors, Avia Baltika and St. Petersburg Aircraft Repair Co, or SPARC.

Investigators are also examining possible personal connections between members of the Army unit and the contractors, said the sources, speaking on condition of anonymity.

No charges have been filed.

Justice Department spokesman Michael Passman said in an email, "We have received the letter, and we are reviewing it."

Senator John Cornyn, a Texas Republican, released the letter.

The Army's NSRWA unit was led from its inception by Colonel Norbert E. Vergez, who retired in November 2012 and now works as a senior vice president at Patriarch Partners, an $8 billion New York-based private equity firm run by financier Lynn Tilton. Patriarch owns MD Helicopters, a military and civilian helicopter-maker based in Mesa, Arizona.

The New York Times reported that the Justice Department's civil division requested information related to Patriarch's hiring of Vergez.

David Goldin, a spokesman for Patriarch, did not immediately respond to requests for comment. Previously, Goldin said the private equity firm had not been informed of the criminal investigation, but was aware of a Justice Department civil inquiry concerning Vergez.

The maintenance deals under investigation are part of a broader Defense Department program that is buying and overhauling Russian-made Mi-17 helicopters for use by Afghanistan. The aircraft are being bought by the Pentagon from a Russian manufacturer through Russia's powerful state-owned arms dealer, Rosoboronexport, which is not a focus of the criminal probe.

The Pentagon has touted the program - budgeted at approximately $1.1 billion for acquisition of the latest set of helicopters - as the quickest way to beef up the Afghan Air Force's special mission wing before U.S. troops withdraw next year.

But lawmakers in both houses of Congress have demanded the Pentagon halt its dealings with Rosoboronexport, in part because the Russian firm supplies weapons to the government of Syrian President Bashar al-Assad, blamed by Washington for using chemical weapons that killed more than 1,400 people in the country's civil war.

"The prospect that American taxpayers have been made into unwitting victims of corruption demands special scrutiny," Cornyn said in a statement.

Rosoboronexport did not respond to a prior request for comment. Yuri Borisov, and his son, Pavel, owners of Avia Baltika and SPARC, did not respond to prior requests for comment.

(Additional reporting by David Ingram; Editing by Vicki Allen)