Setting the Record Straight, Again, on the NDN and the Karimovs
Last week, Harry Eustace Jr., the head of FMN Logistics, got in touch with me to "set the record straight" about claims that his company was closely tied to Zeromax, which is in turn thought to be closely connected to Gulnara Karimova, the daughter of Uzbekistan's president Islam Karimov. Eustace said his company had only the slimmest connection to Zeromax. But after the post was published, someone with access to some of Eustace's emails got in touch, claiming that Eustace was not telling the entire truth about FMN's relationship with Zeromax.
But before we get into the gory details of that, it may be a good idea to step back a bit and think again about why we care about this. The Northern Distribution Network, of which FMN Logistics is a key operator, has the potential to put the U.S. military in business with a variety of shady entities in Uzbekistan. It's hard to get solid information about Uzbekistan, but there are good reasons to believe that much business in the country, including the transportation business, is controlled by government officials who line their pockets with the revenues. This is part of the apparatus of repression in Uzbekistan, and it would be unsavory for the U.S. military to be involved in it.
FMN Logistics has been the focus of people looking into this question because it at one point openly advertised its connections to Zeromax, by writing in early sales presentations that “FMN Logistics is the U.S. small business contracting arm of Zeromax.” Eustace last week told me that the only connection FMN had with Zeromax was an agreement with a subsidiary to use its rail code. The emails I got suggest more extensive cooperation.
One email from June, 2009, refers to a meeting with Harry Eustace Sr. (the head of the American-Uzbekistan Chamber of Commerce and a co-owner of FMN Logistics) and Miradil Djalalov, the managing director of Zeromax:
One of the agreements that came out of my father’s last meeting with Miradil was that FMN-Nobis would have exclusive rights to use the following Zeromax subsidiary as its own… Please start marketing this accordingly to all of your potential clients using the FMN name.
In another, from August 2009, he discussed working as a fuel supplier with Zeromax subsidiary UzGazOil:
I went over to Zeromax (UzGazOil) today and spoke with them about them solicitations as a possible alternative to Brookdale. They had already been approached by an Afghan group by the name of Barakat. They agreed to tell them that they already have another partner for these solicitations but won’t say who.
In another, from the same month, he refers to cooperation with Muzimpex, another Zeromax subsidiary, and asks another partner to confirm that:
Muzimpex/Zeromax are ready and willing to accept additional employees from Karshi (former KBR) to work as core personnel for TWI with direct employment under Muzimpex pending background checks and conflicts checks, approvals.
A couple more suggest that Eustace has a sense of humor about his relationship with Zeromax. In one, he forwarded a story from the ESPN website about the soccer club Bunyodkor, which was linked to Zeromax. Eustace's only comment was "Here is our fuel partner." He also forwarded on an email sent to him by a friend with the subject "A friend of yours," linking to a piece from Foreign Policy on Gulnara Karimova, which was part of a series called "The World's Worst Daughters."
I got in touch again with Eustace Jr. and he did not deny the contents of the emails, but speculated that they were likely sent to me by someone with whom he had bad business dealings who was now trying to make him look bad. He said that all of the agreements discussed in the emails were only preliminary, and that nothing ultimately came of them:
"Verbal agreements between my father and Miradil at the time came to nothing. There were a lot of handshakes and great ideas and good will, but nothing ever came of it."
He said FMN Logistics has never sent any fuel to Afghanistan, with UzGazOil or anyone else, and never ended up using the Muzimpex warehouse -- but didn't rule out doing so in the future: "We have nothing going on with Muzimpex now but if the opportunity presented itself we would probably like to."
When he originally told me that the only dealings FMN Logistics had with Zeromax were on the rail code, he said "I had just clean forgotten that we had all these other ideas that we were floating around."
To take a step back again: FMN Logistics is really a small fraction of the NDN business, and they are getting bad publicity in part because they so openly bragged about their connections with Zeromax in the past. And as far as I know, Eustace Jr. is correct in saying that there are no current dealings with Zeromax (all the emails I got were from last year). But we know even less about the other companies involved in the NDN. As Marc David Miller, head of the Kyrgyz-North America Trade Council, said at a recent forum on business in Central Asia: "Maersk is more difficult to get information out of than Turkmenistan." We do know a little about some of the NDN companies' operations in Uzbekistan, thanks to colleague Deirdre Tynan's investigations, and there are plenty of implications of shadiness from a lot of them, not just FMN.
One of the recent WikiLeaks cables cited by The Guardian (but unfortunately not yet released in full) referred to Karimov pressuring the U.S. on the NDN:
They detail how the dictatorial president recently flew into a rage because the US secretary of state, Hillary Clinton, presented a Women of Courage award in Washington to a newly released Uzbek human rights campaigner, Mutabar Tadjibayeva.
Karimov's displeasure was conveyed in "icy tones", which alarmed the embassy: "We have a number of important issues on the table right now, including the Afghanistan transit (NDN) framework."
On 18 March 2009, the US ambassador, Richard Norland, submitted to a personal tongue-lashing from Karimov with an "implicit threat to suspend transit of cargo for US forces in Afghanistan via the Northern Distribution Network".
Norland claimed to have calmed Karimov down on that occasion, but warned Washington: "Clearly, pressuring him (especially publicly) could cost us transit."
That's as a result of pressuring Karimov on human rights, which in the end doesn't cost him anything. What if the U.S. were to insist on shipping its military equipment through Uzbekistan in a transparent, noncorrupt way? So that none of his family members or allies could get paid from it? Anyone doubt that would get Karimov's attention a lot faster?
Joshua Kucera is the Turkey/Caucasus editor at Eurasianet, and author of The Bug Pit.
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