Pentagon Overpaying for Weapons from Russian State-Owned Arms Dealer

Washington, D.C. – New documents obtained by Human Rights First suggest that American taxpayers have been paying a sharply increased price for the Russian helicopters that the United States is has purchased for Afghanistan. The Pentagon awarded a no-bid contract for the helicopters to the same Russian arms dealer that is now supplying Syria’s Bashar al Assad with the weapons that are being used to kill civilians.

The state-owned arms dealer Rosoboronexport is part of a defense-industrial conglomerate run by an intimate friend of Vladimir Putin. Its defense contracts are “an important trough at which senior officials feed,” according to a 2007 State Department cable published by Wikileaks. Nevertheless, the Department of Defense (DoD) awarded Rosoboronexport a no-bid contract for the helicopters in 2010 and has insisted that no other foreign or domestic manufacturer can produce a competitive aircraft for the “hot and high” Afghan terrain.

The new documents, obtained from two separate aviation industry sources, indicate that the price charged by the Russian factory for the Mi-171 helicopter has nearly quadrupled, from $4.4 million in 2008 to $17.5 million in 2012.

“The DoD decision to buy helicopters from Rosoboronexport in 2010 may have made sense at the time, but it doesn’t  make sense in 2013, when Rosoboronexport is selling weapons to the Assad forces that are used against Syrian civilians, threatening to go through with a deal to supply S-300 advanced air defense systems to Assad, and would appear to be overcharging the American taxpayer,” said Human Rights First’s Sonni Efron, author of the new blueprint, “How to Stop Doing Business With Russia’s Arms Exporter.”

Congress is considering a number of amendments to cut off all funding for the Rosoboronexport contract. Human Rights First urges the Pentagon to cancel the contract and find alternative ways to advance security for Afghan civilians without contributing to the problem of mass atrocities against Syrians. The role of third-party enablers in mass atrocities, including the Rosoboronexport role in supplying Assad, is documented in our report Enablers of the Syrian Conflict and on the website.

The industry documents appear to show that the United States is paying far more than most other countries for similar helicopters.  As was reported in today’s Wall Street Journal, a 2007 letter from the factory in Ulan-Ude, Russia, offered to sell three new Mi-171E helicopters for $8.55 million each. In 2009, the U.S. navy bought two Mi-171s for $10.5 million from a contractor called Defense Technology Inc. The following year, Argentina reportedly paid $12.7 million each for two Mi-171s. In 2011, the United States paid $13.6 million each for 14 Mi-171s destined for Iraq.  The price paid by the United States was 40% higher than four years earlier – an eye-opening markup given that bulk aircraft can usually be purchased at a lower price than small numbers.

The Russian price apparently jumped another 32% in a single year, when DoD bought 12 Mi-17 helicopters for Afghanistan for $18 million each. The Mi-17 V5 is equivalent to the M-171 and the cost is roughly the same, industry sources said.  A July 2013 Pentagon document indicates the Mi-17 choppers are now estimated to cost $19 million each, with annual maintenance costs of $4.8 million, for a total cumulative costs of $1.45 billion for 30 aircrafts over the 30-year lifespan of the helicopter.

The Pentagon has purchased 30 Mi-17 helicopters, a similar model, from Rosoboronexport, to replace Afghanistan’s aging air fleet and ensure it can conduct counter-narcotics and counter-terrorism operations after U.S. troops depart in 2014. But Rosoboronexport’s clientele has included Iran, North Korea, Sudan, Burma, Libya and Venezuela, and between 2007 and 2010 it also supplied at least $4.7 billion in weapons to Syrian President Bashar al-Assad.  As the death toll in Syria approaches 100,000 and amid evidence that these Russian weapons have been used to kill Syrian civilians, Congress cut off 2013 funding for the helicopter purchase.  The Pentagon then used 2012 funding to buy more of the Russian helicopters.

“The U.S. government is now in the bizarre position of buying helicopters from Putin’s favorite arms dealer, who is supplying Assad, while at the same time supplying the Syrian rebels with aid and now weapons to fight Assad,” she added.


Published on July 30, 2013


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