US CONSORTIUM'S $22M PROPOSED DEAL WITH REPUBLIC OF GEORGIA COLLAPSES

GEORGIA CITES LACK OF FUNDING DESPITE MASSIVE US AID
By Steven L. Waterman

After more than 12 months of negotiations with high-ranking Georgian defense officials, an international consortium led by a private US security organization has withdrawn from a 3-year, $22m proposal that would have dramatically enhanced long-term security and stability in the former Soviet republic, including implementation of tight security along the Georgian segment of the so-called Trans-Caucasus pipeline.

The Baku-Tbilisi-Ceyhan Pipeline Agreement was signed in Turkey last November with the full support of the United States and witnessed by President Clinton. The agreement is intended to transport large, newly- discovered Caspian Sea crude oil reserves to the West via Azerbaijan, Georgia and Turkey.

In October 1999 the US-led consortium Praesidium High Risk Specialties began discussions with senior Georgian defense and security officials concerning provision of various high-end security services to elevate Georgia's special forces capability to NATO standards as well as secure the Georgian stretch of the pipeline.

"Qualified high-security is an essential component of successful pipeline operation, critically so in the Caucasus region," observes Praesidium's senior strategy analyst, Peter Martin. "There's no shortage of opposition that will be looking to make sabotage of the Baku-Ceyhan pipeline a fairly regular occurrence. It will almost certainly become a target for terrorist activity."

The project was reportedly approved by Georgian President Eduard Shevardnadze, Georgian Minister of Defence Lt.Gen. David Tevzadze and the Georgian Parliament's Committee on Defence and Security.

Praesidium HRS was to provide training and assistance expertise with a large cadre of ex-US Navy SEALs and US Special Forces personnel partnered with a smaller contingent of British SAS commandos and Danish frogmen.

During a June meeting in London, a Georgian defense official informed the Praesidium representatives that the project would be financed.

But the deal finally collapsed when the consortium was forced to withdraw its offer in September following Georgian assertions that they could not afford to implement the project, despite receiving tens of millions of dollars in annual military aid from US taxpayers.

Representatives say Praesidium became weary of Georgia's sparse communications and "non-responsive" conduct regarding the proposal and intended to withdraw in the early part of 2000, but Tbilisi requested a continuation of the contacts. The consortium reluctantly continued its involvement, even going so far as offering to assist in locating investors, but received only further communication lapses and unexplained delays from Tbilisi.

"It certainly appears that Georgia is more interested in acquiring American tax dollars than taking some responsibility for its own security," says Loren Gautier, a spokesperson for the consortium. "Congress has been blindly granting millions to Georgia, but the indications are that American companies stand to gain very little in return for their tax-financed aid."

To make matters worse, says Gautier, the Chairman of the US Joint Chiefs of Staff, Gen. Henry Shelton, recently promised more aid, including "financial assistance" to retired Georgian military veterans.

"In light of this situation, that is simply a slap in the face to the American veteran community, and an affront to the American taxpayer," chides Gautier. "General Shelton made that promise only one day before our withdrawal. We offered employment opportunities to former Georgian military personnel, but US Government welfare at the expense of American veterans is apparently far more attractive."

Gautier says Georgia is riddled with corruption and has lacked sufficient accountability measures to appropriately manage the US and foreign aid it receives.

A Japanese benefactor recently granted Georgia almost $1m to help perform a national census.

"That money just disappeared and Tbilisi acknowledges that they can not account for it," Gautier claims. "The circumstances in Georgia that regularly lead to vanishing sums of foreign aid have not left US financial assistance untouched. Our tax dollars, too, find their way into the pockets of corrupt Georgian officials."

In July, Georgian President Shevardnadze ordered a nationwide "anti-corruption" campaign to be led by the Georgian Supreme Court.

"We'll see if that is a paradigm or just the usual window dressing," says Gautier. "Regardless, we have lost a substantial, potentially long-term business opportunity of significant income importance to American veterans. The pipeline is an issue of national security, but so are the livelihoods of our veterans and their families."

In President Clinton's "A National Security Strategy For A New Century", released by the White House in January 2000, the Trans-Caucasus pipeline project was identified as being of significant interest to US national security and US businesses:

"We are focusing particular attention on investment in Caspian energy resources and their export from the Caucasus region to world markets, thereby expanding and diversifying world energy supplies and promoting prosperity in the region. A stable and prosperous Caucasus and Central Asia will facilitate rapid development and transport to international markets of the large Caspian oil and gas resources, with substantial U.S. commercial participation...

...We believe that the Baku-Tbilisi-Ceyhan pipeline and the trans-Caspian gas pipeline are commercially viable. The Export-Import Bank and OPIC stand ready to provide the necessary financing and insurance on a commercial basis to help bring these projects to fruition...

...Development of Caspian energy resources will improve our energy security, as well as that of Turkey and other allies. It will create commercial opportunities for U.S. companies and other companies around the world. The Baku-Tbilisi-Ceyhan pipeline is also the most environmentally sound approach to transporting oil resources from the Caspian region to world markets."

Despite those declarations by the President, Ex-Im Bank's representative at the Caspian Finance Center in Ankara failed to respond to an inquiry from a Praesidium HRS representative.

Subsequent efforts by the consortium to salvage the project met with a similar lack of response from several US senators, including Sen. Connie Mack (R-Florida) who represents the state where the consortium is based; Sen. Sam Brownback (R-Kansas) who has had extensive dealings with Georgia and sponsored the "Silk Road Strategy Act"; and Sen. Arlen Specter (R-Pennsylvania) who chairs the Senate Veterans Affairs Committee.

Aides to Senators Mack and Brownback claimed no knowledge of the project, despite having received internal Praesidium documents in September.

"We can't say whether Congress is asleep at the wheel or simply more concerned with their own election campaigns," Gautier says. "It amounts to the same thing: hard-working American veterans and their tax dollars are being taken for granted in favor of foreign veterans."

On a personal level, Praesidium analyst Peter Martin agrees, "Congress still hasn't learned who it works for. They need to realize that our incomes are not just another government entitlement program for Washington politicians and foreign nations."

Gautier concludes: "American veterans have selflessly provided this country's security for more than 200-years. The government continues to demonstrate little appreciation of that beyond patriotic words uttered at photo ops, campaign rallies and memorial services. Talk is cheap."

Meanwhile, representatives of major oil companies joined members of the Georgian Parliament in Ankara last week for a "festive" signing ceremony on the construction of the Baku-Tbilisi-Ceyhan pipeline. President Clinton reportedly applauded the occasion.

Steven L. Waterman is a freelance writer from Maine.

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