Your Military Industrial Complex at Work

Did the U.S. Army Arrange a 'Sweetheart' Deal to Sell Russian Helicopters to Iraq?

By Sharon Weinberger July 25, 2008 | 8:00:00 AM The Defense Department quietly gave a U.S. company a contract to provide 22 new Russian-made Mi-17 troop transport helicopters to the Iraqi military in a deal worth an eyebrow-raising $325 million, DANGER ROOM has learned.

Iraq's effort to re-equip its military has been marred with corruption, including a notorious plan to buy used Mi-17s from Poland in a deal that involved accusations of shoddy equipment and was eventually scrapped. This new Mi-17 contract, which involves Iraqi money routed through the Pentagon's foreign military sales process, was designed to avoid problems that occurred in the previous sale. But in an unusual move, the U.S. Army sole sourced the contract to ARINC, a Carlyle Group-owned company.

The deal, which was consummated earlier this year, may represent the highest price ever paid for the Russian-produced helicopters, which are sold by a number of brokers, as well as directly from the manufacturers in Russia.

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