God Save the Shah

American Guns, Spies and Oil in Azerbaijan

[see: http://www.diacritica.com/sobaka/2003/shah.html ]

by Mark Irkali, Tengiz Kodrarian and Cali Ruchala

May 22, 2003

"We move from dream to reality!"

Amid the polite applause that one might expect from an audience of
diplomats, a member of the audience coughed loudly. His harsh, gasping
rasp was embarrassingly on cue. He covered his mouth with a balled-
up fist.

The speaker - Azeri president Heydar Aliyev, whose appearance
dispelled yet another rumor circulating through Baku and Tbilisi that
he was dead - continued without acknowledging it.

The speech was broadcast live on television - such is the importance
of a new pipeline in the Caucasus.

The Baku-Tbilisi-Ceyhan Pipeline (or BTC, as insiders call it) did
indeed begin as a dream during the early 1990s, and the Americans
considered its approval their top priority in the whole of the region.
The idea was to get the massive deposit of oil beneath the Caspian Sea
to market without having to rely on the goodwill of either Russia or
Iran, the two regional heavyweights. Today, more than ten years later,
construction is finally underway.

The next speaker also underlined the importance of the BTC to America.
US Energy Secretary Spencer Abraham - rewarded for losing his seat in
the Senate with a cushy cabinet appointment - took the podium and read
a statement from President George W. Bush.

It was a typical snowjob, though the prestige of an American president
gracing the Caucasus region, even if by proxy, forced the man with the
raspy cough to bite down hard on his knuckles. Bush intoned via
Abraham that building the snaking pipeline from the Azeri capital of
Baku to the Turkish Mediterranean port of Ceyhan would have a number
of astonishing effects, including "enhancing global energy security"
and "strengthening the sovereignty and independence of countries in
the Caspian Basin."



AMERICAN OIL DRIVE

DEPENDING ON WHO you talk to, the BTC is either the reason for the
extensive American involvement in the Caucasus, which began in the
1990s and has been slammed into overdrive since 9/11, or simply a
pretext for increasing American military presence in the
geopolitically important southern extremities of the former Soviet
Union. Two things are beyond dispute: America has, for the moment at
least, wrested control of most of the independent states of the
Caucasus from Russia's sphere of influence, and there are now American
military forces on the ground.

The latter is something that Georgia and Azerbaijan have long desired
as the easiest way to acquire western military hardware and training,
but not to protect them from Russia. The weapons and know-how will
almost certainly be used first to subdue several ethnic statelets
which broke away in the early part of the 1990s: Abkhazia, South
Ossetia and, from Azerbaijan, Karabakh.

When completed in 2005, Baku-Tbilisi-Ceyhan will cross more than 1,000
miles of territory. Construction will cost around two and half billion
dollars, give or take a few hundred million. Skeptics scoffed - and
continue to scoff - at the project; one contacted for this story
called it "the most expensive playground ever built," and disputed
that there would ever be enough demand to justify such an expenditure.

But the cost cannot just be measured in dollars and lari. American
influence in the Caucasus has been a painful, often sordid affair.
Back in the 1970s, the American government invited dissidents to
dinner to show their support for human rights in the USSR. In the
1990s, two men feted for their courage on such occasions were
overthrown by dinosaurs from the Communist Party who, in Soviet times,
had been their chief persecutors. American support has flowed to the
former apparatchiks as these two former disciples of Leonid Brezhnev
unleashed a column of fire on their own people, guided by American
advisors, their positions buffeted by American aid.

And it can only get worse. The Caucasus has become the new Central
America: a place crawling with CIA agents and other shady characters
dispatched to back two of the most repressive, unstable regimes in the
former Communist Bloc.

Over the last twelve years, Israel is the only country in the world
which has received substantially more aid than Georgia. The CIA
trained President Eduard Shevarnadze's security detail, while jails
and cemeteries filled with his opponents. In the Spring of 2002,
America took the plunge and dispatched a contingent of Special Forces
to train-and-equip the Georgian army in "anti-terrorist" operations,
using the pretext that al-Qaeda fighters had been spotted in the
country (their existence was disputed at a Washington press conference
by no less an authority than the Georgian Defense Minister, obviously
a man not in on the plan).

American support for Shevardnadze in Georgia, guardian the vulnerable
central link of the BTC, has at least been public. The same cannot be
said for the efforts of America in Azerbaijan. In the early 1990s,
with a war in the breakaway province of Karabakh, the country seemed
to be on the verge of disintegration. The first independent government
was headed by Soviet fossils; the primary apparatchik was Ayaz
Mutalibov, noted as the only head of a Soviet republic to welcome the
hardline coup against Mikhail Gorbachev.

With the army battered by the Armenians of Karabakh, and the
government criticized by an increasingly hostile public, the Azeri
president turned to the few Americans in his country for help. Three
men with backgrounds out of a spy novel lent him their services. Over
the course of the next two years, the company they founded procured
thousands of dollars worth of weapons and recruited at least two
thousand Afghan mercenaries for Azerbaijan - the first mujahedin to
fight on the territory of the former Communist Bloc.

And they did it under the guise of an oil company.

This story is the culmination of more than a year of investigation and
dozens of interviews in Georgia, Azerbaijan and Pakistan, as well as
the United States. It's a story about money, oil, weapons and the
lengths that some men will go to control the "new energy sources" that
American politicians have so often called for. Whether they were
working for themselves or for their country, the men behind the energy
company with the Orwellian name - MEGA Oil - wrecked havoc in the
Caucasus, pursuing goals which were remarkably in tune with America's
primary aim in the region.

We will state up-front that we have discovered no documentary evidence
to tie MEGA Oil, as an entity, definitively to the United States
government. There is however considerable evidence that all three
prime movers in the company - former Iran-Contra conspirator Richard
Secord, legendary Air Force special operations commander Harry
"Heinie" Aderholt, and the man known as either a diabolical con-man or
a misunderstood patriot, Gary Best - were in the past involved in some
of the most infamous activities of in the history of the CIA.

In fact, the MEGA Oil debacle followed the model of the Iran-Contra
Affair with uncanny accuracy, down to the formation of shell companies
and, possibly, the use of private sector companies to contravene both
the letter and the intent of American law. Together with Oliver North,
Secord had pioneered this model in the 1980s to fund the Nicaraguan
Contras and make themselves millionaires in the bargain. By a
remarkable coincidence or a cunning design, the MEGA Oil enterprise
would have served the same purpose.

How much of it can be assigned to coincidence and how much to design
is left to the reader to decide.

As in the Middle East, the most bitter conflict in the Caucasus was
not fought over oil, but rather over the single bit of territory in
the region which is comparatively bereft of it.


The Karabakh War was an ethnic war, in some ways corresponding to the
fighting in the Balkans, in other ways at odds with it. About 20
percent of Azerbaijan's territory is presently - and probably
permanently - occupied by Armenian forces. The fighting in the first
years of the post-Soviet era was centered in the "Mountainous Black
Garden" - Nagorno-Karabakh - but the Armenians presently control
considerable territory outside the enclave as well.

This conflict must form the backbone of any narrative of Azerbaijan's
lost decade, as mounting military debacles and successive tidal waves
of terrified refugees washing through the cities spurred on popular
revolts and undermined two presidents, further plunging the republic
into economic catastrophe.

The post-Communist years will be known as the darkest years in
Azerbaijan's history. In the 1990s, one in every seven Azeris became a
war refugee. And yet, incredibly, the 1990s have been characterized by
some people in the West as an Azerbaijani Golden Age. Citing the
enormous untapped oil reserves discovered in the twilight of the
Soviet Union, these individuals gloried in the bright future of
Azerbaijan and produced impressive charts showing how much money
American industries were already pouring into the country in
preparation for the great oil rush.

Their numbers are not many, and the Americans who trumpet the "Baku
Boom" and the Azerbaijani Golden Age are among the few who can speak
(or do speak, regardless of ability) about Azerbaijan. Among them are
familiar faces from the American political establishment, such as
James Baker and John Sununu, both of whom have been employed as
lobbyists by the Azerbaijani government or various energy companies
favourable to improved relations between Azerbaijan and
America. Unfortunately (and predictably, to long term observers of the
Middle East), little of the money which has come to Azerbaijan has
trickled down to the poor.

The oil rush of the 1990s was not the first that Azerbaijan has seen.
The first came in 1870 and attracted the cosmopolitan crowd of
investors, hucksters and fanatics that seem drawn by the heavy waft of
crude. By the turn of the century, Azerbaijan's oil exports exceeded
those of the entire United States.

The oil industry in Azerbaijan fell into decline during the Soviet
years, for reasons which parallel the American experience: it was
cheaper to bring oil to market from the fertile Siberian fields than
to dilly with a thousand small deposits in the Caucasus. The landscape
of Azerbaijan is littered with the red and black piping of abandoned
wells last tapped back in the 1960s.

In 1991, when the immense size of the Caspian oil shelf became known,
the derelict wells seemed even more antiquated, compared to the glossy
pictures of offshore platforms in the briefcases of chubby Texans in
the two Intourist Hotels that bookended Baku's Lenin Square. But to a
group of American investors with a background out of a spy novel,
these scraps of industrial decay smelled like an opportunity - or a
suitable pretext, depending on who you believe. And this is when our
story begins.



THE P.O.W. CAPER

GARY BEST HAS made it his business not to be found. A self-described
"electronics importer," he has left a long trail of anecdote and
innuendo of past misdeeds but few testifying witnesses. He was a
marginal figure in one of the many subplots of the Iran-Contra
Scandal, though how exactly he was related to the activities of Oliver
North and his co-conspirators is unclear. His importing business was
concentrated primarily in Southeast Asia, but somehow brought him into
contact with the Afghan Mujahedin, Iran-Contra conspirator Richard
Secord and legendary Air Force special operations commander Brigadier
General Harry "Heinie" Aderholt. His current mailing address, and his
current profession, are unknown.

In 1985, Gary's business was headquartered in Marietta, Georgia. What
exactly his company did, and how he spent his days, is a mystery. Bob
Fletcher, another figure on the periphery of Iran-Contra, claims that
in 1985, Gary Best became a partner in his toy company, which he and
other Iran-Contra figures planned to use as a cover for illicit
weapons transfers of the sort that made Ollie (and Secord)
famous. There's been no convincing evidence that this is true, and
Fletcher has since built an inspiring career as a first-class
conspiracy kook. He later became a spokesman for the Militia of
Montana, fondly remembered by law enforcement for issuing liens on
strangers' property, the glare from their giant belt buckles and their
tense stand-offs with federal marshals.

But for his other activities in the late 1980s, Gary Best might be
considered somewhat less credible than a run-of-the-mill crank
babbling about weather control technology. Knowing people in his
business in Southeast Asia (whatever it was), and with his connections
to the not-yet-victorious Mujahedin in Afghanistan (however he got to
know them), Best was in an advantageous position to capitalize on one
of the great popular delusions of 1980s America: the search for
missing American prisoners of war in Vietnam.

Though the evidence in favour consisted solely of the plotline in the
movie Rambo, many veterans and their widows hoped that the
liberalization taking place in the USSR under Gorbachev would lead to
the release of some of America's lost POWs. Their hopes were cruelly
bolstered when Stephen Morris, a right-wing Australian academic,
claimed to have found a document in the KGB archives in Moscow which
referred to "thousands" of imprisoned American POWs, rather than the
hundreds the North Vietnamese claimed to be holding during the Paris
Peace Talks. It came at an inopportune time, delaying America's
long-awaited normalization with Vietnam for several months before the
document was exposed as a forgery.

Meanwhile, "Russia's Vietnam" - the Afghan War - was just winding down
(the last Red Army tanks crossed the northern frontier of Afghanistan
only in 1989). Russian widows, wives and mothers of servicemen who had
not returned with their battered units also harboured hopes of
securing their loved ones' release. The two superpowers - America and
the USSR - were stymied in getting any answers from their former
adversaries, but both had relatively good relations with the other
country's enemies.

Gary Best was better placed than most to bring America and the USSR
together over this issue, trading his contacts with the Mujahedin for
his Soviet counterparts' connections in Vietnam. Should any Americans
turn out alive, Best would be able to have them immediately
transferred to a hospital in Thailand, where his associates would look
after them as they began the long journey home.

Best left few traces of his involvement in this caper, though
associates would later give him credit for securing the release of
several Russian POWs held in Afghanistan. He allegedly made several
visits to the USSR as well as to Mujahedin headquarters in Afghanistan
and Pakistan, and former associates say that Best bragged about his
friendship with sometime-Afghan Prime Minister Gulbuddin Hekmatyar
who, like many former Mujahedin, is now a sworn enemy of the United
States. At the time of writing, Hekmatyar had just been placed on a
terrorist list by the State Department, and a staffer contacted at his
movement's headquarters in Pakistan was understandably reluctant to
discuss too many things with outsiders that spoke English. A week
later, the staffer, who claimed to be Hekmatyar's son-in-law, told us
that no one in the organization had ever heard of Gary Best, and that
they were unaware of any endeavors by Americans to assist in locating
Soviet POWs, or securing their release.



THE GENERAL'S JOINT VENTURE

BEST CONVINCED AT least one important ally of the sincerity of his
intentions. Brigadier General Heinie Aderholt isn't just a guy with a
lot of brass on his chest. Among special forces veterans and aspiring
students who read up on his career in Air Force-issue textbooks,
Heinie is a legend. He was in charge of dropping anti-Communist
guerrillas behind enemy lines in the Korean War, and conducted
interdiction campaigns to stem the flow of supplies to the Viet
Cong. Among active duty and retired servicemen, Aderholt is only a peg
or two down from Patton, McArthur and other Gods of War in 20th
century American military history.

Aderholt also claimed to have bought into the possibility that
American POWs were still being held in Vietnam. Former associates say
that Best used Aderholt's prestige to add credibility to his
crusade. But Best's expensive trips around the world didn't pay for
themselves. It wasn't long before Best approached Aderholt with a
proposal which would give a shot in the arm and an infusion of cash
into the search for American and Soviet POWs and, possibly, make both
of them millionaires in the bargain.

While traveling in the Soviet Union, Best had noticed the thousands of
rusting cages over abandoned oil wells, concentrated heavily in
Azerbaijan. He figured that capital costs to rehabilitate them
wouldn't be prohibitively expensive provided just a fraction of the
wells could be brought back into operation. Best boasted of his
connections with the Azeri government - a collection of scarcely
reformed apparatchiks wrestling with the popular revolts and waves of
repression which marked the death spasms of the Soviet Union. Aderholt
wouldn't have to do a thing except pitch the idea to investors: Best
would take care of everything in Azerbaijan when, of course, he wasn't
flying around the world, looking for skeletons long since turned to
phosphor in the humidity of the Vietnamese jungle brush.

Despite the unconventionality of the idea - forming a business to fund
what most would consider humanitarian work, when they didn't consider
it an outright swindle - Aderholt agreed. And that's when things
really started getting weird.



THE DREGS OF THE OIL RUSH

GARY BEST WAS but one of a horde of con-men and ruthless operators who
made the frightful voyage to Baku on Azerbaijan's state airline, which
began the 1990s with quite possibly the oldest and most ill-equipped
fleet of airplanes in the world. Among the figures of ill-repute to
make their way south was none other than Marc Rich, acclaimed
scoundrel who slid a few million greenbacks into the Iranian
government's pocket while its student-athletes were jogging
blindfolded American Embassy staff through the streets of
Teheran. Rich was then still barricaded in his palatial estate in
Switzerland; it would be another ten years before his ex-wife would
emerge from bribing her way through nine rings of lackeys in the
Clinton Administration to buy her husband a pardon from the
commander-in-chief.

But Best drew first blood, ingratiating himself among the brahmins of
the Azeri Communist Party when agents from the big oil companies were
still trying get a foot in the door. A former Best associate named
"Andrew," who describes himself as a "hazmat broker" - he deals only
in those commodities which are toxic, flammable or explosive - sat
down with us in a Tbilisi restaurant in February 2003 to describe how
Best was able to do it.

"Gary is one of the most charismatic people I've ever known," he says.
"Not physically. He just looks like he's always on the verge of doing
something important and great. If you know him long enough, you stop
and say, 'Well, have any of these plans ever worked out? No, so ta!'
But to those who just meet him, Gary Best looks like a legitimate
player."

Andrew didn't know who Heinie Aderholt was, but "Gary rubbed shoulders
with a lot of important people. You would never guess that every word
out of his mouth was a crock of shit. The secret of Gary Best's
success is that he disappears and reinvents himself all the time. He
has to, because he's always running away from people who are really
pissed off at him over one of his plans."

According to Andrew, Best has a warrant out for his arrest in the
United States and is probably traveling under a false passport (Best
has had at least one default judgment against him in a lawsuit - he
never showed up to contest the charges - but he is not the subject of
any federal warrant we could identify.) Like many people who have
dealt with Gary Best, Andrew is convinced that he's a CIA agent, or at
least a former one who retained some contacts in the intelligence
community. He doesn't think Best's work in Azerbaijan was part of an
official operation, "but with the crowd he had around him, who knows?"

The "crowd" expanded in 1991 to include another ghost from America's
past: prominent Iran-Contra co-conspirator Richard Secord. Whereas the
partnership of Best and Aderholt could be written off as a curious
pairing, the presence of Secord in Best's Azerbaijani oil venture
ought to have raised blood red flags around the world.

Secord is a man that many people believe should have been in jail in
1991 - just two years after copping a plea to a count of lying to
Congress (he was facing trial on eleven other felony charges).
Instead, we are to believe that this former mastermind of arms
shipments and shady deals with guerrillas and Ayatollahs was taken by
the possibilities of dead oil wells in Azerbaijan.

Best, Aderholt and Secord, with their lack of background in public
relations, might be forgiven for picking such an Orwellian name for
their venture as "MEGA Oil." Assuming that Aderholt and Secord were,
as they say they are, accidental patsies in Best's devious schemes,
it's still difficult to believe the atrocious due diligence that two
men with extensive backgrounds in intelligence executed. Conducting a
post- mortem on MEGA Oil - noting its birthdate and vital statistics -
is almost as difficult as tracking down Gary Best.

MEGA Oil's American partners wrote in press releases that the company
was based in either Marietta or Atlanta, Georgia. A search of public
records finds not one but two companies known as "MEGA Oil USA." One
is called "MEGA Oil USA/Vista Joint Ventures," and was incorporated in
1985. "MEGA Oil USA" on the other hand wasn't incorporated until 1993.
There is, moreover, a third MEGA Oil involved in the food processing
business. None of these Georgia companies could be definitively traced
to Best.

To make up for MEGA Oil's lack of experience in the industry, Best
contracted a company which specialized in rehabilitating and servicing
existing oil wells. Ponder Industries, registered in Delaware but
conducting business in Alice, Texas, entered into partnership with
MEGA Oil in Azerbaijan feeling like they had trumped an entire
industry. Later, an Securities and Exchange Commission panel
expressed astonishment that Ponder had done even less due diligence on
MEGA than they would have with any Texas partner - almost as little as
Aderholt and Secord. Gary Best, insiders say, led Ponder to believe
that his connections with the Azeri government would take care of any
problems. As a result, Ponder agreed to fund and staff the oil wells
in Azerbaijan by themselves, as well as providing unspecified
"operating costs" to MEGA. All MEGA had to do was bring them the
contract with SOCAR, the Azeri state oil company. Best promptly faxed
it over. It was written in Russian, and no one in Ponder's office
could read it. Incredibly, they took Best's word that the fax was
exactly what he said it was: a joint venture agreement between MEGA
Oil and SOCAR to service the abandoned oil wells.

Ponder began flying their equipment and staff into Azerbaijan in late
1991 and January of 1992. The latter was the date when the conflict in
Karabakh, which had hitherto been fought by guerrillas and militias,
exploded into a full-scale war as Azeri soldiers pounded the Karabakh
Armenians' "capital," Stepanakert, with thousands of rounds of
artillery fire. It was intended to soften the Armenians' position,
with thousands of fresh troops following the path of fire.

The hopes of the Azeris for a quick and decisive thrust into Karabakh
were bolstered when their American friends offered to help
train-and-equip their beleaguered armed forces, and even bring in some
of their old special forces friends to lend a hand in drilling and
structural reorganization. MEGA Oil, a company in Azerbaijan which was
created in order to fund a farcical search for POWs in Vietnam, was
now hiring mercenaries.

In an interview with Baku-based journalist Thomas Goltz, Heinie
Aderholt claimed that representatives of the Azeri administration of
Ayaz Mutalibov - the technocrat-in-chief in Baku - had asked him if he
could facilitate the hiring of a large contingent of Afghan Mujahedin
to fight in Karabakh.


Aderholt says he refused. But he went along with the plan, attributed
to Best, by which American special forces veterans would train the
hapless Azeri army then being pummeled by Karabakh Armenian
irregulars, while obtaining weapons for the Azeris through their own
channels.

Others say that this was the plan all along - and that the oil rig
rejuvenation program, the POW search and the contract with Ponder was
nothing but a smokescreen to cover up a covert train-and-equip program
conducted with the tacit approval of the United States government.
There is, in fact, a remarkable congruency between what Secord,
Aderholt and Best were doing in Azerbaijan, and the strategic aims of
the United States in the Caspian region.

The Americans' avowed priority in the Caucasus was to find a method to
deliver the crude from the Caspian oil shelf to market, avoiding both
Russia and Iran as middlemen. Since the oil would flow from
Azerbaijan, this strategic goal was quite at odds with the American
government's favouritism towards Armenia in the Karabakh War.

In fact, providing support of any kind to Azerbaijan was illegal.
Congress passed a law (Section 907 of the "Freedom Support Act")
effectively banning foreign aid - and, needless to say, all military
aid - to Azerbaijan. Thus America's top long-term interest in the
Caspian was threatened by the promises of Armenian-American
retribution at the polls - a very real threat considering Armenian
electoral power in the key state of California.

Those who allege that MEGA Oil at least began as a project approved by
Washington point to the involvement of Richard Secord, whose visit to
Azerbaijan in early 1992 came at MEGA's expense and coincided with the
company's negotiations with Mutalibov on building Azerbaijan's army.
Secord's only public comment on the matter to date was to state that
Mutalibov couldn't decide whether he wanted his American friends to
build an army or a Praetorian Guard to hold onto power.

At the heart of the Iran-Contra controversy, of course, was a
Congressional ban on aid to the Contras strikingly similar to Section
907, and Secord's primary role in that first scandal was as the head
of a private corporation which worked at the behest of Oliver North
for covert and illegal weapons procurement for the Nicaraguan Contras.

Many forget that Secord's involvement in the Iran-Contra Affair was
motivated to a large degree by personal profit. The special
investigator's report on Iran-Contra concluded that "one of Secord's
central purposes in establishing and carrying out the operations of
the enterprise was the accumulation of untaxed wealth in secret
overseas accounts... that [Secord] received at least $2 million from
his participation in the enterprise during 1985 and 1986, that he set
up secret accounts to conceal his untaxed income, and that he later
lied and encouraged others to lie to keep it concealed."



THE STING

JUST MONTHS FROM when the special investigator's report on Iran-Contra
was finally published, the final arrangements were being worked out
with Mutalibov on military procurement and training. The bulk of the
aid was diverted away from the Azeri army and into building up
Azerbaijan's interior ministry forces, serving solely at the behest of
the president.

But MEGA's support came too late for Mutalibov. In late February of
1992, the Karabakh Armenians launched a counter-attack which the
Azeris hadn't planned for. Large swaths of territory were
overrun. Within a week, popular demonstrations had forced Mutalibov to
resign.

By March, Ponder Industries had brought enough of their equipment and
personnel into the country to begin work on the oil wells.
Anti-Mutalibov demonstrations by the opposition Popular Front forced
them to delay, but their project leaders inside the country -
including a relative of Ponder's septuagenarian founder, Mack Ponder -
didn't seem especially upset when MEGA Oil's most prominent Azeri
supporter fled to Moscow. They received the green light from Best in
April, and began work immediately thereafter.

Mutalibov returned to Azerbaijan in an attempted coup, but lasted just
a single day. After a brief interregnum, Popular Front leader Abulfaz
Elchibey became Azerbaijan's new president. Elchibey was a former
dissident and he carried into office an almost mythical reputation for
honesty. Years before, after concluding a series of lectures at a
university in the Middle East, he shocked his hosts by refusing the
rather modest payment promised him. As a foreigner, he told them, he
couldn't accept money from a country whose people were so poor.

Industry analysts have difficulty reading the lines on a person who,
all other things being equal, is nothing if not his own man. In
corporate jargon, Elchibey was a wild card. In July of 1992, after
several months of ambiguous hints and rumors, the Azeri government
ordered Ponder to cease all operations. MEGA Oil, the government
stated, had no contract with the government oil company, SOCAR, to
undertake the work they were doing. When company representatives
unfolded copies of the joint venture agreement MEGA had signed with
SOCAR - the Russian text faxed to Ponder Headquarters in Alice, Texas
- the bureaucrats laughed. Not only was it a forgery, but it wasn't
even a forgery of the joint venture agreement it was purported to be.

Ponder had been billing MEGA for work done and for capital sums they
had given to MEGA agents in Azerbaijan - a total of $8 million in
invoices in scarcely three months. SEC papers show that Ponder's
accountants, exasperated by the blind faith their clients put in MEGA
Oil, attempted to track Best down during a whirlwind visit he made to
America in mid-1992, but were unable to obtain any documentation
confirming his verbal assurances.

After Ponder was ordered to stop drilling in July of 1992, the
company's corporate officers listed the sums spent in Azerbaijan as
capital expenditures - the type of accounting shenanigans that their
Texas energy big brother, Enron, would later make famous. SEC filings
in the investigation of Ponder underline the investigators' state of
disbelief that a company with so many years experience in the oil
business would take on such a risky venture based on so
little. (Ponder's officers made a settlement with the Feds, though the
company never recovered. Curiously, they also delayed seeking redress
in American courts against MEGA Oil for more than six months after
they learned the truth about MEGA's relationship with SOCAR. A few
years later Ponder filed for Chapter 11 bankruptcy. They merged with
another small energy company, N-Vision, in January of 2001.)

Heinie Aderholt parted ways with Best a month after Ponder was ordered
to cease operations by SOCAR. Richard Secord, he claims, went with him
(Secord and Aderholt have known each other for years, as both were
attached to Air Force intelligence, and later became neighbours in
Fort Walton, Florida, where a great many old fighter pilots go to
die). But though the company was finished in the oil industry - and by
now the POW crusade was completely forgotten - MEGA Oil still had some
business to conduct. Mutalibov had requested more than weapons and
training - he wanted real, live bodies to fight a war the Azeris were
losing, or to protect himself from a nation that hated him. Aderholt
says he refused to participate on the basis of principles which he
had, apparently, developed in the two or three years since the Cold
War ended. But when Elchibey's government posed the question, nobody
was left at MEGA Oil who would turn them down.



LAST GASP FOR KARABAKH

LIKE MANY AFGHANS, Abdullah only uses his first name. Thankfully,
there aren't very many people named "Abdullah" in Tbilisi's
underground to confuse him with.

Abdullah was 16 years old in 1986, when he fled his village along
Afghanistan's eastern border for Pakistani city of Peshawar. Tens of
thousands of other Afghan refugees live in Peshawar, and the city was
the nerve center for the American campaign of support for the
Mujahedin during the Afghan War.

Once crawling with intelligence agents dispensing thick stacks of
rupees and RPGs, in the 1990s the spooks left, but Peshawar continued
to be the world's greatest illegal arms bazaar and a recruiting ground
for Soldiers of God fighting in conflicts around the world.

Abdullah was selling fruit in his neighbour's stall in Peshawar when
he met a slender, bespectacled American who offered him two thousand
dollars to fight in Karabakh. Upon arriving in Azerbaijan, the agent,
Abdullah found out, worked for Gary Best.

In September of 1992, Azerbaijan's new Popular Front officials in the
Defense Ministry called up thousands of young Azeris for military
service. The army's aging officer corps was not entirely pleased. The
Armenians had by now drilled themselves into the Karabakh hills like
ticks, and the top brass reiterated that throwing untrainted
conscripts at their positions en masse would be suicide (after all, it
hadn't worked up until now). Once again they pressed the ministry to
outfit and train a crack cadre of special forces that wouldn't bristle
at the Armenian advantage.

Best's mysterious international connections once again worked to his
advantage. Abdullah was one of an estimated 2,000 Afghan mercenaries
hired by MEGA Oil to wear Azeri uniforms and face the Armenians head
on. (The Afghans were split between separate parts of the country;
Abdullah himself claims to have trained with 200 of his fellow
countrymen.)

It's difficult to house a few thousand foreign soldiers and keep it
quiet, especially in a country as small as Azerbaijan. Abdullah tells
us that he and his compatriots were never permitted to leave the
base. As the recruits' identity papers had been confiscated upon their
arrival in the country, they had no doubt that any attempt to desert
would result in their arrest as illegal migrants - their American
handlers had several times threatened to do just that in disciplinary
proceedings. In spite of his precautions, Gary Best's Afghan
enterprise was soon common knowledge all over the Caucasus, even in
Armenia and Karabakh, though no one had yet collected enough evidence
to substantiate it.

MEGA Oil's Karabakh adventure was the first time that Afghans fought
inside the boundaries of the former Soviet Union. In later years, they
would flock to Tajikistan and Chechnya in aid of embattled Muslim
rebels, hijacking what were more or less independence struggles for
their own war to further the reach of fundamentalist Islam. Importing
hardcore Mujahedin could have been disastrous for Azerbaijan as well.
For a variety of reasons, it wasn't.

Elchibey's government wanted experienced soldiers - the mujahids who
have put the fear of a fire-breathing Allah into Christians and
Communists on four continents. But most of the Afghans hired by MEGA
Oil were like Abdullah: poor refugees whose only connection to war had
been their flight from it (something they shared with a great many
Azeris). Very few of the Afghans, according to Abdullah, had any
fighting experience whatsoever. Best had bought Afghan refugees for
pennies, and sold them as million dollar Afghan Mujahedin.

According to Abdullah, and confirmed by people involved in the project
interviewed by Thomas Goltz in the mid-1990s, the "well-armed" part of
MEGA Oil's Afghan enterprise wasn't quite accurate, either. Much of
Azerbaijan's heavy weaponry had been lost in Karabakh during the
previous winter's Armenian counter-attack. Goltz even alleged that
many of the Afghans given RPGs and anti-armour weapons watched in
horror as their rounds bounced harmlessly from Armenian
positions. They had been firing practice rounds, remarked and sold at
discount prices as live ammunition.

In addition to Afghans like Abdullah, Best imported in several dozen
American veterans to replenish those who had walked away in disgust
after Best, Aderholt and Secord's original plans had been shelved with
the fall of Mutalibov. According to Goltz, many of the "legitimate"
American mercenaries scoffed at the new meat Best brought in as "the
type of psychos who answer ads in magazines." Abdullah remembers
things differently - all of the Americans, he claims, were arrogant
sadists and willing collaborators in the scheme. Even worse were some
of the Turkish "advisors" - some allegedly members of the fascist Grey
Wolves movement - that the Turkophile Elchibey had added to the
project, one of whom shot an Afghan recruit in a brawl. Training was
hard, and the Afghans were given spoiled food and hand-me-down
uniforms mended with patches.

The winter offensive began in December. The Popular Front began a
massive program of agitation among the Azeri population, with one of
Elchibey's advisors threatening to launch nuclear warheads into
Karabakh to teach the Armenians a lesson. It soon became clear that
the offensive was a complete failure. Thousands of Azeris were killed,
and in another counter-attack, the Armenians for the first time
occupied Azeri territory outside of Karabakh itself. People that Goltz
spoke to

blamed Azerbaijan's military brass for using the "elite troops" that
Best had acquired as "cannon fodder." Abdullah has a different
explanation.

"When the shooting started, we were surrounded, and we ran," he says.
Though miles away in Tbilisi, one gets the impression that the battle
for Abdullah is just over the next hill. He fidgets and runs a hand
through his thick black hair.

"You must understand that most of us had only fired a gun a few times,
never an automatic weapon. Only a few of us had fought before, and
when we looked to [these] people to lead us, they were unable to
communicate with the Azeris. We didn't speak the language and nobody
spoke ours. The orders were to advance at any cost, but it was clear
that the people who issued these orders did not know what we were
fighting. We looked at the maps. Were we in the wrong place? No, but
they gave us maps from forty years ago! The village at the top of a
hill was burned to the ground. The Armenians were in it and they were
shooting down at us. But according to the map, there was no village at
all!"

The Azeri regular forces fared no better. An element of farce
permeated the sackings and dismissals as the Elchibey government
searched for a scapegoat to blame for the latest Azeri military
disaster. The closest thing the Azeris had to a war hero, Colonel
Surat Husseinov, decided to spare his troops the pleasure of hurling
the lifeless bodies of their comrades at Armenian machine gun nests
and withdrew of his own accord from Kelbadzhar. The Armenians swooped
down in their wake. While gaining thousands of new refugees from the
area, Azerbaijan had lost one of its last pieces of
Karabakh. Essentially, the Karabakh War was over.

Worse for Azerbaijan's leaders, Armenian troops combing the
battlefields had found many dark-skinned Afghan corpses among the
dead. A few had managed to hide identity papers, refugee cards,
pictures of their sweethearts and even, in one case, a clipping from a
Peshawar newspaper which carried a story about his son's academic
achievements.

The evidence was leaked from Karabakh through the network of Armenian
organizations throughout the world. One enterprising journalist from
the London Observer sleuthed around and discovered the embryonic core
of the story of the oil company that trained combat squads, publishing
a few details about it in his papers' November 28, 1993 edition.

The true scope of American involvement in the Karabakh War became
known as more facts were ferreted out. New Jersey Congressman Frank
Pallone, a noted friend of Armenia who has even served as an election
observer in the unrecognized Republic of Nagorno-Karabakh, called for
an investigation from the floor of Congress. Embassies in the Caucasus
distanced their bosses from allegations that MEGA Oil, a company
founded by three prominent figures in the American intelligence
community, had enjoyed official backing all along.

Andrew, the "hazmat broker," says he was not surprised by the denials,
even though he gives contradictory answers as to whether Best & Co.
had official American backing. "There is a stench of failure when
things fail so badly," he says, repeating the old saw that "'Victory
has a thousand fathers; defeat is always an orphan.'" When pressed,
Andrew says that Best wouldn't have been able to obtain the kind of
money needed to hire and outfit a mercenary army from the paltry $1.8
million Ponder claims to have advanced to MEGA in Best's oil well
fraud.

"You learn a few things from being around people like Gary Best," he
adds, "And you better learn them, since you get nothing else from his
acquaintance. Governments are born without eyes, and the left hand
doesn't know what the right one is doing. In the best parts of the USA
like the agriculture departments, they have transparency and the left
and right guide each other.

"I don't think Gary's little adventure had official support, as in the
head of the CIA signing off on it. I do think he had a lot of friends
in high places and he was able to convince these people to trust him
and not blow the whistle on what he was doing. If it worked they all
stood to benefit. The army would be victorious and would be led by
Americans. That's a powerful advantage. We wouldn't have had all the
problems we have had here and it would have been owed to America. It
didn't work though, so instead you see only Gary Best."



GOD SAVE THE SHAH

ABDULLAH RAN FOR his life from the Afghan cemetery in Karabakh, and
didn't stop running until he crossed the border to Georgia. He says he
has knowledge of only one other Afghan known personally to him to have
survived the slaughter in Azerbaijan - a cousin, who made his way home
to Peshawar. Though that city isn't really their home, it is a
sanctuary exile turned permanent - the type of place which hundreds of
thousands of Azeris from Karabakh in squalid camps, neglected by their
own government for ten years running, do not know.

The American mercenaries, some of whom had been used as "force
multipliers" during the winter offensive, trickled home disgusted and,
needless to say, unpaid. There are reports that others stayed behind
in Azerbaijan, acting as muscle for various Azeri kingpins, though no
instances have come to our attention. Thugs and oafs, sadly, are not
in short supply.

According to Andrew, one of the reasons Azeri President Elchibey was
willing to forgive MEGA Oil for their past transgressions was "his
pathological hatred of Russians." That was why MEGA's last remaining
founder returned to favour after building a Praetorian Guard for
Elchibey's predecessor and having his oil wells confiscated as
punishment.

Russian support was indeed crucial for Elchibey's opponents in their
quest to have him overthrown. Surat Husseinov, the colonel who
absconded with his troops from Karabakh during the Afghan enterprise,
rallied his forces in his hometown of Gyandzha. Direct orders for him
to return to Karabakh or disarm went unheeded. Husseinov blew his
ill-gotten fortune re-equipping his troops and their numbers grew with
the desertion of thousands of Russian soldiers from the old Soviet
base in that city. In June of 1993, Husseinov marched on Baku,
overthrowing Elchibey and bringing a relic of Azerbaijan's Soviet
past, Heydar Aliyev - a former Brezhnev protégé and head of the Azeri
KGB - in tow. Aliyev later squeezed out Husseinov and placed his dopey
son, Ilkham Aliyev, into a prime position as vice-president of SOCAR,
where he remains to this day, waiting for his father to die and to
take his place as a bejeweled sultan of a hungry nation.

Prior to Husseinov's mutiny, Elchibey was preparing to go abroad to
sign the so-called "Deal of the Century," granting rights to exploit
Azerbaijan's share of the Caspian oil shelf to a consortium of energy
companies for seven billion dollars. Aliyev signed the deal a few
months later instead.

Brigadier General Harry "Heinie" Aderholt returned to his retirement
among the palm trees in Florida, from where he supervised the writing
of his biography by a sympathetic admirer. It carries no mention of
MEGA Oil, Gary Best, or most of his career for that matter. The
debacle in Azerbaijan seems not to have tainted his reputation in the
slightest.

Richard Secord settled down in 1995, employed in a variety of offices
for Computerized Thermal Imaging, a health industry company based in
Oregon. He was made Chairman and CEO in 2002. Since he has taken over
the company, CTI's stock has fallen from $19 to about 11 cents per
share. Secord was subpoenaed in December 2002 to answer for having
sold about a hundred thousand shares of CTI stock ahead of an
unfavourable Food and Drug Administration ruling on a product they
sell; he bought the shares back a week later and made approximately
$90,000 in the bargain. A few days before press time, CTI's auditor,
Deloitte & Touche, severed relations with the company and CTI failed
to release its fourth quarter report.

As for Gary Best, his fate is unclear. Andrew repeated a rumor heard
by many former Best associates that their man had been nailed
trafficking in nuclear materials in the port of Baku by the Azeri
police. It was later covered up, or so the story goes, because
Azerbaijan under Aliyev - a repressive, brutal dictator - is an
American partner only for his claims to have stabilized a
resource-rich country torn apart by war and ready to explode by a
revolt of the disenfranchised - in essence, a Shah and a Commissar in
one. A Freedom of Information Act request was sent to several
departments of the United States government which sought any and all
documents relating to Gary Best and MEGA Oil. Surprisingly, a request
of a similar nature - including all documents relating to Best and the
export of nuclear materials from the port of Baku - was already on
record from the Summer of 2002. It was denied.

One question persists at the end of the story: Were Best, Secord and
Aderholt out for their government, or out for themselves? When what
was done in Azerbaijan is done for the love of money, we call it
greed. When it's done for the love of America, we call it
patriotism. The answer for these particular patriots is likely to be
mired in the dense gray area between the two extremities. Except for
the fraud perpetrated on Ponder Industries, it appears that most of
the dynamic trio's exploits were fully in line with the policy held an
administration desperate to lay sole claim to a source of energy
without any ties to the Iranians or Russians, but unable to do so
owing to the persistent pressure placed upon them by the
Armenian-American community. Despite a number of violations of US law
- paramount among them, the recruitment of an army for a foreign
prince or despot, a crime considered so grave by the Founding Fathers
that it is enshrined in the primary documents of the American Republic
- no one associated with MEGA Oil has ever been charged. As more time
passes and oil companies entrench themselves in the Caspian region,
the possibility becomes more remote that they ever will be.

MEGA Oil's activities in Azerbaijan appear at first glance to have had
no long-term effects on the region: the two political chieftains they
supported were both overthrown, and the Azeris probably would have
lost Karabakh anyway. But the first glance is deceiving. Emerging from
the primordial hangover of seventy years of Soviet rule, the Caucasus
staggered through the 1990s like a victim from the scene of a bloody
accident. Wars hemorrhaged from Chechnya to Abkhazia, South Ossetia to
Ingushetia, North Ossetia to Karabakh. It didn't have to be this way.

The first Bush Administration disowned the only dissidents to take
power in any of the Soviet republics outside of the Baltics - Elchibey
and Gamsakhurdia - and Clinton built upon this bankrupt policy by
dispatching CIA teams to protect the new guardians of the BTC Pipeline
from their own people. The second Bush team has sent American soldiers
to train-and-equip the Georgian army, ready to unleash blitzkrieg on
ethnic minorities in Abkhazia and South Ossetia that broke away in the
early 1990s - and possibly against an Armenian enclave in the south of
the country as well.

The only thing preventing the Americans from offering the same sort of
"help" to Azerbaijan had been Section 907. In the interest of national
security, and to help in "enhancing global energy security" during
this War on Terror, Congress granted President Bush the right to waive
Section 907 in the aftermath of September 11th. It was necessary,
Secretary of State Colin Powell told Congress, to "enable Azerbaijan
to counter terrorist organizations."

President Bush utilized the waiver almost immediately. For Azerbaijan,
no more MEGA Oils will be necessary