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February 8th, 2012 COREY PEIN | Politics
 

Senator of Fortune

A lawsuit lifts the curtain on Sen. Brian Boquist’s military deals—and how Republicans may be benefiting.

news4_boquist_3814BOOMING BUSINESS: Sen. Brian Boquist’s military-training company indirectly benefits from contracting set-asides for Alaska native companies. - IMAGE: WW Photo Illustration
State Sen. Brian Boquist (R-Dallas) may be the most adventurous lawmaker in Salem.

He’s described his best-known business, International Charter Inc. of Oregon, as a humanitarian organization, ferrying relief supplies in war-torn countries from Liberia to Pakistan.

But journalistic accounts of ICI missions in West Africa in the late 1990s describe a paramilitary force of well-armed Russian and American veterans who serve as military proxies in areas deemed too dangerous for uniformed soldiers.

A federal lawsuit has raised new questions about how Boquist—a 53-year-old U.S. Army veteran—makes and spends his money.

In the complaint, first reported by wweek.com, a longtime Boquist business partner alleged Boquist and his wife, Peggy, misappropriated “thousands of dollars” from ICI Wyoming and funneled the money to Republican candidates and causes in Oregon. 

Campaign finance records show Boquist and his wife have donated more than $64,000 to GOP candidates since 2008, either personally or through an ammunition company he owns.

Boquist declined to answer questions about the lawsuit; the plaintiff, Danny O’Brien, moved to withdraw the lawsuit Feb. 3, the day WW broke the story. In an email to WW, Boquist said he hadn’t seen the complaint and that federal rules limited what he could say.

Boquist was first elected to the Oregon House in 2004, after twice running unsuccessfully against then-U.S. Rep. Darlene Hooley (D-Ore.). 

Apart from farming, ranching and timber interests in Oregon, Boquist has served as the U.S. agent of a Russian aviation firm that supplied ICI with helicopters and crews, and owns several ICI offshoots in Oregon, Alaska and Wyoming.

ICI Wyoming runs a military-training complex outside Cheyenne, where it conducts live tactical exercises featuring rocket-propelled grenades, mortars and simulated truck bombs. The customer is a U.S. Marine Corps expeditionary force based at Camp Lejeune, N.C.

Training is a sideline—and sometimes a cover—for many private military companies. In War Dog, a 2006 book on mercenaries by British journalist Al J. Venter, ICI’s O’Brien is pictured posing with villagers in Northern Pakistan on a U.S. State Department contract. O’Brien is quoted bragging of his Russian pilots’ “big balls” running “unauthorized cross-border missions.”

The book describes ICI as “Africa’s own Air America,” a reference to the Central Intelligence Agency’s notorious covert supply network in Southeast Asia during the Vietnam War. (Boquist’s résumé boasts a stint at Evergreen International Airlines before he founded ICI in 1993. Evergreen—a company with CIA ties, as documented by The Oregonian—purchased some of the Air America fleet.)

ICI Wyoming works as a subcontractor to Defense Training Systems, which is the trade name of ILSC Holdings LC, a subsidiary of Katmai Government Services. Katmai is itself wholly owned by Ouzinkie Native Corporation, which is headquartered in Ouzinkie, Alaska, population 200, on an island in the Kodiak archipelago.

Through ILSC, Boquist’s company benefits from a lucrative loophole in U.S. contracting rules. Congress created special benefits for Alaska native corporations in a 1971 law, making them eligible for no-bid, sole-source government contracts.

A 2010 series in The Washington Post exposed how most of the $29 billion in contracts awarded to Alaska native corporations over the past decade benefited not impoverished tribal shareholders but well-connected white insiders.

Federal records show that ILSC, which hired Boquist’s company, has received $156 million in Defense Department contracts since 2000.

In an email to WW, Katmai CEO Dave Stephens stressed the company’s compliance with federal rules restricting lobbying and political donations by defense contractors. 

Stephens says Katmai has “no knowledge of the alleged use of ICI funds by Mr. Boquist.”

The lawsuit against Boquist valued ICI’s subcontracts at $2 million a year, and claims ICI Wyoming paid “income and dividends” to shareholders in 2010 in excess of $1 million.

If Brian and Peggy Boquist are 45-percent owners of ICI Wyoming, as the lawsuit says, then their profit would have totaled, since the contract began in 2007, an estimated $1.8 million. 

 
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