Fearing Scandal, Air Force Blocked Two Generals’ Consulting Deals with Azerbaijan

At one point, according to the 2015 memo, Fraser warned that if the US government prevented him from working for Silk Way, it would face “blow-back” from Azerbaijan, and that Aliyev’s government might even block US and NATO supply routes to Afghanistan in retaliation.

‘Azerbaijan Was the Key’

Two decades of US wars in Afghanistan and the Middle East have created a thriving job market for American veterans trying to profit from their overseas deployments.

Fraser and McNabb are among more than 500 retired US military personnel who have sought federal permission over the past eight years to accept jobs as consultants or contractors for foreign governments, according to a Post investigation. Most of the jobs originate in countries known for human rights abuses and political repression.

McNabb and Fraser, now both 70, accumulated a multitude of foreign contacts while leading the US Transportation Command (Transcom), the military’s giant logistics arm responsible for moving troops and supplies around the globe.

McNabb, an Air Force Academy alumnus, headed the command from 2008 to 2011. Fraser, a Texas A&M graduate, succeeded him and held the job until retiring in 2014.

As commanders, their primary challenge was transporting materiel to landlocked Afghanistan, a logistical nightmare. Iran blocked access from the west. Pakistan offered access from the south and east for truckers willing to drive arduous routes over mountains and through deserts, but sometimes closed its border checkpoints when tensions rose with Washington.

When McNabb took charge of Transcom, he told the Post in a recent interview, one of his first tasks was to try to open an alternative supply route to Afghanistan from the north that bypassed Russia. The only feasible option was to cross the territories of several former Soviet republics, including Azerbaijan.

In November 2008, McNabb made his first international trip as Transcom commander to Baku to see if he could win support from Aliyev and his government for new sea and ground supply routes as well as expanded overflight rights.

“Azerbaijan was the key,” McNabb recalled in the interview. “Folks don’t realize how critical that was.”

Aliyev had ruled Azerbaijan since the 2003 death of his father, Heydar, a former KGB boss who became president shortly after the breakup of the Soviet Union. Corruption flourished under the Aliyevs, with the CIA describing it as “pervasive” and the State Department calling it “systemic.”

In a classified 2009 diplomatic cable made public by the anti-secrecy group WikiLeaks, the US Embassy in Baku described Aliyev as “a mix” of Michael and Sonny Corleone, the fraternal mobsters of “The Godfather” novel and movie.

“His goal appears to be a political environment in which the Aliyev dynasty is unchallenged,” the embassy wrote. Aliyev later appointed his wife, Mehriban Aliyeva, as vice president. Both remain in their positions.

McNabb said Aliyev’s government was open to the proposed military supply routes but wanted something in return. At first, Azerbaijani officials insisted the United States would have to pay tariffs to use their country’s airspace, though they later relented. “I had to tell them we don’t pay anyone,” McNabb said.

The supply routes paid off for Azerbaijan in other ways, however. Silk Way Airlines, seeking to break into the US market, received $269 million in US defense contracts during McNabb’s three-year tenure at Transcom to transfer supplies from Europe to Afghanistan and Iraq, according to Air Force records.

McNabb did not play a direct role in the contracting process. But he met with Silk Way officials and said he once hosted a Silk Way executive for dinner at his home at Scott Air Force Base in Illinois. “They did do a lot of missions and they did do a lot of good work,” he said.

Retirement and a Job Offer

McNabb retired from the Air Force in December 2011 and settled in Arlington, Va. Eighteen months later, he said, officials with Silk Way Airlines contacted him about a possible business venture.

Silk Way wanted to modernize its operational control center at Heydar Aliyev International Airport in Baku. The firm invited McNabb to return to Azerbaijan in June 2013 for a visit and offered to hire him as an adviser, he said.

McNabb agreed. That month, he said, he set up a consulting firm, Ares Mobility Solutions, partnering with a retired Air Force colonel and a captain in the Navy Reserve who had worked in the airline industry. Ares signed a contract with Silk Way that paid a monthly retainer of $10,000 plus expenses, documents show. Under the deal, McNabb was expected to travel to Baku every three to five months to work for a few days at a time.

According to federal law, retired US military personnel — defined as those who served at least 20 years in uniform — and reservists are required to obtain permission from their branch of the armed forces and the State Department before they accept anything of value from foreign powers or companies controlled by foreign governments.

Silk Way Airlines was one of 23 subsidiaries of a private holding company, Silk Way Group LLC, that had come to dominate the aviation sector in Azerbaijan after the partial privatization of the country’s state-owned airline.

McNabb said he thought Silk Way Airlines was wholly private so he didn’t seek federal authorization at first. “This was not with the government,” he told the Post. US investigators would disagree.

Like McNabb, Fraser made Azerbaijan a priority during his tenure as Transcom chief.

A few weeks after taking command, he flew to Baku in December 2011 to discuss the Afghanistan supply routes with Aliyev and other Azerbaijani officials. Over the next three years, Fraser met with Aliyev twice in Azerbaijan and once in New York, according to Azerbaijan’s government.

Transcom also continued to do considerable business with Silk Way Airlines, with the firm receiving an additional $100 million in US defense contracts, according to Air Force records.

In April 2014, Azerbaijan’s ambassador to the United States visited Scott Air Force Base in Illinois to tour Transcom headquarters.

The ambassador, Elin Suleymanov, met with Fraser, who was nearing the end of his time in command.

During the visit, the diplomat noted that “there are many opportunities for future military and commercial cooperation” between the United States and Azerbaijan, according to a US military press release.

A ‘Going Rate’ of $5,000 a Day

Fraser retired from the Air Force two months later, on July 1, 2014. Within days, according to Air Force records, he received a job offer from Silk Way Group.

Unlike McNabb, Fraser sought advance permission from the Air Force to work for Silk Way.

Fraser said he sought authorization because a Transcom ethics counselor had advised him to do so. In a memo, the counselor noted that “the degree to which the Azerbaijan government owns and/or controls [Silk Way Group] has been the subject of media speculation in the past.”

The reference was to a 2010 investigation by Radio Free Europe/Radio Liberty — an overseas broadcaster owned by the US government — that reported that Aliyev’s 21-year-old daughter was one of the owners of Silk Way Bank.

In his foreign-employment application to the Air Force, Fraser gave few specifics in describing his proposed duties with Silk Way Group, writing that he “would be a consultant/advisor providing subject matter expertise” and would “help develop future business opportunities.” He said his “going rate” as a consultant was $5,000 a day.

The application immediately drew scrutiny at the Pentagon. Deavel’s staff concluded that, contrary to Fraser’s assertion, there were strong indications that the government of Azerbaijan controlled Silk Way Group.

Meanwhile, the Air Force Office of Special Investigations conducted a separate review and submitted a classified report to Deavel. While details of the review remain a secret, the investigative agency said it had “national security concerns” about Silk Way, according to an unclassified memo summarizing the report.

That was enough for Deavel. He denied Fraser’s application on Sept. 30, 2014. “Ultimately, I cannot find the proposed relationship in the best interests of the United States,” he wrote.

Fraser didn’t give up. Two days later, he called Deavel and asked what he needed to do to persuade the Air Force to change its decision.

In a memo recounting the conversation, Deavel wrote that the discussion was “a little awkward,” partly because it was unusual for him to get a call from a four-star general, and partly because he had based his decision on the classified report.

On the phone, he told Fraser about the existence of the classified report, but said he couldn’t discuss details. He explained that the classified material “did cause me concern about the activities of his proposed employer and whether approving this compensated relationship posed risks to the reputation of the Air Force,” according to Deavel’s memo.

Still, Fraser pushed for approval. He told Deavel “that he knew the application was hazy and lacked specifics,” and asked if he could resubmit it with additional information that might make approval more likely.

Fraser also made some comments that Deavel took as a warning, documents show. The general said he believed there would be “blowback for the United States” if the Air Force didn’t let him work for Silk Way, according to Deavel’s memo.

In particular, Fraser noted that Azerbaijan had just renewed Transcom’s overflight rights and entered a strategic security relationship with the United States. He said Azerbaijani officials “would see a denial as inconsistent with those partnership agreements.”

Fraser also urged Deavel to contact the State Department’s desk officer for the Caucasus region, who he said would vouch that the general’s employment with Silk Way “was useful for American interests” in Azerbaijan.

Like Father, Like Son

Fraser resubmitted his application to the Air Force in November 2014. This time, he specified that he would consult for Silk Way West Airlines instead of the Silk Way holding company. One thing Fraser did not mention on his application was that his son, William Fraser IV, also worked in the aviation business in Azerbaijan.

William Fraser IV, a former US Marine sergeant who goes by the nickname “Mac,” had taken a job two years earlier as an assistant to the president of Azerbaijan Airlines, the state-owned carrier, as a public relations and strategic communications specialist.

Mac Fraser said he also worked part time for Silk Way West Airlines — the company that now wanted to hire his father for $5,000 a day. Mac Fraser left Azerbaijan Airlines to accept a full-time job with Silk Way West Airlines as a Houston-based marketing manager in March 2015, according to his LinkedIn profile.

In an email exchange with The Post, Mac Fraser said he was unaware his father had received an offer to work for Silk Way West Airlines around the same time he did.

National Security Concerns

After Gen. Fraser submitted his second application, Deavel checked out his claim that the State Department thought his job with Silk Way would be “useful for American interests,” according to the case files.

State Department officials contradicted the general’s assertion and said they weren’t pushing for his job to be approved. They also said they “strongly disagree[d] with Gen. Fraser’s assessment” that there would be “diplomatic ‘blow-back’ from the Government of Azerbaijan” if US officials rejected his consulting gig, documents show.

The State Department surprised Deavel with a second revelation. Officials told him another retired four-star Air Force general — McNabb — had informed the State Department’s desk officer for Azerbaijan that he was working for Silk Way Airlines. It was the first time anyone had notified the Air Force about McNabb’s consulting job in Azerbaijan.

Deavel informed other Air Force officials that they had another potential problem on their hands. Not only had McNabb not applied for federal permission but the Office of Special Investigations’ national security concerns about Silk Way would probably apply in his case, too.

Deavel wanted to make sure he had the backing of his superiors. He wrote a “High Interest Notification” memo and sent it up the chain of command.

He noted that the State Department agreed that the government of Azerbaijan effectively controlled Silk Way and its subsidiaries. State Department officials, he emphasized, had expressed “disappointment that Gen Fraser, as a retired four star, would not voluntarily withdraw the request and seek post-retirement opportunities elsewhere,” according to the memo.

Deavel also reported that the Office of Special Investigations had shared its classified report with other federal intelligence agencies and that they all concurred with the national security concerns about retired US military personnel working for Silk Way.

Further, Deavel described how he had recently learned that McNabb was working as a Silk Way consultant without federal approval, which “causes me even greater concern” given Silk Way’s US defense contracts. Deavel reported that Transcom had awarded 2,230 cargo airlift missions to Silk Way during McNabb’s tenure, plus 1,117 missions while Fraser was in command, for a total cost of $369 million.

On Jan. 9, 2015, Deavel wrote a terse letter denying Fraser’s employment with Silk Way as “not in the best interests of the Air Force.”

A Failure to Seek Permission

While that marked the end of Fraser’s push to consult in Azerbaijan, the Air Force still needed to decide what to do about McNabb.

The case bounced around the highest levels of the Air Force until June 2015, when the Air Force inspector general opened an investigation to determine whether McNabb had committed misconduct by working for Silk Way Airlines without federal approval.

Three investigative officers interviewed McNabb at the Pentagon on Oct. 23, 2015. The retired general said that he hadn’t done anything wrong and that he had never come across any evidence that Silk Way Airlines was under the control of the government of Azerbaijan.

During his interview with investigators, McNabb was argumentative at times and questioned why no one in the Air Force had ever told him he should apply for federal permission to work for Silk Way.

“If somebody thinks I need to, please just tell me,” he said. “I’m chagrined that anybody would think that I would not try to live up to all of the ethics rules.”

Investigators noted that he had been briefed about the rules on foreign-government employment shortly before his retirement and that it was his responsibility to comply with the law.

In his interview, McNabb said that he was aware Fraser was also trying to work for Silk Way, but that they didn’t coordinate their efforts.

He denied that his consulting job was a reward for the US defense contracts awarded to the company when he headed Transcom.

The Air Force inspector general’s office completed its investigation into McNabb in November 2015 and concluded that he had violated the law by failing to seek permission for foreign-government employment.

There is no criminal penalty for breaking the law, but the military can withhold retirement pay from those who do so.

McNabb confirmed that the Defense Department docked his pension but declined to say how much.

“It was enough,” he said. “I paid.”

(This article has been shortened due to space considerations.)