ATLANTA/MOSCOW (Reuters) -
For months, a powerful U.S. senator has been pushing for details of a
murky deal under which a Russian manufacturer supplies the rocket
engines used to launch America’s spy satellites into space.
At issue: how much the U.S. Air Force pays for the engines, how
much the Russians receive, and whether members of the elite in
President Vladimir Putin’s Russia are secretly profiting by inflating
Now, documents uncovered by Reuters provide some answers. A
tiny Florida-based company, acting as a middleman in the deal, is
marking up the price by millions of dollars per engine.
That five-person company, RD Amross, is a joint venture of
Russian engine maker NPO Energomash and a U.S. partner, aerospace giant
United Technologies. According to internal company documents that lay
out the contract, Amross stands to collect $93 million in cost mark-ups
under its current multi-year deal to supply the RD-180 rocket engine.
Those charges are being added to the program despite a 2011
Pentagon audit that contested a similar, earlier contract with Amross.
That deal would have allowed Amross to receive about $80 million in
“profit” mark-ups and overhead expenses on RD-180 engines, government
The confidential report of the 2011 audit described the
mark-ups and additional charges as improper under U.S. contracting law.
Amross, the auditors concluded, was a middleman that did “no or
negligible” work. The audit characterized the $80 million in added costs
as “unallowable excessive pass-through charges.”
A spokesman for RD Amross told Reuters that the company
resolved the dispute by reducing its charges under the first contract.
Neither Amross nor the Pentagon would disclose the dollar amount of the