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In Lithuania, Borisov is well known for his flamboyant lifestyle and a scandal that led to the impeachment in 2004 of Lithuania’s president, Rolandas Paksas. Borisov was the top financial backer of Paksas’s election campaign. He contributed $400,000.

The president’s troubles began after police alleged that Borisov was in cahoots with the Russian mafia. Paksas’s political career fell apart after telephone calls secretly recorded by the state security department became public during the Lithuanian parliament’s impeachment proceedings. In one, Borisov is allegedly caught speaking with reputed Russian mob bosses.

Borisov and Paksas denied all the accusations. No charges were filed against Borisov, but the U.S. Embassy in Vilnius, Lithuania’s capital, kept a close eye on him. When AviaBaltika applied to the Lithuanian government in 2005 for a license to train Iranian helicopter pilots, Tom Kelly, then the embassy’s deputy chief of mission, alerted State Department officials in Washington.

Kelly called AviaBaltika “infamous” in a cable published by the Wikileaks website. The Lithuanian government, Kelly wrote, understood the license request “is likely to set off alarms in Washington, and wants to make sure we have a chance to affect” the decision. The U.S. recommended the request be denied. It was.

But warnings about Borisov’s companies appear to have slipped through the cracks. By 2008, AviaBaltika and SPARC were part of an umbrella contract to support U.S. counterterrorism activities held by defense industry giant Northrop Grumman and managed by a Navy office in Dahlgren, Va.

AviaBaltika and SPARC were tasked with overhauling 10 Mi-17 helicopters, part of the U.S. strategy to defeat al-Qaida and other extremist groups. The Pentagon acquired dozens of new and used Mi-17s to give to Iraq, Afghanistan, Pakistan and other countries in its fight against terrorism.

But Avia Baltika and SPARC ran into trouble.

A $38 million job to refurbish the 10 Mi-17s ballooned to more than $64 million and delivery dates were badly missed, according to the Pentagon inspector general’s audit of the work done by Borisov’s companies.

Jonas Bazaras, AviaBaltika’s commercial director, said in an email that the audit’s findings “are not consistent with the reality,” but declined to comment further.

Two of the choppers were 20 months behind schedule, the audit said. Eight others for Pakistan’s air force missed their deadline by a year.

Yet U.S. government contracting officers kept paying the bills for what auditors described as unquestioned and unnecessary costs. AviaBaltika and SPARC charged exorbitant rates for helicopter replacement parts. For example, a storage battery cost just over $13,000, 500 percent more than the going rate from other companies. AviaBaltika wanted $20,000 for a landing light, nearly double the market cost.

It was virtually impossible to assure the overhauls were being done properly because quality control inspectors from the U.S. government and Northrop Grumman were repeatedly refused access to SPARC’s facilities in Russia.

William Bain, then a senior manager at Northrop Grumman, wrote in a February 2010 memo that the access denial “clearly demonstrates that AviaBaltika and SPARC are totally unfit to be entrusted with business that can flow down to them on behalf of the U.S. government.”

Borisov’s companies ran afoul of the Russian government, too. The companies shipped two military choppers for repair work in Russia, but claimed the helicopters were commercial models because the companies were not authorized to perform overhauls on military aircraft.

A memo signed by Borisov’s son, Pavel, Avia Baltika’s president and financial director, stated the copters “belong to civilian category and have no restrictions for import and export to Russia.”

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