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Originally published March 22, 2010 at 7:49 AM | Page modified March 23, 2010 at 6:50 AM

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Russian company denies Air Force tanker bid, but documents show its interest

Russia's state-owned aircraft company is denying plans to bid against Boeing for the U.S. Air Force tanker contract, but documents suggest it discussed such a venture as recently as last month.

Seattle Times business staff

Russia's state-owned aircraft company says nyet, it has no plan to bid against Boeing for the U.S. Air Force tanker contract.

But the American lawyer who told reporters about the bid Friday has documents suggesting that Russia's United Aircraft was in talks for such a bid as recently as last month and that high Russian officials were involved.

John Kirkland, a Los Angeles attorney with the firm Luce Forward, had said that United Aircraft planned to announce this week it would partner with a U.S. company to assemble tankers based on the Ilyushin-96 airliner in the U.S.

Over the weekend, United Aircraft CEO Alexei Fyodorov told Bloomberg News that the company "is not planning to take part in the tanker tender or set up a joint venture," calling the idea "utter nonsense."

Reuters also quoted an unnamed United Aircraft official as saying, "We have not been holding, are not holding and are not planning to hold such talks."

Documents provided by Kirkland, however, indicate discussions between United Aircraft and a U.S. company had proceeded quite far in January and February.

A Feb. 16 letter, in Russian with an English translation, says United Aircraft, as well as Russia's arms-exporting agency and several other entities, "all gave positive conclusions in regards with our proposal of signing this JV agreement between our two organizations." It continues, "Earlier Prime Minister [Vladimir] Putin has issued a resolution of his approval instructing executing of this JV cooperation agreement."

The letter, which specifically requests documentation that the tanker contract is open for bidding, was written by V.V. Smolko, identified as general director of civil aviation for United Aircraft. It was addressed to Richard Berkshire of World Aviation Maintenance in Omaha, Neb., who did not return calls Monday.

Kirkland also provided an unsigned Jan. 29 "joint cooperation venture agreement" in English and Russian that calls for United Aircraft to bid "to supply the next generation of United States Air Force tankers, the KC-X, and to sell, manufacture and supply the planes if selected."

The U.S. partner in the venture was identified as UAC America, a shell company created for the venture, with Richard Berkshire as its corporate secretary and Kirkland as its attorney.

Kirkland had said the U.S. partner would be "a U.S. public company." World Aviation Maintenance is not publicly traded, and it's unclear what the company currently does.

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United Aircraft is 89 percent owned by the Russian government, according to its Web site, and was formed at the direction of Putin while he was Russia's president.

A source at the Russian company told Reuters "there are some internal discussions within [United Aircraft], but very preliminary ones, about the production of an air tanker based on the Il-96. But to talk about Russian air tankers refueling U.S. military planes — it is from the realms of fantasy."

Boeing is the only confirmed bidder for the $40 billion contract after Northrop Grumman dropped out earlier this month, claiming the proposal requirements favored Boeing's smaller 767-based airplane. Northrop's partner, European manufacturer EADS, is asking the Pentagon for more time to evaluate whether it can offer a tanker based on the A330 without Northrop.

Asked about prospects for a United Aircraft bid, Pentagon spokesman Bryan Whitman said Monday that "we welcome proposals from any qualified offerors. That said, I don't think that they would qualify."

Seattle Times aerospace reporter Dominic Gates contributed to this story.

Rami Grunbaum: rgrunbaum@seattletimes.com or 206-464-8541

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