http://www.guardian.co.uk/politics/2008/oct/22/chagos-islanders-lose
http://www.guardian.co.uk/world/2007/may/24/politics.topstories3
Diego Garcia is probably the most important US military base you've never heard of. It's located on the biggest island of the tiny Chagos Archipelago in the Indian Ocean, on land given to us by Britain after it won it from France in the 19th Century. The base has been used to stage bombing missions in the Middle East (though now most sorties originate from our base in Qatr), refueling for long range aircraft (including CIA rendition flights, which they have confirmed to be true), maritime patrol to thwart Somali pirates, a NASA observatory, and a control hub for the GPS system. There are even some allegations, from the UN among others, that it is used as a Gitmo-style prison.
It's geographic location allows critical projection of US force and influence in the Indian Subcontinent, Near East, and Africa, which is partially why India has called for the closing of the base during the Cold War (when they were more aligned with the USSR). But then 9/11 happened, the US and India got chummier, and 40% of the active US military found itself deployed to the region. And now with Russian influence persuading many former Soviet nations to cancel their lease agreements with the Pentagon, overseas airbases are all the more precious.
Now for the victims. The islands have been mostly unpopulated historically, but current "native" Chagossians are descendants of Indian and African slaves brought by Europeans to work the islands' plantations, and decided to permanently reside there. About 2,000 of them were deported during the 1960s-70s to make room for the base's construction. The Guardian reports that some were tricked to leave the islands on temporary work assignments, and then now allowed back. Others were driven out of their homes with dogs and tear gas, and most now live in poverty on the island of Mauritius 1,200 miles away. After a 10-year legal battle, in 2007 a British court ruled in favor of the Chagossians despite pleas from the Foreign Ministry. They pronounced that the eviction was illegal and exiles should be able to return to every Chagos island but Diego Garcia, so it's not like the US had to pack its bags. However, Downing Street appealed the ruling to the House of Lords, and they overturned the lower court's decision the following year by a 3-2 vote.
The US has claimed all along that any native civilian presence there could pose a security risk, and therefore the archipelago should remain unpopulated. But the "security card" argument seems quite dubious, since the US has much larger bases in Iraq, Saudi Arabia, and Afghanistan that are a stone's throw from militants (and have been repeatedly attacked by militants), and we haven't called for the mass deportations of locals around those facilities. While the chance of a terrorist attack is slim at best, Lord Hoffman in the majority decision put it this way: "Some of these scenarios might be regarded as fanciful speculations, but in the current state of uncertainty the government is entitled to take the concerns of its ally into account."
So in this case, pressure from an ally (for the purposes of waging wars on foreign peoples) trumps legitimate redress and civil rights issues of thousands of people under the jurisdiction of overseas British territorial government. While locals have protested US military presence in many nations like the Phillipines and Korea, the Chagossians aren't even hostile to the US base dominating their homeland. Putting bread on the table comes before politics, and they merely want to work in the fishing or eco-tourism industries, or even be part of the base's 3,500 strong workforce. Only about 150 Chagossian families have expressed interest to return, so it wouldn't be a resettlement nightmare, and estimates put the cost of the process at a mere 25M pounds. But instead, the US and UK governments have declared them a security risk, so that's just the way it is.
