To feed U.S. troops, firm violated Iran sanctions, feds say

The head of the company that feeds U.S. troops in Afghanistan has been charged in federal court with violating sanctions against trade with Iran, plus other offenses.

The federal indictment charged Abul Huda Farouki, 75, a Jordanian-American and wealthy philanthropist from Virginia with long-standing ties to Bill and Hillary Clinton, with conspiracy to commit money laundering, violating sanctions against Iran and fraud. The charges are in connection with more than $8 billion in contracts held by his company, Anham FZCO, to provide food and other logistical support to U.S. troops in Afghanistan. The charges involving Anham make a series of legal cases against the three major food service companies serving U.S. troops in Afghanistan since 2005.

Also charged in the case were Farouki’s brother, Mazen Farouki, 73, owner of a closely associated company, and Salah Marouf, 71, who owned a company that did business with the Farouki brothers’ firms. Both are also U.S. citizens. All three were indicted in U.S. District Court in Washington, and each was released on $50,000 personal recognizance bail.

Farouki’s lawyer, Adam Hoffinger, issued a statement disputing the charges, saying they were “at most a regulatory infraction, and one which Farouki and his company, Anham, voluntarily disclosed to the government long ago.”

Hoffinger’s statement went on to say that Anham had saved the U.S. government $1.4 billion with its current food services contract.

“It replaced an earlier contract that the United States government had with another company that pleaded guilty to fraud against the United States, including overbilling,” he said.

After Anham won the food services contract in Afghanistan in 2012, the previous contractor, Supreme Group, complained Anham was undercutting Supreme by, among other things, saving costs by shipping through Iran. Supreme Group later itself pleaded guilty to inflating prices on goods to Afghanistan in 2012. Another food service company, Agility, had been banned from renewing its contract in 2009 after an indictment for fraudulent accounting.

John N. Sopko, the special inspector general for Afghanistan reconstruction, said the case began with information from an unidentified whistleblower four years ago.

In all, the inspector general’s agency has won convictions of 132 people, mostly contractors in Afghanistan, as of October. Sopko asserted that corruption among U.S. contractors has undercut efforts to fight the serious corruption problems in the country already.

“We just poured so much money into the country we contributed to the corruption problem; we were like throwing fuel on the fire,” Sopko said.

Other officials at his agency credited a 2013 article in The Wall Street Journal with prompting the investigation. The article detailed Anham’s efforts to circumvent Iranian sanctions and save on costs by shipping through Iran, and it was based on internal emails from Anham. At the time, the Pakistan border was closed, and the alternative of shipping through Central Asian countries was much more costly.