Oversight of U.S. military’s food suppliers is called into question

Executives from a company responsible for providing food and water for deployed U.S. troops in Afghanistan have been charged with defrauding the government and creating a fake construction site to overstate progress on an $8 billion contract, the Department of Justice said in a recently filed indictment.

The allegations came four years after the company’s predecessor pleaded guilty to criminal charges that it fraudulently inflated prices for basic items it sold to the U.S. military. Both cases emphasized how the military has struggled to curb abuses of defense spending in America’s longestrunning foreign war as the military presence in Afghanistan enters its 17th year, analysts said.

On Nov. 27, the Justice Department charged Abdul Huda Farouki, Mazen Farouki and Salah Maarouf, three Virginia residents who worked with a Dubai-based company called Anham FZCO, with defrauding the military under an estimated $8 billion military supply contract.

The DOJ also accused them of laundering money, violating U.S. sanctions while shipping products through Iran, and photographing a fake construction scene to mislead contracting officers regarding their progress. The three individuals pleaded not guilty.

The lawsuit revived long-standing concerns over Anham’s stewardship of taxpayer dollars, and also raised questions about the government’s oversight of the Subsistence Prime Vendor — Afghanistan contract, known as SPV-A. The contract is seen as important to the military presence in Afghanistan because it ensures deployed troops have access to food, water and basic provisions. Servicing it is immensely challenging, however, because the contractor is required to build and maintain a distribution network in the middle of a war zone.

The last company to handle that work, a privately held Swiss company called Supreme Foodservice GmbH, pleaded guilty to similar charges in 2014 and paid $288.36 million in criminal fines following a congressional inquiry.

The Defense Logistics Agency deputy director of public affairs, Patrick Mackin, declined to comment on the allegations against Anham FZCO, but noted that the agency “employs a team of experienced acquisition specialists that have consistently administered this contract.”

He described a detailed process through which the Defense Logistics Agency evaluates vendors in cooperation with other Defense Department Agencies. The agency is in the process of recompeting the contract, he said.

The indictment against Anham describes an elaborate scheme to mislead U.S. contracting officers as the company competed for lucrative government work.

When the company fell behind on a project to build a complex of warehouses near Bagram Airfield in Afghanistan, the DOJ alleged, the company submitted fabricated completion dates and “misleading photos” that made the project look further along than it actually was.

Anham employees were directed to “transport construction equipment, prefabricated sheds, generators, empty shipping containers and a construction crane to the site of the proposed Bagram warehouse complex to create the false appearance of a construction site,” the DOJ indictment says.

Anham still holds U.S. troop supply contracts for Afghanistan, Iraq, Kuwait, Syria and Jordan.