War on terror mired in graft as Pentagon billions are probed

THE Pentagon’s multi-billion-dollar operation to supply food and military equipment to US troops in Iraq and Afghanistan is run in chaos and corruption.

American officials are taking millions of dollars in bribes and a local supplier is accused of having links to the Iranian nuclear weapons program.

The war on terror has created a web of bribery, fraud and waste centred on US military contractors across two conflict zones, an investigation by The Times of London has found.

A recent US Senate report stated that, in addition to offering contracts to companies with ties to Iranian intelligence, the Pentagon was hiring private security companies in Afghanistan that were suspected of having ties to the Taliban and links to criminal networks.

Investigators for the US Special Inspector-General for Iraq Reconstruction were working on 110 suspected fraud cases at the latest count. At least a dozen US army procurement officers have been convicted of taking kickbacks for awarding Pentagon contracts to corrupt suppliers.

General David Petraeus, the US commander in Afghanistan, has said military supply contracts are “the source of enormous funding in this country” and part of the problem of corruption.

US army sergeant Ray Scott Chase was last month jailed for a year after pleading guilty to accepting $US1.4 million ($1.38m) in bribes from contractors in Kuwait between 2002 and 2003.

A US investigation into alleged fraud by Agility, the Kuwaiti logistics group and supplier to the US armed forces, underlines Washington’s struggle to maintain oversight on its military supply chain.

Agility, a food supplier to US troops since 2003, was stripped of its $US8.5 billion contract last year and indicted for allegedly overcharging the Pentagon by $US68m. It denies the charges.

The investigation into the activities of Agility began in 2005 after a lawsuit was filed by Kamal Mustafa al-Sultan, a member of Kuwait’s powerful Sultan family. His company, KMS, was one of the original bidders for the supply contract. He claimed he was forced out of the deal by Agility. However, the initials KMS appeared in a “bribe ledger” that was used to convict US army Major John Cockerham last year.

The former procurement officer took nearly $US10m in bribes to steer Pentagon contracts to corrupt contractors. The Times has obtained a copy of the ledger, which shows the initials KMS alongside an “anticipated” $US40,000 bribe to Cockerham, who was jailed for 17 years in December last year.

Cockerham’s lawyer confirmed that the KMS initials referred to Mr Sultan’s company.

Mr Sultan, the star witness in the case against Agility, refused to comment on the ledger. No charges were brought against him or his company and he still has US military contracts.

The Agility case has thrown a spotlight on other Gulf companies. Agility’s cancelled contract was subsequently awarded to Anham, a group in Dubai. A congressional committee has requested that Anham provide documents as part of a wider investigation into claims that transport companies in Afghanistan paid protection money to the Taliban for safe passage.

Anham said it had complied with the request and denied paying off the insurgents. “We have never paid any safe-passage fees, and immediately notified the US government when requests were made,” a spokesman said.

A separate US army investigation into protection payments made by some transport companies is continuing. “If shown to be true, it would mean that the United States is unintentionally engaged in a vast protection racket, and as such may be indirectly funding the very insurgents we are trying to fight,” said John Tierney, the Democratic chairman of the committee conducting the investigation.

Anham’s contract was challenged at the time by another Kuwaiti company, KGL Holding. The Pentagon agreed to reconsider the bid by KGL despite being aware the company was accused of having links to the Iranian nuclear program.

KGL runs Combined Shipping Company in a joint venture with the Iranian shipping line IRISL, which was blacklisted by the US in September 2008 for activities related to the proliferation of weapons of mass destruction.

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