By Sumayyah Meehan, Muslim Media News Service (MMNS) Middle East Correspondent
The U.S. Chief District Attorney, this week, revealed a conspiracy by a Kuwaiti owned and operated food company to bilk the American government out of $8.5 billion in contracts to provide food for troops in Kuwait, Jordan and Iraq. It took the Atlanta-based Grand Jury no time at all to indict the Kuwaiti company. According to the indictment, Agility (formerly known as the Public Warehousing Company) was charged with a veritable â€˜laundry listâ€™ of crimes related to defrauding the U.S. Government. Agility provided food for U.S. troops from 2003-2005. The conspiracy was uncovered during a probe into unethical business practices of Middle East vendors.
According to court documents, Agility took painstaking measures to get away with the fraud. Some of the charges include submitting falsified documents, overinflating prices to sometimes triple the local Kuwaiti market value, making false statements and wire fraud. Most damaging is perhaps the revelation that Agility ordered itâ€™s own suppliers to reduce the size of packages so that twice the number of packages would be delivered to unsuspecting U.S. military bases.
Agility is not taking the charges sitting down and has already come out â€˜swingingâ€™ and leveling their own verbal barrage at the U.S. government. In a recently released statement to the press, Agility has vehemently denied any wrongdoing and says that the charges are baseless. The company also says that ongoing contracts with the US government, which are not part of the current indictment, remain in tact. However, Agility has been barred from bidding on new contracts with the US until the pending indictment is either proven or dismissed. The press release also went on to say that Agility is putting itsâ€™ full confidence in the US system of justice to prove itsâ€™ innocence, â€œAn indictment and a complaint are merely allegations. PWC is confidant that once these allegations are examined in court, the will be found to be without merit.â€ Agility also revealed that the prices it charges for itsâ€™ goods and services were predetermined and approved by the U.S. government and that company heads are â€œsurprised and disappointedâ€ by the charges.
This case is only one out of several that have been launched against contractors hired by the U.S. government over the past several years. The most notable is a case of fraud leveled against KBR, which is a subsidiary of Halliburton. The company has been charged with overcharging the U.S. government for oil and other military supplies. Since the news of the Agility fraud broke, the company has ceased all trading in the Kuwait stock market which has seen an 8% drop in its stocks. However, on the Dubai market, Agility continues to rally without incident.
Agility stands to lose plenty if it is found guilty of the charges of fraud. According to a recent report by Goldman Sachâ€™s, the companyâ€™s annual revenue is comprised of a meaty 37% of American contracts. A guilty verdict would result in Agility being put on probation and having to repay either twice the gain they received from the contracts or twice the loss that the U.S. government incurred. The U.S. government has promised to deal swiftly with those seeking to defraud it and that the charges against Agility are â€œonly the first stepâ€ in dealing with dishonest contractors.
In the meanwhile, Agility continues to look for new ways to break the chains of reliance upon the U.S. government for itâ€™s daily â€˜breadâ€™. Agility has diversified itself across the board. The company now sells real estate and even provides freighter service for gold mining companies in Papua New Guinea. However, their new business ventures may prove to be exercises in futility as the U.S. government is unlikely to back down as it relentlessly seeks justice.