US military food supplier for Iraq, Afghanistan is suspended over fraud indictment

Gunnery Sgt. David M. Anderson talks with a Marine about the importance of food temperature on Camp Leatherneck, Afghanistan, April 12. Anderson is a food service chief who is responsible for the serving of hundreds of thousands of meals weekly in eight different dining facilities.


By AARON GREGG | The Washington Post | Published: January 3, 2019

The company responsible for providing food and water for deployed U.S. troops in Iraq and Afghanistan has been formally suspended after its former chief executive was charged with fraud in relation to an $8 billion troop supply contract, a U.S. official confirmed Thursday.

Defense Logistics Agency spokesman Patrick Mackin said in a phone interview that the company, a Dubai-based conglomerate called Anham FZCO, is barred from applying for future opportunities with the U.S. government.

An Anham spokesman noted that the suspension does not affect the company's current ability to service its existing contracts in Iraq and Afghanistan, and noted that the company would seek an unspecified resolution with the Defense Logistics Agency. The suspension can still be overturned.

"We are disappointed by this action, which is based on years-old alleged conduct by individuals who no longer work for Anham or any of its subcontractors," the spokesman said. "As we said when these individuals were charged by the Justice Department, we are puzzled why the department decided to pursue criminal prosecution for matters that are usually handled through civil resolution, but we understand that all of the individuals involved are vigorously contesting the charges against them."

In late November the Justice Department charged former Anham chief executive Abul Huda Farouki and two of his associates with fraud, alleging they had laundered money, violated U.S. sanctions while shipping products through Iran, and constructed a fake construction scene to overstate their progress while bidding on lucrative government work. The indictment followed a lengthy investigation by the Department of Homeland Security and the Special Inspector General for Afghanistan Reconstruction. The three individuals pleaded not guilty.

For years, Anham has held multibillion-dollar contracts to supply U.S. troops with food and water across five Middle Eastern countries. Its contract for Irag, Kuwait, Syria and Jordan was awarded to a different company in 2015, but Anham was able to extend that work by protesting the award. The Defense Logistics Agency is also moving to reopen the $8 billion Afghanistan troop supply contract to new competitive bidders.

Anham's suspension is likely to speed up the process of transferring that work to a new set of suppliers.