In June 2011, the Defense Department’s Office of the Special Inspector General for Iraq Reconstruction (SIGIR) released a scathing report on a defense contracting company called Anham. The title of the report and its conclusion were the same: “Poor Government Oversight of Anham and Its Subcontracting Procedures Allowed Questionable Costs To Go Undetected.”
Dubai-based Anham and its “affiliated” subcontractors were awarded a $119 million contract in 2007 to provide materials to the Iraqi Security Forces. The DOD review analyzed Anham’s business practices for contracts representing 40 percent of its award, or $40 million taxpayer dollars and found problems and irregularities in Anham’s estimating and billing, sub-contractor relationships, and delivery confirmations.
The report recommended that the Office of the Secretary of Defense further monitor and review much of Anham’s contracting activity in Iraq and Afghanistan.
So how did Anham then go on to win an $8 billion multi-year contract in Afghanistan which allowed it to illegally ship supplies through two Iranian border crossings and a seaport controlled by the Iranian Revolutionary Guard?
On September 26, the Wall Street Journal ran an investigative story about Anham’s shipment of materials through Iran to Afghanistan, noting that company executives claimed they were not aware of the violation. U.S. sanctions clearly state that American contractors, subsidiaries, and affiliated contractors are prohibited from transshipping through Iran, though Anham professed ignorance and blamed subcontractors.
It is difficult to believe that Anham CEO Abdul Huda Farouki, a long time Virginia resident, was not aware that millions of dollars of his U.S. Military supplies were being shipped through a volatile country that has threatened to destroy America and is subject to numerous American sanctions — especially as UniTrans, a company run by his brother, was reportedly one of the subcontractors.
Anham emails detail problems with shipping U.S. supplies through our nation’s worst enemy, including notes indicating that subcontractors lied to Iranian border guards about the purpose of the materials. One of the reasons for sanctions is to prevent any monies from U.S. Government contracting from reaching Iranian banks designated by the Treasury Department as financiers of WMDs and terrorism.
Mr. Farouki is a successful entrepreneur with demonstrable fealty to the Democratic Party. His wife and children also support liberal politicians. One need only follow their wallets to arrive at this conclusion.
Personally, and through his businesses, Mr. Farouki has been donating to Democrats since the mid-1990s. During the 2004 Democratic primaries, he financially supported both John Kerry and John Edwards. In 2000, he gave at least $67,000 to the Democratic National Committee, while Mrs. Farouki making a small donation to the Bush campaign, presumably to hedge their bets.
The Faroukis are a longtime donors to California Senator Dianne Feinstein, their neighbor in Aspen, current member of the Defense Appropriations Subcommittee, chairman and ranking member of the Senate Military Construction and Appropriations Committee for many years. Feinstein has attracted wide criticism when defense contracting companies affiliated with her husband received favorable status in contract awards. They have also been generous to Virginia Congressman Jim Moran, whose election bids have been fraught with illegal donations from contractors, and who serves on the House Defense Appropriations Committee.
Obama For America benefitted from Farouki generosity with multiple contributions made in 2008 — before Anham was awarded another $8 billion from the administration after his fraudulent business practices became a matter of public record.
The family’s closest affiliation is with the Clintons. Between 1995 and 2008, Farouki family members — including two associated with the same UniTrans International, under scrutiny for the Iran transshipment — made at least 19 donations to Clinton-associated campaigns. Since 2005, Farouki has participated in The Clinton Global Initiative, and during his presidency, Bill Clinton appointed him to the prestigious advisory board for Washington’s Kennedy Center.
Mr. Farouki is a brilliant businessman and DC power player. And there is certainly nothing wrong with embracing an ideology and financially supporting politicians who practice it.
But remember the $600 Defense Department hammer controversy from the 1980s? And liberals screaming over Halliburton during the Bush Presidency? SIGIR found Anham billed American taxpayers $900 for a $7.00 electric switch, and $80 for a $1.40 drainpipe. Where is the outrage? Or even media coverage? Why did the government ignore contracting irregularities and then award the same company billions in new contracts?
There seems to be a pervasive ‘I can get away with it’ attitude for individuals and companies who feel protected by the Obama Administration and Camp Clinton. Perhaps it is time for “the most transparent administration in history” to look a little closer, and for taxpayers to demand they adhere to the objective, non-political standards of military contracting.
Kerri Toloczko is a Senior Fellow at Frontiers of Freedom, a public policy institute dedicated to promoting individual freedom, limited government and free enterprise.