War Zone Food Fraud?

Every month tens of thousands of cases of steak, chicken wings, lobster tails and egg rolls are delivered to U.S. troops in Iraq - costing U.S. taxpayers tens of millions of dollars.

Now Justice Department investigators are said to be digging into hundreds of millions of dollars in deals made by major U.S. companies that supply the military with food, CBS News chief investigative correspondent Armen Keteyian reports.

The "large and active" fraud and corruption case reportedly focuses on:

  • Whether companies such as Perdue Farm, Sara Lee, and Con Agra set unusually high prices when they sold their goods to the Army's prime food contractor for the war zone.

  • Whether or not that contractor, Public Warehousing Co., improperly pocketed so-called "refunds" from these suppliers.

  • And what role, if any, current and former Army officials played in a possible kickback scheme involving Public Warehousing, known as PWC, and some of its vendors.

    Attorney Alan Grayson has filed dozens of lawsuits against military contractors, including PWC. Based in Kuwait, PWC reportedly receives more than $1 billion a year to feed troops in Iraq. It has denied any wrongdoing, and says it has received positive reviews from government officials.

    But in April Tyson Foods, one of the world's largest chicken producers, sent this letter to the Pentagon complaining about "the appearance of personal favoritism" in selecting suppliers.

    Sources tell CBS News that such complaints - dating back to late last year - may well have sparked the investigation - one of 78 such criminal probes of $5 billion in contracts now under review.

    • Armen Keteyian

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