Company Charged in $8B Troop Food Fraud

Kuwaiti Vendor Paid to Distribute Food Faces Fraud Allegations

(CBS/ AP)  (CBS) A company paid more than $8 billion by the United States military to feed soldiers in Iraq, Kuwait and Jordan has been charged with fraud.

Public Warehousing Company, a Kuwaiti company now known as Agility is alleged to have overbilled the United States in its contract to distribute food to soldiers. CBS News reported on the ongoing investigation two years ago

"This indictment is the result of a multi-year probe into abuses in vendor contracts in the Middle East involving the illegal inflation of prices in contracts to feed our troops," said Criminal Chief F. Gentry Shelnutt, the current Acting U.S. Attorney for the case.

Agility/PWC is scheduled to appear in federal court in Atlanta, Nov. 20.

The company issued a statement in response to the Justice Department charges, "An indictment is merely an allegation. PWC [Agility] is confident that once these allegations are examined in court, they will be found to be without merit." The company denies all wrongdoing adding that it has, "long cooperated with government reviews, inspections, audits and inquiries necessary to ensure taxpayer dollars are being spent appropriately."

Agility/PWC has had close ties to the Pentagon over the years. In July 2008, Dan Mongeon a former Army general who ran operations at the Pentagon’s Defense Logistics Agency became the President and CEO of Defense and Government Services for Agility/PWC. The company has billions of dollars in contracts with the Pentagon.

It’s unclear whether or not the fraud charges against Agility/PWC will affect the company’s other government contracts. Earlier this month, Agility/PWC signed a $50 million food contract with US AID.

[digbyj]

Agility had a reach and ability to get things done in a very imperfect and dangerous part of the world. A local US food distributor cannot navigate those parts and take as many risks with employees and with capital as an entity like an Agility can or will. They cannot simply be fired from the contracts. Doing so would leave many soldiers without the means of getting food. Agility is depended upon, for better or worse. PWC and cohorts got very greedy but there was lacking oversight for sure. Part of why there was so much leeway is that as a means of feeding the troops amidst dangerous circumstances without other infrastructure and competition they were so NEEDED. Having a foreign entity take care of foreign soil feeding during warlike circumstances is not as surprising as having a foreign company ( Sodexho) take care of US marines bases within the US. Nobody should be deleriously happy about American foodservice distributors either--- Syscos and US Foodservices have taken non disclosed rebates during the months and years of their domestic troop feeding contracts. What is required is to have a human being in government answerable ---just one who will watch, listen and ask to prevent these types of occurances and care enough to correct the issues as they happen. With something like this,many people knew it was going on. What is needed is a corruption czar for government contracting.

[jsf14]

In Jordan? US troops in Jordan?

[mjlewis6]

Corporations should NOT have the same rights as people. Were the corporate officers ALL arrested and in custody, the answers would be quick and decisive as under criminal law. No sense in letting them do business in other areas UNTIL this is resolved, right? That is what happens in a criminal proceeding when an individual is arrested. All else is put on hold. The immediate effect of this kind of process would STOP abuses at the top and we need more whistleblower protections for others who indicate where the abuses start. Convictions for these kinds of abuses should END the career of individuals as well as corporations with these kinds of crimes.

[melchg07]

Just tack this onto the $2 Trillion + that they US military has "lost/misplaced" over the past number of years.

The GOP love to beat down the Domestic Government for being wasteful but yet continue to complain when ever it is suggested some fat is trimmed from the military......and military contracts are by far the biggest sources of fraud.

I wish I had $2 Trillion I could simply misplace.

[Observer1504]

Many years ago the Army that I was in purchased its food from AMERICAN sources. American troops cooked the food in mess halls .. and American troops pulled KP clean up. We also guarded our own bases ... did our own security for convoys. Get rid of the contractors, they have licences to steal.

[hasty1695]

In the new modern army,all troops are deligated to other combat and support duties. The army is trim we would have to start the draft again to support all the duties that the civies do!!!!!!!

[mgkonyx]

An American taxpayer is terrorized by the IRS for underpaying his/her taxes by a thousand dollars, but a *foreign* corporation can overcharge the US government billions of dollars and continue to keep contracts worth millions of dollars. The US government claims to have no money for healthcare for poor American children, but the American Department of Defense continues to pay billions of dollars to companies for poorly constructed facilities (or, in one case, for buildings that were never constructed). The time has come for some real accountability, but our Congress is afraid of "big government".

[jeff-fla]

If we are going to give out contracts. Why didn't it go to an AMERICAN company to feed our AMERICAN troops. Just think, to create an AMERICAN job or two. They can't find 8 billion, but to give kids health insurance that was only 5 billion and that was to much. They would rather kill than cure.

[lakota2012]

Shocked! I am simply shocked that there have been any abuses, fraud or waste in the "defense" budget black hole, especially during the bush years of endless warmongering and no-bid contracts in the military/industrial complex of war profiteers.

[thesevenveils]

Maybe the US can get a Somalian ore Yemen contractor to out source our troops. Somalia and Yemen are hurting for jobs and most of the male population is proficient with AK-47s and RPGs.

How much can the US save if it outsources its troops?

[tigerrram9]

Remember the a Former Military General was was the CEO for the company.

[hasty1695]

Don't just blame bush; go all the way back before w.w.1 !!!!!!!!!!

[hungry1968-17]

Keep outsourcing all of the military's jobs to private contractors, and this is the end result.

[ianlou]

So this is the Thanks we get for saving Kuwait during the Gulf War?

Lets ask Richard (The Dick) Cheney what he knows about this.

[Stop_the_crying]

I can't figure out how KBR/Halliburton missed the contract. Some ones head will roll. Unless they can blame a Democrate.

[bill0bob]

Way to go, Little King Georgie! Privitization really works! (for our enemies, that is!) Outsourcing is good! --NOT!

[bubbadubba]

Another Bush connectiona and example of corruption exposed.
This is only the tip of the iceburg.
Now does everyone understand why we are in two wars?
$$$$$$$$$$$$$$$$$$$$$$$

[louiville35]

Hmmm, I wonder if that falls under the "False Claims Act".

That and where were the people doing oversight?

[rharrin1]

That and where were the people doing oversight?

Don't you remember the bush policy of smaller government?

Besides it's harder to steal when people are looking over your shoulder.

[ObamaYoMama]

The largest shareholder of its parent company - named Khalid Sultan - has been linked to the terrorist organization Revival of the Islamic Heritage Society known as RIHS.

Big surprise!!

[jtdev1]

gotta keep the terrorist well funded in order to keep this war thingy going...

No Bid Contracts???