The head of the company that feeds American troops in Afghanistan has been charged in federal court with violating sanctions against trade with Iran, along with other offenses.
The federal indictment charged Abul Huda Farouki, 75, a Jordanian-American and wealthy philanthropist from Virginia with longstanding ties to Bill and Hillary Clinton, with conspiracy to commit money laundering, violating sanctions against Iran, and fraud. The charges are in connection with more than $8 billion in contracts held by his company, Anham FZCO, to provide food and other logistical support to American troops in Afghanistan.
The charges involving Anham make a series of legal cases against the three major food service companies serving American troops in Afghanistan since 2005.
Also charged in the case were Mr. Farouki’s brother, Mazen Farouki, 73, owner of a closely associated company, and Salah Marouf, 71, who owned a company that did business with the Farouki brothers’ firms. Both are also American citizens. All three were indicted last Thursday in United States District Court in Washington, and each was released on $50,000 personal recognizance bail.
Mr. Farouki’s lawyer, Adam Hoffinger, issued a statement disputing the criminal charges, saying they were “at most a regulatory infraction, and one which Mr. Farouki and his company, Anham, voluntarily disclosed to the government long ago.”
Mr. Hoffinger’s statement went on to say that Anham had saved the United States government $1.4 billion with its current food services contract.
“It replaced an earlier contract that the United States government had with another company that pleaded guilty to fraud against the United States, including overbilling,” he said.
After Anham won the food services contract in Afghanistan in 2012, the previous contractor, Supreme Group, complained that Anham was undercutting Supreme by, among other things, saving costs by shipping through Iran. Supreme Group later itself pleaded guilty to inflating prices on goods to Afghanistan in 2012. Another food service company, Agility, had been banned from renewing its contract in 2009 after an indictment for fraudulent accounting.
John N. Sopko, the special inspector general for Afghanistan reconstruction, said the case began with information from an unidentified whistle-blower four years ago.
“We’ve been following this for a long time,” he said.
In all, the inspector general’s agency has won convictions of 132 people, mostly contractors in Afghanistan, as of October. Mr. Sopko asserted that corruption among American contractors has undercut efforts to fight the serious corruption problems in the country already.
“We just poured so much money into the country we contributed to the corruption problem, we were like throwing fuel on the fire,” Mr. Sopko said.
Other officials at his agency credited a 2013 article in The Wall Street Journal with prompting the investigation. The article detailed Anham’s efforts to circumvent Iranian sanctions and save on costs by shipping through Iran, and it was based on internal emails from Anham. At the time, the Pakistan border was closed and the alternative of shipping through Central Asian countries was much more costly.
According to a statement from the Department of Justice, Mr. Farouki and his co-defendants saved money on their supply contracts by shipping through Iran and then denied having done so to the Department of Defense after they became aware The Journal was about to publish its article, which also appeared based on information from a company insider. The company maintained a subcontractor was responsible, unknown to Anham’s senior managers, according to the government’s indictment.
The indictment also says that Mr. Farouki’s company pretended to build warehouses required by its $8 billion “prime subsistence vendor” contract, photographed the buildings under construction to show to the government, then disassembled them.
Mr. Farouki was close to the Clintons and was a major contributor to the Clinton Foundation and other Democratic causes. He was also the chairman of the board of the American University of Afghanistan, which is funded by the United States government, until Nov. 26, according to a spokesman for the university, who suggested Mr. Farouki’s resignation had nothing to do with the Nov. 29 indictment.
Anham had previously been criticized by inspectors in Iraq for overbilling the Defense Department for services there.
Mr. Farouki is also listed on the website of the School of Foreign Service at Georgetown University, which educates many future American diplomats. The university’s media relations office did not immediately reply to a request for comment on his role there.
Mr. Hoffinger, the attorney, said of his client, Mr. Farouki, “He is a longtime philanthropist and prominent businessman and has never before been accused of a crime. He never intended to, and did not commit, any crime.”
The Anham company, which is based in the United Arab Emirates, still has the Pentagon’s main food contract in Afghanistan and is not charged in the case. Mr. Farouki’s biography was recently removed from its website. A company official did not immediately respond to inquiries about his current status there.