The U.S. Department of Agriculture is investigating possible overcharges and kickbacks on sales and shipments of grain and other commodities to Jamaica, USDA's office of inspector general disclosed yesterday.
Agriculture Department investigators are probing whether illegal commissions and shipping charges were added to Jamaican grain purchases that were subsidized by the U.S. government.
The department investigation was started after The Washington Post disclosed that apparently unnecessary commissions on Jamaica's grain purchases were paid to the Swiss bank account of a Belgian firm and that the shipping agent representing Jamaica hired a shipping company in which he had a financial interest to haul Jamaica's imports.
The Post articles, based on documents detailing the transactions, involved grain purchased on the commercial market by the Jamaican government.
The Agriculture Department has no jurisdiction over commercial grain exports but polices the government-financed Food for Peace program -- widely known as Public Law 480 -- and other indirect U.S. subsidies on food exports.
Since 1977 when the Carter administration changed policy and sought to warm relations with Jamaica's socialist government, the country's grain shipments under P.L. 480 have increased from $2.5 million a year to $12 million.
Last month, the Jamaicans fired two officials in charge of the nation's grain imports, Dexter Rose, managing director of the State Trading Corp., and Sedley K. Pyne, head of the Washington office of Jamaica Nutritional Holdings, a government grainbuying service.
Rose and Pyne were removed on charges of violating Jamaica's currency regulations, which prohibit Jamaican citizens from maintaining foreign bank accounts without special permission.
The two men were fired after documents were sent anonymously to Jamaican and U.S. government agencies and news organizations linking the two to foreign bank accounts and phony companies allegedly used to receive kickbacks.
The Washington Post's investigation and other documents showed that Rose and a Liberian corporation he formed called Young & Wilcox apparently received more than $32,000 in 1975 and 1976 from Agrobulk Shipping Corp., which shipped grain to Jamaica. Agrobulk was hired by St. John International, a Washington shipping brokerage headed by Harry J. Smith Jr. Smith was an "indirect share-holder" of Agrobulk, but Jamaican government officials said they did not know that.
Jamaican officials said they were also unaware that $150,000 in commissions on their grain purchases was paid by Continental Grain Corp. of New York to the Swiss account of Agrocom International Ltd. Continental executives later told the Jamaicans that St. John International arranged the payments to Agrocom.