A Kuwait-based company soon to be responsible for feeding thousands of U.S. troops in Iraq and Syria has become embroiled in a legal and political crisis that threatens to derail a long-troubled military food supply program.
On Thursday, Kuwait and Gulf Link Transport Co., known as KGL, is scheduled to take over a $138 million-a-year contract to provide food and water for U.S. troops stationed in Kuwait, Iraq, Syria and Jordan. For months, the Defense Department has been placing food orders with KGL and transferring authority away from the previous supplier, a Dubai-based company called Anham.
But KGL’s ability to take over the food supply effort has been called into question by a prolonged dispute with Kuwaiti government officials, as well as a successful lawsuit brought in the United States by a competitor. KGL faces looming eviction orders that threaten to remove it from public warehouses in Kuwait. A long-running embezzlement scandal landed two of the company’s former executives in prison, prompting a global lobbying blitz that includes nine Washington lobbying and public relations firms and a slew of politically connected people.
And a recent court decision “permanently restraining and enjoining” the Defense Department from moving forward with KGL could further complicate matters, as agency officials look for a way to comply with the court order while ensuring troops receive food and water.
The challenges KGL faces illustrate how the U.S. military has struggled to find suitable partners on the ground in its long-running wars in Iraq and Afghanistan. At least three previous corporate recipients of the food supply contract — a multibillion-dollar program called Subsistence Prime Vendor — have been accused of stealing U.S. taxpayer dollars on a massive scale.
Last year, Anham was temporarily suspended after three executives were charged with building a fake construction site to mislead government inspectors, part of a litany of fraud charges brought by the Justice Department. An attorney for Anham noted the company has since been declared “a responsible contractor” and cleared to fulfill existing contracts and pursue future awards.
Companies that handled food supply in Afghanistan and Iraq have paid more than $500 million to resolve civil and criminal charges, largely related to allegedly unfair pricing.
KGL defended its record in a statement to The Washington Post and encouraged the Kuwaiti government to resolve the dispute.
“We trust that the Kuwait government, which values its relationship with the U.S. military, will fully support the Department of Defense’s selection of KGL Food Service to deliver food to U.S. troops in the region and avoid driving up the cost to the U.S. military by limiting competition to [Kuwait government]-favored contractors,” the company said.
The fierce competition for military food funding is one focus of a wide-ranging lobbying campaign covering human rights issues stemming from the embezzlement prosecution of the two former KGL executives: Saeed Dashti and Marsha Lazareva.
KGL Investment (KGLI) — a private-equity firm spun off from KGL in 2006 — has been pouring resources into Washington’s lobbying establishment, hoping to pressure Congress and the White House for support. It has asked for sanctions against powerful Kuwaiti officials, seeking to relieve pressure on Dashti and Lazareva.
Representatives for Dashti and Lazareva say the charges are false.
Those stumping for KGL Investment include Neil Bush, a son of George H.W. Bush; Cherie Blair, a human rights lawyer and wife of former prime minister Tony Blair of Britain; a former FBI director; a former U.S. secretary of veterans affairs; and eight Washington lobbying and public relations firms, records show.
Lobbyists and a spokesman representing both KGLI and KGL say the two companies are no longer connected.
Dashti, one of the former executives in prison in Kuwait, served as the chairman of KGL in 2017. Dashti also helped raise money for KGL Investment while he worked for KGL, according to court affidavits from individuals who worked for KGL Investment between 2006 and 2009.
Also, some U.S.-based lobbyists are representing both companies, including R. James Nicholson, a former ambassador to the Vatican and former head of the Department of Veterans Affairs.
This year, KGLI registered as a foreign agent under the Justice Department’s Foreign Agents Registration Act, reporting that it was hiring public relations firm Marathon Strategies for $18,500 a month to raise the issue of “unjustified actions by the State of Kuwait, including the Kuwait Port Authority,” against KGLI. The Kuwait Port Authority is a government agency that controls the ports there.
The Port Authority accused Crowell & Moring, a Washington law firm that represents both KGL Logistics and KGL Investment, of “maliciously disparaging Kuwait’s reputation internationally.”
“As part of this effort, they have bizarrely tried to threaten a number of senior Kuwaiti officials — including Kuwait’s Attorney-General, and the Director-General of Kuwait Ports Authority — with sanctions under the US Magnitsky Act,” the Kuwait Port Authority wrote in a recent news release.
The company’s lobbyists are hoping that President Trump will get involved. KGLI has tapped former Florida attorney general Pam Bondi, with the lobbying firm Ballard Partners, who has been a close political ally of Trump and served as a member of his transition team. Most recently, she has backed Trump’s reelection campaign and has appeared at a Women for Trump event in Florida.
In comments to The Post, Nicholson and Bondi said their lobbying is meant to benefit Lazareva, who is confined to Kuwait after being released on bail. They say the charges against her are phony and politically motivated.
“I went to Kuwait and met Marsha’s amazing young son who was tragically separated from his mother for over a year while she was falsely detained,” Bondi said through a spokesman. “Now Kuwait will not allow Marsha to leave the country to bring her American son to the U.S. to begin pre-kindergarten. This family has been through enough, and this outrage must end.”
Nicholson said he is working to defend “an innocent Christian mother of a 4-year-old boy,” adding that Lazareva “spent 474 days in a Kuwait prison on false charges.”
They are hoping Trump will raise the issue with the emir of Kuwait at a planned White House meeting, according to people familiar with the lobbying efforts who asked to remain anonymous so they could speak freely. According to the Associated Press, the emir was scheduled to meet with Trump on Thursday but rescheduled the meeting after being admitted to a hospital.
Ali Dashti, chairman of KGL, reserved a room at the Trump International Hotel in downtown Washington in October 2018, according to a list of VIPs staying at the hotel that was obtained by The Post. The listing indicated Dashti was a repeat Trump customer.
The lobbying campaign has played directly into an ongoing spat between KGL and the Kuwait Port Authority.
U.S. lobbyists hired by KGLI are pursuing sanctions against Sheikh Yousef Abdullah al-Sabah, a member of the Kuwaiti royal family who is director general of the Port Authority. He was among six Kuwaitis included in a pair of letters addressed to Treasury Secretary Steven Mnuchin in which Sen. Roger Wicker (R-Miss.), Rep. Steve Chabot (R-Ohio) and Rep. Madeleine Dean (D-Pa.) asked for an investigation under the Global Magnitsky Act, a first step in imposing sanctions.
In a statement published in late August — and directly citing the U.S. lawmakers who sought sanctions — the Port Authority accused KGL of “illegally usurping public lands” and working with U.S.-based lobbyists to “attack the Kuwaiti government itself.” The Port Authority has separately tried to “blacklist” KGL, bringing eviction actions that are pending in Kuwait’s courts.
KGL fired back days later in a newspaper advertisement, accusing an unnamed competitor of working with the Port Authority to employ “aggressive and malicious media press releases” designed to “defame” its trade reputation and harm its contracts with the Defense Department.
The back-and-forth in Kuwait could complicate the Defense Department’s ability to move forward with the food contract.
In late August, a U.S. federal judge issued an order “permanently restraining and enjoining” the Defense Department from continuing with transition activities, although it provided an exception for “solutions designed to ensure the continuous availability of supplies.” The reasoning behind the ruling is under seal.
Anham, the current contract holder, said through an attorney that its “primary focus continues to be providing critical services to the US Government and the warfighter and it is prepared to continue to provide the services on an interim basis, or compete for any temporary award, as the process proceeds.”
The Defense Department has awarded KGL a temporary, four-month contract to supply food for troops in Iraq, Kuwait, Jordan and Syria, a Defense Department spokesman said Wednesday. The “bridge contract” is designed to make sure troops are fed while the Defense Department looks for a more permanent solution.
“We remain committed to ensuring U.S. troops deployed in the region are fully supported,” department spokeswoman Michelle McCaskill said in a statement.
And an even larger opportunity is on the horizon for KGL and its competitors. The Defense Logistics Agency is searching for a food supplier for Afghanistan, where roughly 14,000 U.S. service members are still deployed.
David A. Fahrenthold contributed to this report.