The Washington PostDemocracy Dies in Darkness

Lawsuit: Big Pharma funded terrorism in Iraq with payments to corrupt health ministry

Followers of Shiite cleric Moqtada al-Sadr chant anti-government slogans and waved Iraqi flags during a protest in Basra on March 19, 2012. (Nabil al-Jurani/AP)
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In the first years following the defeat of Saddam Hussein, there were few dark corners of battle-scarred Iraq less hospitable to Americans than the country’s ministry of health.

The walls of the ministry, headquartered in a dilapidated high-rise in eastern Baghdad, were covered with hundreds of photos of scowling Shiite clerics. Banners proclaimed “Death to America and Israel” and “we must destroy the occupiers.” Death squads commandeered the ministry’s ambulances for missions to hunt Sunnis. Assault rifles were stacked in offices. The morgues were used for torture. Everywhere flapped the flag of the Jaysh al-Mahdim, also known as the Mahdi Army, the Shiite militia controlled by the radical anti-American cleric Moqtada al-Sadr.

The government office was so thoroughly infested that in 2007 Gen. David Petraeus, then in command of U.S. forces in Iraq, admitted Sadrists had “effectively hijacked the Ministry of Health.”

And yet at the same time, American and international pharmaceutical companies were regularly doing business with it.

A lawsuit that has just hit the federal court system claims that these drug giants were not only filling purchasing orders but offering substantial kickbacks and free medication, all while knowing they were in business with a group of terrorists engaged in violence against U.S. interests and Americans. Such payments, the lawsuit claims, were violations of the Anti-Terrorism Act.

The 203-page suit, filed in the U.S. District Court for the District of Columbia on behalf of 108 plaintiffs, seeks to hold the corporations responsible for the deaths and injuries of U.S. service members between 2005 and 2009.

The corporate defendants include subsidiaries of the largest medical brands in the world: AstraZeneca, General Electric, Johnson & Johnson, Pfizer and Roche. The businesses “obtained lucrative contracts from that ministry by making corrupt payments to the terrorists who ran it,” the complaint argues. “Those payments aided and abetted terrorism in Iraq by directly financing an Iran-backed, Hezbollah-trained militia that killed or injured thousands of Americans.”

The complaint is heading into uncharted legal territory. Last year, Congress expanded the provisions of the Anti-Terrorism Act to allow for such suits. The updated statute specifies that the violence must have been committed by a group specifically designated by the secretary of state as a “foreign terrorist organization.” The Mahdi Army was not so designated, but Hezbollah was and still is.

The lawsuit claims a corrupt relationship between Big Pharma and Iraq stretches back to Saddam Hussein’s iron rule.

The fall of the Hussein regime created a scramble within the country between sects vying for a foothold in the new government. By early 2004, Sadrists had grabbed key positions in the ministry’s bureaucracy. “Sunnis and secular technocrats alike were purged in what one percipient witness describes as a widespread ‘occupational cleansing,'” the lawsuit says. “Doctors who exhibited insufficient loyalty to the Sadrists were killed or forced to flee.”

One Iraqi hospital worker told CBS News in 2006 that more than 80 percent of the original health care staff in one Iraqi hospital had been removed and replaced with Sadr loyalists.

“It’s going to get worse because there is no control and no accountability,” the worker told the network. “No one can stop them.”

A year later, Kenneth Katzman, a Middle East expert, testified at a congressional hearing that Sadrists were attempting to segregate the health care system by gender, “with doctors treating only patients of the same gender.”

At the same time, there was a great amount of money at stake in the post-Hussein Iraq for companies. The lawsuit points to one study showing that between 2006 to 2011, the “Iraqi pharmaceutical market experience a 17 % compound annual growth rate — making it the fastest-growing market in Eastern Europe, the Middle East, and Africa.”

In 2004, the ministry’s Sadrist leaders “implemented a requirement that medical goods suppliers seeking” contracts with the ministry pay a religious tax “worth at least one-fifth the contract’s value.” One way companies paid the tax, according to the lawsuit, was by offering the ministry “free goods,” or “additional batches of in-kind drugs and equipment, free of charge, on top of the quantities for which MOH had actually paid.”

These extras, in turn, were sold by Sadrists on Iraq’s black market at a considerable markup. The Mahdi Army, in fact, became known among U.S. government personnel as the “Pill Army.” The cleric often paid his fighters in medical supplies and pharmaceuticals, which they either resold or ingested as intoxicants, the lawsuit says. These included antipsychotic drugs, birth control medication and cancer drugs.

Both the bribes and resales provided a cash flow feeding “directly into Jaysh al-Mahdi’s coffers and helped the militia buy weapons, training, and logistical support for its terrorist attacks,” the lawsuit claims, attacks that “likely killed more than 500 Americans and wounded thousands more.”

In 2011, Johnson & Johnson entered into an agreement with the Department of Justice to pay $70 million to resolve allegations of unlawful payments in a number of countries, including Iraq. General Electric resolved allegations leveled by the Securities and Exchange Commission involving Iraq kickbacks with a $23 million payment in 2010.

Johnson & Johnson, AstraZeneca and Roche have yet to publicly comment on the lawsuit. A spokesperson with General Electric told the Financial Times the company was reviewing the lawsuit. A Pfizer representative denied any wrongdoing to the Times as well.

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