President Trump arrived at this year’s NATO summit in Brussels with a clear message — Pay up or pay the consequences. His tough stance has already delivered results. NATO allies have committed themselves to bolstering their defense spending by 4.3 percent over the course of 2018.
For too long, foreign leaders have treated U.S. taxpayers like a piggybank when it comes to defense spending. Perhaps the only shortcoming in the President’s approach was his decision to limit his message to Europe alone.
Across the globe, America has been carrying the weight in what have become fundamentally unequal alliances. Nowhere does this ring truer than in the Mideast.
In Kuwait alone — where the U.S. has maintained 20,000 troops and established itself as a key security ally — American firms invest more than $2 billion a year. And what do we get in return? Prominent Kuwaiti business leaders that defraud our military of millions of dollars, and a high-ranking Kuwaiti government official who could cost U.S. taxpayers millions more.
This story goes all the way back to 2005. That’s when it was first discovered that Agility, a Kuwaiti logistics company with strong ties to Kuwait’s government, apparently committed major fraud against the U.S. Department of Defense.
At the time, Agility held an $8.6 billion contract for supplying food to U.S. soldiers fighting in Iraq. By overcharging the U.S. on that contract, Agility was able to pocket tens of millions of dollars. In 2009, the Justice Department (DOJ) handed down a scathing criminal indictment. Agility lost its food contract and was prohibited from bidding on any new DOD contracts until the case was resolved.
Fast forward to 2017, when Agility finally agreed to a settlement with the U.S. government. They agreed to pay $95 million in penalties and were allowed to bid on DOD contracts again. And they’ve begun to do so aggressively, recently winning a Defense Logistics Agency contract worth up to $162 million to provide fuel services in Guam.
Meanwhile, Sheik Yousef Abdullah Sabah, a prominent member of the Kuwaiti royal family has been working to undermine one of Agility’s biggest competitors: a long-time contractor for the U.S. called KGL, which took over a number of Agility’s prior contracts.
As head of the Kuwait Port Authority — the powerful entity which controls access to Kuwait’s maritime points of entr — Sheik Yousef has blacklisted KGL from loading and unloading supplies at Kuwaiti ports.
This strange decision is already interfering with U.S. military operations in the Gulf.
The U.S. Army had to re-bid a $26 million contract with KGL and go with a more expensive contractor, wasting taxpayer dollars. But the biggest impact may be still to come. KGL was recently awarded a $1.3 billion contract for food distribution, the same contract Agility performed prior to being indicted.
If Sheik Yousef continues to interfere with KGL’s ability to perform this contract, the U.S. may again be forced to contract with another operator, which could unnecessarily waste nearly $200 million in American taxpayers’ money.
Kuwaiti courts have already ruled that this blacklisting is illegal and ordered the Port Authority to pay KGL more than $80 million in damages. But so far Sheik Yousef has all but ignored the ruling and continues to prevent KGL from providing support to the U.S. military.
As KGL’s biggest competitor, it appears that Agility may benefit the most from this effort to undermine fair and competitive contracting by the United States. And so far, the Kuwaiti government has allowed Sheik Yousef to keep his position and operate with relative impunity.
It’s time for our so-called allies in the Gulf to treat the U.S. military and American taxpayers with respect. President Trump should make it clear that our military and economic aid is contingent on cooperation, transparency and respect on all fronts.
If Kuwait continues to support companies and officials that would undermine the United States, we should consider pulling our support from Kuwait.
Drew Johnson Drew Johnson is a senior fellow at the National Center for Public Policy Research. To read more of his reports — Click Here Now.
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