December 2, 2008
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Food Companies Face U.S. Probe Over Iraq Deals

Date: 10-18-2007
Type: news brief
Categories: Business Ethics / Finance
Source: Wall Street Journal
Organization:
Wall Street Journal
Some American food companies are under scrutiny in a federal probe of possible fraud and corruption in the military's food-supply operations for the Iraq war.

Investigators from the Justice Department and the Defense Department are looking into deals that Perdue Farms Inc., Sara Lee Corp., ConAgra Foods Inc. and other U.S. companies made to supply the military, according to people involved in the inquiry. The companies made the deals with the help of former U.S. military procurement officials they hired as consultants or executives.

The inquiry is focused on whether the food companies set excessively high prices when they sold their goods to the Army's primary food contractor for the war zone, a Kuwaiti firm called Public Warehousing Co. A related question is whether Public Warehousing improperly pocketed refunds it received from these suppliers. Public Warehousing bought vast amounts of meat, vegetables and bakery items from the food companies, and delivered them to U.S. troops.
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