Senators want probe of contractor for possible Iran sanctions violations

The Wall Street Journal

WASHINGTON—Two U.S. senators have requested that the Pentagon's inspector general broadly investigate a contract awarded to a Dubai company that the lawmakers believe may have violated U.S. sanctions by using Iran as a route to ship goods to Afghanistan.

Republican Sens. Mark Kirk of Illinois and Kelly Ayotte of New Hampshire said in a letter to the inspector general that Anham FZCO also may have conducted business with a port operator owned by Iran's elite military unit, the Islamic Revolutionary Guard Corps. The lawmakers asked whether the Pentagon should revoke Anham's contract to supply all food and water to American forces in Afghanistan—estimated to be worth at least $8 billion to the company—or levy a fine.

"We request that you urgently look into this matter, verify the recent public reports surrounding Anham, make recommendations on what to do with Anham's existing U.S. government contracts and propose steps the department should take to ensure this does not happen again," Mr. Kirk and Ms. Ayotte wrote in a letter dated Tuesday to Inspector General Jon Rymer, according to a copy viewed by The Wall Street Journal.

Anham said in a statement last month that it had voluntarily notified the Pentagon's Defense Logistics Agency and the Treasury's Office of Foreign Assets Control that its foreign contractor had moved some supplies for Afghanistan through Iran.

Anham, which has offices in Virginia, said last month it had launched an internal investigation to assess whether it broke any U.S. sanctions laws barring trade with Iran or shipments through the country. A spokesman for the company declined to provide further comment on Wednesday.

Anham built up large warehouses inside Afghanistan in 2011 and 2012 in order to win the Pentagon contract to service American forces there with food and water, the Journal reported last month. The company, according to internal emails viewed by the Journal, moved building equipment and tractors into Afghanistan using Iranian land routes coming from the port at Bandar Abbas.

Supply routes via Pakistan weren't available at the time because of a ban imposed by the government there in late 2011 after U.S. warplanes mistakenly attacked a Pakistani military base.

A spokeswoman for the Pentagon inspector general's office confirmed officials had received the letter from the lawmakers, but she declined to comment about any further investigation.

Anham's case represents the difficulties the U.S. military has faced in moving supplies to forces fighting in both Afghanistan and Iraq over the past decade. Both countries border Iran, and U.S. military personnel have acknowledged that Iran may offer the cheapest and quickest routes for moving supplies. But American sanctions ban such trade by American companies.

Mr. Kirk and Ms. Ayotte in their letter focused on Anham's use of Iran's Bandar Abbas port to move supplies to Afghanistan.

The U.S. Treasury has sanctioned Tidewater Middle East Co., the Iranian company that operates most of the Bandar Abbas facility, for being owned by the Islamic Revolutionary Guard Corps. The Treasury alleges the Iranian military unit has used Bandar Abbas to export arms.

Mr. Kirk and Ms. Ayotte, citing a Treasury fact sheet on Tidewater, wrote that shipments to the firms' facilities "provide an avenue of revenue" for the Revolutionary Guard.