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Iraq Contract Goes to Firm with links to Chalabi, Pentagon

by Pranjal Tiwari

A firm founded in 2003 for the express purpose of obtaining Iraq reconstruction money may have won some large contracts through ties to Washington's once-favorite former Iraqi exile.

May 31, 2004 – A US-based company with close links to members of the Iraqi Governing Council has been re-awarded a lucrative supply deal by the US Army.

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Virginia-based Nour USA was originally granted a $327 million contract to supply the new Iraqi military and Civil Defense Forces in January, according to New York Newsday.

That decision was soon put on hold, however, after officials in Spain and Poland, as well as a rival company, questioned the US’s motives in giving the contract to an American firm. The Washington Post reported in February that the complainants cited Nour’s extraordinarily low bid and lack of experience in the field as cause for suspicion regarding the "credibility" of the deal.

According to Reuters, however, the decision to grant the contract to Nour was upheld last week following a government review. A press release by the US Army Tank-automotive and Armaments Command (TACOM) elaborated that the current contract is now worth $260 million, somewhat less than the original January deal. TACOM says the materials supplied by Nour would be used by Iraqi and "associated" armed forces, "in support of" the US-run Coalition Provisional Authority (CPA), which is scheduled to dissolved after transferring limited sovereignty to an interim Iraqi government on June 30.

Court documents show that Nour USA’s president, Abdul Huda Farouki, has close ties to Iraqi Governing Council member Ahmed Chalabi. Until recently, when Washington withdrew its backing of him, Chalabi was highly regarded by the White House, and was considered to be the Bush administration’s favorite for installment as Iraq’s next leader.

Allegations of corruption and favoritism emerged when several business deals made after the invasion were awarded to Chalabi’s friends and associates, the Los Angeles Times reported in November 2003.

Nour has been directly involved in some of the most controversial of these deals. Newsday reported in February that Chalabi received a $2 million "fee" for helping to arrange an $80 million contract to provide security for Iraqi oil pipelines, awarded last August to the mercenary firm Erinys International. Chalabi subsequently denied the allegation, but admits he considers Farouki a "friend." The Newsday report says that "within days" of being granted the contract, Erinys became a joint venture operation with Nour.

CorpWatch, a San Francisco-based watchdog group, reports that Nour, which was incorporated just a year ago, is a joint venture between Farouki and Ghiath Sukhtian of the Jordanian Munir-Sukhtian Group. According to a news release from the organizers of the Rebuild Iraq 2005 exhibition, Nour "was set up specifically to bid for business in post-war Iraq." Nour’s website says the company’s "partners" were looking for ways to invest and operate in Iraq even during the invasion, and its operatives were in Baghdad and Washington setting up investment opportunities shortly after the occupation began.

Nour currently runs an "Iraq Investment Initiative" to encourage foreign firms to enter the country. It also claims to have bought more than 20,000 square feet of commercial and residential properties in Baghdad for its operations in the Iraqi capital, where it says it employs over 100 people.

Though Pentagon officials have denied that Chalabi’s links to the Pentagon had anything to do with the deal, Nour is just one recent example of companies with ties to Washington and its allies that has benefited financially from the occupation. For example, Vice President Dick Cheney’s former company, Halliburton, revealed last month that its quarterly revenue had increased by 80 percent as a result of US government contracts in Iraq.

In March, the Parsons Brinkerhoff company, a subsidiary of which was formerly headed by the current director of the program management office for the Pentagon in Baghdad, was also awarded part of a $43.4 million contract to help manage reconstruction of Iraq's electricity grid, according to the Associated Press. And last month several weapons makers posted massive first-quarter profits partially attributed to the invasion of Iraq and the so-called "War on Terror."

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The NewStandard ceased publishing on April 27, 2007.

Pranjal Tiwari is a contributing journalist.

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