Veterans & Widows Say Big Pharma Funded Terror in Iraq

WASHINGTON (CN) — Dozens of families of U.S. troops killed or wounded in Iraq sued some of the world’s biggest pharmaceutical companies Tuesday, claiming they paid millions of dollars in bribes to officials in Iraq’s Health Ministry for lucrative contracts, which financed the Iran-backed Shiite Mahdi Army.

The federal lawsuit, filed by the firms Kellogg Hansen Todd and Sparacino & Andreson, claims that industry giants — lead defendant Astrazeneca, Pfizer, GE Healthcare, Johnson & Johnson, Hoffman-La Roche, Genentech, Wyeth and others — knew that money from their bribes would finance the terrorist Shiite Mahdi Army, which killed and injured thousands of Americans in Iraq.

“After late 2004, companies selling medical goods to MOH were dealing with a counterparty that was not a genuine medical institution; it was a de facto terrorist group,” the complaint states, using the abbreviation for Iraq’s Ministry of Health.

The 203-page lawsuit claims the Mahdi Army used the money to fund militia attacks on U.S. troops, and worked closely with Hezbollah, a Lebanese political and military group that the U.S. designates as a terrorist organization.

To break into the Iraq market after the U.S. invasion in 2003, Western companies had to pay “commissions … an Iraqi euphemism for bribes,” worth 20 percent of a contract’s value, according to the complaint.

This was easily done by throwing in free drugs and equipment on top of orders the Iraqi Ministry of Health paid for, lead plaintiff Joshua Atchley says.

“Suppliers included those extra goods in the same shipments as the purchased goods and packaged them in a manner conducive to street resale, which ensured that MOH officials could efficiently take the extra goods and monetize them on the black market,” according to the complaint.

Many of those goods were made in the United States and their origins were memorialized in contracts with the Ministry of Health, often as a condition of obtaining the contracts, the complaint states.

A representative for Pfizer said the drugmaker “categorically denies any wrongdoing.”

GE meanwhile noted that it is still digesting the lawsuit: “GE became aware of the complaint today and we are thoroughly reviewing the allegations,” a representative for the company said in an email.

A spokesman for Hoffman-La Roche said the company had not been served and could not comment.

AstraZeneca and Johnson & Johnson did not immediately return emails seeking comment.

According to the complaint, the scheme originated during Saddam Hussein’s era, when the government took kickbacks from foreign suppliers on medical supply contracts under the U.N.’s Oil-for-Food program. Medical suppliers also funneled cash bribes through corrupt local agents, which created a slush fund from which “commissions” could be passed on to officials at the Ministry of Health, the lawsuit states.

The companies used these tactics from 2004 and 2013, after Saddam’s government collapsed and the Jaysh al-Mahdi, or Mahdi Army, took control of the Ministry of Health and ran it “more as a terrorist apparatus than a health organization,” according to the complaint.

It continues: “Public hospitals were converted into terrorist bases where Sunnis were abducted, tortured, and murdered. MOH ambulances transported Jaysh al-Mahdi death squads around Baghdad. Armed terrorists openly patrolled the halls of MOH headquarters in downtown Baghdad, which became too dangerous for Americans to enter and which one percipient witness described as a “Mahdi Army camp.’”

The plaintiffs say they have proof of the corrupt transactions.

“Plaintiffs have obtained specific evidence of many of defendants’ corrupt payments in connection with their MOH contracts, including documents memorializing such payments; contract numbers corresponding to defendants’ corrupt transactions; and particular percentages of ‘free goods’ that defendants delivered to MOH officials,” the lawsuit states.

The Mahdi Army used the bribe money to carry out its primary goal: expelling Americans from Iraq through a violence that killed at least 500 Americans, and wounded thousands, according to the complaint.

The 108 plaintiffs from 40 families, U.S. citizens whose family members served in Iraq from 2005 to 2009, say the defendants violated the Anti-terrorism Act by structuring their payments to Mahdi Army members and knowingly or recklessly disregarding their knowledge that the money would fund attacks on American servicemembers, planned and carried out by Hezbollah.

Ryan R. Sparacino, managing partner of Sparacino & Andreson, said in an email that the lawsuit is about accountability.

“This case is about the American lives destroyed because, as we allege, Johnson & Johnson, Pfizer, General Electric, AstraZeneca, and Roche made corrupt payments to terrorists in order to boost profits, regardless of the costs,” Sparacino said. “They should be held accountable.”

The plaintiffs seek compensatory and punitive damages for four counts of violating the Anti-Terrorism Act, including aiding and abetting, RICO conspiracy, terrorist financing and providing material support to terrorists, and intentional infliction of emotional distress.

In addition to the defendants named above, and their affiliates, defendants include Ethicon, Janssen Pharmaceutica, Ortho Biologics, and Pharmacia & Upjohn.

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