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Ralph R. Reiland: Bankrolling U.S. troops' killers?

| Sunday, Nov. 5, 2017, 9:00 p.m.

I remember when Johnson & Johnson was a nice, big American company selling warm-hearted products like baby powder.

Now the company, along with several of the other largest U.S. and European medical companies — including Pfizer and GE Healthcare — is targeted in a federal lawsuit. Families of dozens of U.S. troops killed or injured in Iraq allege that J&J and the other companies knowingly financed the anti-American Mahdi Army militia.

The lawsuit “claims the companies regularly paid kickbacks to officials in Iraq's Ministry of Health through their local agents,” reports USA Today correspondent Aamer Madhani, previously a White House and Baghdad correspondent for that newspaper.

“Officials at the ministry in turn used the proceeds to help fund the militia that carried out attacks against U.S. troops in Iraq, the suit alleges,” Madhani says.

Following months of debate about Iraq's alleged weapons of mass destruction, the invasion of Iraq began in March 2003 with U.S. and British forces entering southern Iraq and other land, air and sea assaults.

“In the aftermath of the 2003 invasion, Iraq's health care spending surged,” reports Madhani, “and the Health Ministry's budget ballooned from $16 million during Saddam Hussein's final year in power to about $1 billion in 2004.”

Western companies seeking entry into the expanding Iraq market “were willing to pay kickbacks — billed as ‘commissions' or ‘free goods' — that amounted to as much as 20 percent of the value of a contract to ministry officials, the lawsuit alleges.”

The defendants also supposedly made illegal payments by promising after-sales support and services funded by giving money to their “local agents.”

The lawsuit says: “In reality, such services were illusory and functioned merely to create a slush fund the local agents could use to pass on ‘commissions to corrupt ministry officials.'”

The plaintiffs claim the companies' financial transactions aided and abetted the militants and thus violated U.S. anti-terrorism law.

“By 2005, the (health) ministry came under the control of loyalists of Muqtada al-Sadr, an Iranian-backed cleric,” explains Madhani, while “al-Sadr's political clout grew amid dissatisfaction among some Iraqis over the U.S. military presence.”

Al-Sadr's Mahdi Army backers “killed and injured hundreds of American troops in the years-long insurgency in the aftermath of the invasion,” Madhani notes.

The lawsuit claims the defendants “did not intend for the ‘free goods' provided” to the health ministry “to serve any legitimate charitable or medicinal purpose.

“It was widely understood in Iraq that the (ministry) operated more like a terrorist organization than a legitimate health entity,” the lawsuit says.

In 2007, Madhani writes, global intelligence firm Stratfor, which provided briefings to several of the companies named as defendants, reported that “U.S.-led forces in Iraq had arrested the then-deputy health minister for ‘selling health services and equipment in return for millions of dollars that he later funneled to Shiite militias.'”

Ralph R. Reiland is associate professor of economics emeritus at Robert Morris University and a local restaurateur (rrreiland@aol.com).

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