News Column

Pakistani Fertilizer Firm to Expand in US, Balks on Control of Bomb Materials

Jan. 28, 2013

Rowan Scarborough

The Pakistani corporation that has refused the Pentagon's urgent appeals to control the flow of explosive materials to bomb-makers who kill U.S. troops is expanding its fertilizer manufacturing into the United States.

And it is being done with the help of U.S. taxpayers through the municipal bond market.

The Indiana Finance Authority has approved $1.27 billion in tax-exempt bonds for Midwest Fertilizer Corp. to build a nitrogenous fertilizer manufacturing plant in Posey County. Midwest is a new startup company of the Fatima Group, a conglomerate headquartered in Lahore, Pakistan.

Fatima's fertilizer components are used by terrorists in Pakistan and Afghanistan to build homemade bombs -- the No. 1 killer of American service members in Afghanistan.

Fatima's corporate leaders know this is happening, based on communications with Obama administration officials and military leaders, but they have refused pleas to control the flow, according to an Army general.

Lt. Gen. Michael Barbero, who heads the Pentagon's Joint Improvised Explosive Device Defeat Organization (JIEDDO), bluntly criticized Fatima in testimony last month before a Senate panel.

He called Fatima "less than cooperative" in even instituting minimal controls on calcium ammonium nitrate, or CAN, a fertilizing compound that has been used in 70 percent of the homemade explosives deployed against U.S. troops.

Fatima is the only Pakistani producer of CAN, which is illegal to import into in Afghanistan.

Gen. Barbero said that nearly 1,900 Americans in Afghanistan had been killed or wounded by homemade bombs in 2012 at the time of his Dec. 13 testimony. He said the only sources for CAN are two Fatima Group plants in Pakistan.

In his testimony to the Senate Foreign Relations subcommittee on Near Eastern and South and Central Asian affairs, Gen. Barbero said:

"In 2011, I engaged the top leadership of Fatima Group, the producers of CAN in Pakistan, to urge their action in countering the illicit use of their fertilizer as an explosive through the implementation of several steps -- a dye program, better tracking and such -- but I also engaged the International Fertilizer Association and global fertilizer community to encourage the development of a whole-of-industry approach addressing the illicit use of their products.

"While the international and U.S. professional fertilizer associations are receptive and actively addressing these issues, the producers within Pakistan have been less than cooperative. Despite making minor packaging, tracking and marketing changes, they have not implemented any effective product security or stewardship efforts. I believe Pakistani-based CAN producers can and must do more.

"While the government of Pakistan has taken military actions to address the idea of threatening and going after these networks, these efforts remain focused on Pakistan's domestic threat and have had not measurable effect on the number of [bombings] in Afghanistan, on the flow of [homemade explosives] precursor materials smuggled across the border, or on the threat of networks operating in Pakistan who attack our troops in Afghanistan."

Gen. Barbero testified that, after meeting with a Fatima Group leader at JIEDDO headquarters in 2011, all future contact was cut off by the Pakistan government.

"We requested the actions that I indicated, and specifically, find a way to dye this material so our border guards on both side -- our soldiers -- can look at something and determine it's either the residue or the ammonium nitrate," the general said. "Right now, it's this nondescript, milky-white substance, which is often repackaged as detergent. So how can you tell the difference in what it is? So we request that.

"We've been told no on the dye," he said.

The Washington Times asked the JIEDDO press office if the situation with Fatima has improved in the month since Gen. Barbero's testimony. A spokeswoman declined to comment.

As Fatima stiff-arms the U.S. military, it is eyeing a chunk of the American fertilizer market.

Jim McGoff, counsel for the Indiana Finance Authority, told The Times that Fatima has created the Midwest Fertilizer Corp. and plans to build its first U.S. plant in that state.

Fatima is capitalizing on a 2008 federal disaster relief law that allows its company to obtain financing through Indiana's municipal bond market. The law allows the bond buyer, or lender, to pay no or limited taxes on the bond's interest, which means that Fatima would pay 5 percent interest instead of 7 percent.

"The federal benefit bestowed to the borrower would be the 2 percent differential," Mr. McGoff said. "The growth repayment of their obligations is much cheaper."

Midwest Fertilizer "is a new entity that is being incorporated and will be registered in the state of Indiana. And it will be a subsidiary of a company that is Fatima Group," Mr. McGoff said. "My understanding is this is a startup, a first endeavor for the Fatima Group in the United States."

Indiana state records show that Midwest was registered in Indiana in September at a time when the Pentagon says Fatima continued to be uncooperative in fighting homemade bombs.

Besides the CAN-Fatima issue, Gen. Barbero had more bad news when it comes to Pakistan and countering homemade bombs.

In July, Pakistan agreed to a military-to-military cooperation framework. At the time of his Dec. 13 testimony, the agreement "remains in its original draft form, with no progress," Gen. Barbero said.



Source: (c)2013 The Washington Times (Washington, DC) Distributed by MCT Information Services


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