Update: Yesterday's (10-17-07) Wall Street Journal (subscription) article about this investigation began "Prominent American food companies are under scrutiny in a federal probe of possible fraud and corruption in the military's food-supply operations for the Iraq war", and went on to read "The inquiry is focused on whether the food companies set excessively high prices when they sold their goods to the Army's primary food contractor for the war zone." Today's (8-18-07) WSJ article about the investigation reported a very different slant to the story, suggesting that, rather than pursuing American producers, the government was investigating the wholesaler and companies involved in the Kuwait end. Given this change, I find the story I have written below no longer substantiated, and caution readers to wait along with me for more reliable information.

In accordance with our policy of owning up to what we have written, the post will remain.

A number of American food companies including Sara Lee (NYSE:SLE), ConAgra (NYSE: CAG) and Perdue Farms Inc. have come under suspicion of conspiring with Kuwait-based Agility Corp., a logistics supplier for the U.S. troops in Iraq, to inflate food supply costs. In June, Agility received a new, one-year, $2.8 billion contract to provide life support (billeting, motor pool, dining and medical support services) to troops in Iraq. Agility, until recently known as Public Warehousing, has enjoyed a series of support contracts throughout much of the Iraq conflict.

According to Reuters, the Defense and Justice Departments are investigating allegations that Agility may have taken kickbacks from its suppliers, as well as charging the U.S. military unreasonably high prices for provender.

Agility, founded in 1979, was taken public in 1997 and is traded on the Kuwait exchange. It employs over 20,000 people in over 100 countries, with an annual revenue of $4.5 billion. In June, it was also awarded a $43.6 million contract for base operations and maintenance services at U.S. Air Force bases in Spain.

Update: ConAgra has put out a press release claiming that the DOD is looking to them as witnesses, rather than perpetrators.

As the nation celebrates the liberation of Burger King from the chains of trans-fat and the Senate awaits the food industry's ideas for self-imposed restrictions on advertising to our nation's youth, we learn that the soldiers fighting in Iraq are putting on pounds like a dairy-belt freshmen.

Apparently, along with democracy, we've exported our taste for fast foods to Baghdad's green zone. Soldiers there can dine on the finest American-style fried chicken, burgers, pastries, cheese steaks, and sodas. The Army & Air Force Exchange Service there operates outlets for Burger King (NYSE: BKC) , Pizza Hut and KFC (Yum Brands, NYSE: YUM).

According to a Los Angeles Times report, military doctors report some soldiers return to the States with a serious cholesterol problem and the "Baghdad 15" due to the ready supply of trans-fat rich foods. In response to the problem, they have created a diet program called "Operation Weight Loss" for the soldiers.

Those interested in better understanding this issue might check out a new web game, Fatworld! As described in Wired Magazine, the game allows participants to play the role of restaurant magnates, enjoying along with their customers "food allergies, diabetes, heart disease, and death".

I'll wait for the Wii version, where I can race my wife to see who can scoop up the most dip with virtual tortilla chips.