Corruption by Rogue Member of Kuwaiti Royal Family Costs U.S. Taxpayers Millions, Threatens Military Alliances

As tensions intensify between the U.S. and Iran, shady behavior by a rogue member of the Kuwaiti royal family is threatening to endanger America’s relationship with one of our most important allies in the Middle East.

In recent weeks, a pro-Iranian militia allegedly fired a rocket that landed near the U.S. Embassy in Baghdad, and U.S. National Security Adviser John Bolton blamed Iranian naval mines for damaging oil tankers off the coast of the United Arab Emirates. Iran has also threatened to ramp up its nuclear activity if the European Union fails to protect Iran from U.S. sanctions.

President Trump responded to the Iranian threats by announcing he would send an additional 1,500 U.S. troops to the Middle East. And that number could soon grow much larger.

Acting Defense Secretary Patrick Shanahan outlined a plan to deploy an additional 120,000 military personnel to the Middle East – many of whom would join the 20,000 Americans already stationed in the dozen active U.S. Armed Forces facilities located in Kuwait.

As a result, it is vital that America’s relationship with Kuwait remain as strong as possible.

Unfortunately, the Kuwaiti government may soon cause the Trump administration to rethink the plan to pour more American troops – and U.S. tax dollars – into Kuwait.

Sheikh Yousef Abdullah Al-Sabah, the director general of the Kuwait Ports Authority and a member of the country’s royal family, has exploited his position by unilaterally deciding who can and cannot work at the port. This has sabotaged competition for U.S. military contracts and diverted them to favored local companies, squandering tens and perhaps hundreds of millions of American tax dollars in the process.

Over a year ago, Sheikh Yousef singled out and unilaterally banned one of the Pentagon’s longtime contractors, the Kuwait and Gulf Link Transport Company (KGL), and its affiliates from operating at Kuwaiti ports. The move blocked a Defense Department contract with KGL to load and unload military supplies from U.S. ships at the port. By banning KGL and refusing to recognize its registration to work at the ports, Sheikh Yousef ensured the Pentagon was forced to use more expensive contractors on a sole source basis.

Sheikh Yousef’s blacklisting of KGL  benefited a small number of other local logistics companies, including some with strong ties to high-ranking government officials, raising suspicions of possible bribery and kickbacks. Sheikh Yousef allowed another local competitor, Global Clearinghouse, to operate at the port without complying with the requirement to register.

The parent company of Global Clearinghouse is Agility. The company has a history of ripping off the United States. In 2008, Agility was criminally indicted for overcharging the U.S. government for supplying food to American troops in Iraq. In 2017, the company agreed to pay $95 million in penalties for cheating U.S. taxpayers.

Kuwaiti courts have grown tired of Sheikh Yousef deviously dictating who can and cannot access Kuwaiti ports. A judge recently ordered the Ports Authority to recognize KGL’s registration at the ports and pay KGL more than $80 million in damages for lost work.

Sheik Yousef has ignored that ruling and continues to pick and choose who can service contracts for the U.S. military.

Fortunately, Sheik Yousef is in the midst of a reappointment battle, giving the Trump administration an opportunity to persuade Kuwait to remove him from his position.

By replacing Sheik Yousef, Kuwaiti officials would demonstrate a commitment to fighting corruption and championing fairness and free market competition.

If Sheik Yousef is allowed to stay in his post, Kuwait could harm its relationship with the country’s second-largest trading partner behind China. Last year, U.S. imports from Kuwait exceeded $2 billion.

It’s hard to imagine the Trump administration continuing America’s congenial trade relations with Kuwait if Sheik Yousef continues to cost U.S. taxpayers tens of millions of dollars a year by preventing the Pentagon from engaging in competitive bidding for services at Kuwaiti ports.

At this time of escalating tension the Middle East, President Trump owes it to America’s military to tell Kuwait to get rid of Sheik Yousef. Kuwait must recognize that protecting a corrupt bureaucrat isn’t worth risking its most important ally.

Drew Johnson is a taxpayer watchdog who serves as a Senior Fellow at the National Center for Public Policy Research.