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Revision as of 04:28, 21 March 2007
Eurest Support Services (ESS), a subsidiary of the giant catering company, the Compass Group.
ESS first came to wide public light after being embroiled in the multibillion-dollar United Nations procurement scandal. ESS used the broker company IHC Services as a broker to get United Nations procurement contracts with the use of corruption of the U.N. official Alexander Yakovlev (UN procurement). It was also investigated by the Congress of the United States House of Representatives Committee on Oversight and Government Reform for its role in contracting arrangements in providing dining services to the US Army in Iraq as a subcontractor to Halliburton subsidiary KBR.
U.N. Corruption
A multi-million dollar contract to provide food to U.N. peacekeepers was awarded to ESS, days after Andy Seiwert a senior executive at ESS received confidential bid information from IHC Services's CEO, Ezio Testa. At the time U.N. officials estimated the total value of ESS food contracts with the United Nations at $237 million, with renewals and add-ons that could reach $351 million.
Attached to the e-mail were commercially sensitive U.N. documents that no one outside of highly restricted circles within the U.N. was supposed to have access to; and that the contracts committee itself would not ponder for five more days.
- The first document was a draft of the official recommendation by the UN procurement department that a $62 million contract for U.N. peacekeepers in Liberia be awarded to Eurest Support Services.
- The second document was a detailed United Nations evaluation of the technical abilities of 12 different food supply firms to meet U.N. requirements for feeding separate UN peacekeeping missions.
- The third document was a detailed list of the price bids, that three of the five firms had submitted for the UN contract. The document showed that ESS had bested its nearest rival, a food services firm known as Es-Ko, by literally pennies per ration unit, and had also underbid its competitors in virtually every other service category.
Such information is considered top-secret by the United Nations, and is submitted in a sealed-bid process that U.N. officials have touted as foolproof. Nonetheless, all this information was clearly available to the business executive who sent the e-mail: Ezio Testa.
ESS's business development executive Andy Seiwert, who received Testa's e-mail had a vital interest in it. Siewert was the ESS/Compass executive described by sources close to the U.N. as having the most frequent day-to-day contact with the scandal-plagued UN procurement department. That contact included frequent meetings with Alexander Yakovlev (UN procurement).
Alexander Yakovlev (UN procurement) pleaded guilty to charges of corruption, wire fraud and money-laundering after his personal ties were exposed to IHC Services. Vladimir Kuznetsov Head of the U.N. Committee for Administrative and Budgetary Issues was also arrested and indicted after taking nearly $1 million in bribes from the Compass Group.
Competitors ES-KO and Supreme Food Services AG have initiated lawsuits claiming violation of the Racketeer Influenced and Corrupt Organizations (RICO) Act, the Sherman Antitrust Act and New York State's Donnelly Act regulating free trade. Compass settles the claims and said that the total legal, professional and related costs associated with investigation, litigation and settlement was below £40 million although they did not admit legal liability . Federal investigations are underway and the case has been referred to the Serious Fraud Office (UK).
Iraq Contracting
ESS was contracted by KBR, a subsidiary of Halliburton under the ] troop support contract called LOGCAP to provide dining and construction services in Iraq . Henry Waxman, chairman of the House Committee on Oversight and Government Reform provided examples of how charges for security personnel employed by Blackwater USA compounded as various contractors put on their charges, adding to the final bill the U.S. Army and American taxpayers were expected to pay . It has been contended that the contract between ESS and Blackwater, through an intermediary called Regency Hotels, was known to Halliburton and therefore violated Halliburton's contract with the U.S. Army . Four Blackwater employees were killed in an ambush in Falluja in March 31, 2004 while protecting an ESS convoy on the way to a KBR location .
External links
Sources
- Compass Group’s bid rigging scheme
- Lawsuit from competitor ES-KO
- Lawsuit from competitor Supreme Foodservices AG
- The stolen secret documents