Pakistani firm whose chemicals were used to kill US troops seeks subsidy for Indiana plant

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Pakistani firm linked to IEDs wants to open plant in US

Jennifer Griffin reports from the Pentagon

A Pakistani fertilizer maker whose chemicals have been used in 80 percent of the roadside bombs that have killed and maimed American troops in Afghanistan is now seeking U.S. taxpayer subsidies in order to open a factory in Indiana.

The request appears to be on hold pending further review, but the situation has stirred outrage in Congress, where some accuse the Pakistani government of halting efforts to clamp down on the bomb-making.

For the past seven years, the U.S. government has known that the raw material calcium ammonium nitrate, or CAN, is making its way across the border into Afghanistan where the Taliban use it to fuel their most deadly weapons, namely the improvised explosive device. IEDs have long been the number one killer of U.S. and coalition troops.

The material largely comes from Pakistani fertilizer maker the Fatima Group. But the Pakistani government has stymied attempts by the Pentagon to stop the flow of the fertilizer used in these homemade bombs, according to the director of military Joint IED Defeat Organization, Lt. Gen. Michael Barbero.

"The producers within Pakistan have been less than cooperative," Barbero told a congressional committee late last year. "Despite making minor packaging, tracking and marketing changes, they have not implemented any effective product security or stewardship efforts. Pakistani-based CAN producers can and must do more. Frustratingly, all direct communication and engagement with the leaders of Fatima Group was halted by the government of Pakistan."

The Pentagon enlisted help from the State Department to intervene and pressure the Lahore-based Fatima Group to change their formula. In an interview with Fox News, Rep. Duncan Hunter, R-Calif., said those efforts by the State Department "completely failed," and he blames the Pakistani government in large part.

"The Fatima organization was willing to work with our U.S. military to curtail the cross-border transaction of calcium ammonium nitrate until (the) Pakistani government told them 'no, you aren't going to curtail it, stop talking with Americans, we are going to keep shipping across the border the way that we have been'," he said.

What's worse, Hunter said, is that now this same fertilizer group wants to open a factory in Indiana, taking advantage of U.S. taxpayer subsidies meant to help Indiana recover after recent flooding.

"Not only was this company Fatima able to still ship calcium ammonium nitrate  to make bombs across the border  into Afghanistan, but they were almost getting ready to take advantage of taxpayer-subsidized loans to set up shop in Indiana to make more fertilizer while they were sending bomb making material across the border from Pakistan to Afghanistan," Hunter said.

Indiana's state officials have suspended Fatima's request pending a further investigation and now, for the first time in 12 years, the fertilizer maker appears willing to take simple steps to make its fertilizer non-explosive.

In a statement, Barbero called the developments "positive" and said "Fatima confirmed to me in writing that it has suspended sales of CAN fertilizer products in the border provinces of Balochistan and Khyber Pakhtunkhwa, affecting 228 dealers in those areas."

Sen. Bob Casey, D-Pa., likewise said he's received "commitments" from the Fatima Group "that they have voluntarily halted distribution of CAN" in those provinces. He called them "very positive developments which should diminish the amount of this fertilizer available for diversion and smuggling."

The Fatima Group also recently released a video that it says shows a test of a new, less explosive fertilizer they are trying to produce. "As you can see from the video testing, the Fatima Group has successfully created a more inert formulation of ammonium nitrate fertilizer," Fatima said in a statement to Fox News. "Our extensive research and rigorous testing have led to the development of a formulation that has made it extremely difficult -- if not impossible -- to modify ammonium nitrate fertilizer into an explosive."

U.S. Defense officials are still awaiting visas from the Pakistani government to visit Pakistan to see the facility themselves and whether the company's claims that they have made their fertilizer more inert are true.

Still, many believe it's too little progress, too late. Last year, nearly 1,900 U.S. casualties were caused by these homemade bombs. And during the past two years in Afghanistan, roadside bomb events increased 80 percent.

Rep. Peter King, R-N.Y., wrote to the departments of Homeland Security and Treasury last month asking for a review of the company's request, noting it could impair national security.

The Treasury Department, in a response dated March 4, suggested that this particular case would fall under the purview of the Committee on Foreign Investment in the United States. The letter, citing the confidentiality of the process, did not say for certain whether and how this case was being reviewed.

"Pakistan not a good actor," Hunter said. "At some point a few months ago this corporation and the Pakistani government cut off all talks with the U.S. military about curtailing the transportation of this explosive across the border until this happened in Indiana. ... Then they reopened up the lines of communication because once again the almighty American dollar prevails."