Indiana Gov. Mike Pence has suspended a deal to finance an in-state fertilizer plant to be built by a Pakistani conglomerate that the Pentagon has criticized for refusing to take steps to stop the flow of materials to makers of bombs that kill U.S. troops in Afghanistan.
News of Mr. Pence’s action followed a report Monday in The Washington Times that said Pakistan’s Fatima Group stood to benefit from the sale of $1.27 billion in tax-exempt municipal bonds in Indiana even as it rebuffed Pentagon efforts to save U.S. lives.
The governor “immediately ordered that the project be suspended pending further investigation,” said Pence spokeswoman Christina Denault. “Indiana is actively investigating in consultation with federal authorities/[Defense Department] the situation at this time.”
Ms. Denault said Mr. Pence was briefed on “new developments regarding Fatima Group” on Jan. 14 shortly after taking office.
The Times reported that Army Lt. Gen. Michael Barbero, whose office oversees efforts to thwart homemade bombs in Afghanistan, had criticized Fatima in testimony before a Senate subcommittee in December.
Gen. Barbero said Fatima had refused to take simple steps to prevent its calcium ammonium nitrate — a fertilizing compound used by bomb-makers — from being smuggled to Taliban operatives in Afghanistan.
Homemade bombs — known as improvised explosive devices (IEDs) — are the No. 1 killers of U.S. troops in Afghanistan.
The Pakistani Embassy in Washington this week provided The Times with a statement defending Fatima’s conduct and pledging cooperation.
Fatima “has been forthcoming and cooperative in initiating all the measures suggested by the government of Pakistan and the U.S.,” the statement said.
In his testimony last month, Gen. Barbero said that Fatima is the only source of calcium ammonium nitrate being smuggled into Afghanistan, which outlaws importation of the substance. He said 85 percent of IEDs used to kill and maim Americans are homemade, and the majority of those are made with ammonium nitrate.
Gen. Barbero, who directs the Pentagon’s Joint Improvised Explosive Device Defeat Organization, testified that he had asked a Fatima official to begin dyeing its calcium ammonium nitrate so it could be picked out at border crossings. He said smugglers mask the compound as detergent.
He also asked Fatima to make unspecified changes that would allow the U.S. to use its sophisticated tracking technology. The general called Fatima “less than cooperative.”
“We’ve been told ‘no’ on the dye. I believe Pakistani-based [calcium ammonium nitrate] producers can and must do more,” he testified on Dec. 13.
The Pakistani Embassy’s statement said that Fatima “has initiated strict controls over its production, shipment and sale through their authorized dealers.”
“They have also started printing batch numbers on each bag. This number will provide information about the date of shipment, dealer and customer names, addresses, destinations, vehicle registration number and driver’s name, and ID numbers.”
Fatima has redesigned the [calcium ammonium nitrate] bag and stopped sales close to the Afghanistan border, said the statement, which did not mention dyeing the granules.
A congressional source told The Times that Fatima is influenced by Pakistan’s powerful Inter-Service Intelligence (ISI) agency, some of whose elements help insurgents, according to U.S. spy sources.
The embassy statement said, “Pakistan has never denied any request by the U.S. side to interact with the Fatima Group. On the contrary, it has encouraged the interaction. On two occasions the last few months, we have arranged meetings of the visiting directors of the group with Gen. Barbero.”
“Pakistan is the biggest sufferer of IEDs. We are terrorism’s biggest victim and among its toughest and most resilient foes,” the statement said.
Gen. Barbero on Thursday provided a statement to The Times saying he sticks by his testimony.
He said the Joint Improvised Explosive Device Defeat Organization “is singularly focused on the IED threat to our war fighters. Homemade explosives continue to be the main charge of IEDs found in Afghanistan. Of the 87 percent of IEDs made with [homemade explosives], 60 percent is made from ammonium nitrate derived from Pakistani-produced calcium ammonium nitrate fertilizer.
“I stand by the Dec. 13 statement I made before the Senate. We look forward to continual productive dialogue between Pakistan and the United States. We stand ready to partner with the government of Pakistan and industry to work together on this mutual IED threat.”
A congressional staffer said officials at the Joint Improvised Explosive Device Defeat Organization agree that Fatima has cooperated on some monitoring but not on more comprehensive measures such as dyeing. Smugglers can simply take some of the granules out of their bags and repackage them as detergent. The organization also has not received cooperation on tracking technology that is classified, the staffer said.
Rep. Duncan Hunter, a California Republican who fought in Iraq and Afghanistan as a Marine Corps officer, told The Times that the Indiana bond issue should be held up until Fatima becomes more cooperative.
But the Pakistani Embassy said: “It is unfortunate that instead of recognition, efforts are being made to hurt their commercial ventures. This matter needs to be considered purely from a business point of view.”
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