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APNewsBreak: Iowa unaware of company’s fraud suit

February 14, 2013 • Business


In this Nov. 19, 2012 photo Egyptian billionaire Nassef Sawiris, left, CEO of Cairo-based Orascom Construction Industries, Iowa Secretary of Agriculture Bill Northey, center, and Iowa Republican Gov. Terry Branstad sign their name in concrete during a groundbreaking ceremony for a fertilizer plant in Wever, Iowa. State and local officials promised Orascom $200 million in tax breaks to build the fertilizer plant in southeast Iowa without knowledge of a pending lawsuit alleging one of the company’s subsidiaries defrauded U.S. taxpayers out of millions of dollars, officials told The Associated Press. (AP Photo/The Hawk Eye, Brenna Norman) MANDATORY CREDIT

IOWA CITY, Iowa (AP) — State and local officials promised an Egyptian company $200 million in tax breaks to build a fertilizer plant in southeast Iowa without knowledge of a pending lawsuit alleging one of the company’s subsidiaries defrauded U.S. taxpayers out of millions of dollars, officials told The Associated Press.

The Iowa Economic Development Authority and Lee County approved the incentives for a subsidiary of Cairo-based Orascom Construction Industries, which is planning to invest $1.4 billion to build the plant near Burlington. Their failure to uncover the lawsuit — disclosed by Orascom in its annual report — raises questions about the research that went into the deal, which has been criticized as rushed and overly generous.

Orascom didn’t tell Iowa officials — and were not required to — that it is contesting a lawsuit filed by the federal government in 2004 alleging its subsidiary, Virginia-based Contrack International, was part of a joint venture that improperly won $332 million in U.S.-financed construction Login to read more

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