We are writing to request a retraction of incorrect statements set forth as facts in two recent articles appearing in The Wall Street Journal.  One article was entitled “As Small Food Firm Takes Top Role Supplying Troops, Questions Arise,” by Glenn R. Simpson, which appeared on December 8, 2007; the other was “Spoils of War:  How Iraq Conflict Rewards a Kuwaiti Merchant Family,” by Cam Simpson and Glenn R. Simpson, which appeared on December 17, 2007. 

Central to both articles is the contention that “a Kuwaiti merchant family, the Sultans, are major shareholders” in Public Warehousing Corp. (PWC).  (That quote is from the December 8 story.)  In fact, Sultan family members are negligible shareholders of PWC, a fact that was explained to the authors before these articles were published and is explained below as well.

PWC is a public company and is listed on the Kuwait Stock Exchange.  PWC’s largest shareholders are another Kuwaiti public company, National Real Estate Company (NREC), which owns approximately 23% of PWC, and Kuwait’s Public Institution for Social Security, which owns approximately 15%.  The next largest PWC shareholder holds only approximately 2.5% of PWC’s shares.  Sultan family members hold approximately 0.5% of PWC’s shares.  (The Sultan family is a very large Kuwaiti family, with over 1000 individual members.)

Both articles refer frequently to a third Kuwaiti public company, The Sultan Center (TSC).  TSC, through subsidiaries, owns less than 1% of PWC’s shares.  TSC (also through a subsidiary) does hold a 30.5% stake in NREC, which means that TSC has approximately a 7.5% indirect interest in PWC.  As TSC has significant non-Sultan family shareholders, Sultan family indirect ownership in PWC via TSC is below 7.5%. 

Accordingly, it is clear that Sultan family members are not major shareholders in PWC, as erroneously reported.  On the same issue, both articles go on to report that “Public Warehousing says the [US] government was aware that members of the Sultan family were major shareholders in both the Sultan Center and Public Warehousing, and therefore didn’t need to be specifically told.”  (This quote is from the December 8 article.)  As indicated above, Sultan family members are not major shareholders of PWC; further, PWC said no such thing to either Mr. Simpson and this attribution is therefore erroneous.

Another error, appearing in the December 17 article, is that PWC has a “near-monopoly over strategic land and warehouse space in Kuwait,” which is an obvious error.  In fact, the government of Kuwait owns more than 95% of Kuwait’s land.  As to warehouse space, the Government of Kuwait has granted vast areas of land for warehousing directly to thousands of citizens and business establishments in the industrial cities of Shuwaikh, Sabhan, Ahmadi, Fahaheel, and Ardiya.  Warehousing activity is also permitted under certain circumstances on land that is zoned for agricultural and commercial use.  Furthermore, PWC is only one of more than thirty licensed Kuwaiti companies licensed in the logistics and transportation sector, and among those thirty are at least three other publicly-listed companies.  Finally, the Kuwait Ports Authority controls more warehouse space than PWC and the Public Authority for Industry possesses substantial inventories of warehousing space including by not limited to the Kuwait Free Trade Zone.

Your December 17 article also stated inaccurately that General Dan Mongeon "was a commander of the Defense Supply Center, the Pentagon contracting unit that oversees Public Warehousing's food contract, from 2000 to 2005, when the initial contract was awarded." It’s public record that Dan Mongeon’s command of the Defense Supply Center Philadelphia began in July 1998 and ended in August 2000, the year you report it began. His departure came long before the war in Iraq, and nearly three years before PWC won the competitively-bid contract to which you refer. 

Finally, the December 17 article also claimed that "American United Logistics complained to the GAO that its big rival had canceled the leases in order to thwart its bid."   American United Logistics’ lease was never terminated by PWC and to our knowledge they are still using the premises.
These erroneous statements should be retracted, and those retractions should be published in all of the editions in which the original articles appeared. 

Contact details:

Dale Leibach
Prism Public Affairs
Direct:                +1.202.207.3630       
Mobile:                +1.202.365.4339       
Email: dleibach@prismpublicaffairs.com