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The plant would employ 165 workers and support more than 2,000 temporary construction jobs, backers say. Critics say the subsidies were too generous per job and wondered whether the project would've come to Iowa without them.
Orascom created a subsidiary in Delaware called the Iowa Fertilizer Company before applying for incentives. In its application, Orascom strategic planning director Kevin Struve attested that the Iowa Fertilizer Company had not broken any laws.
Branstad's administration promised tax credits worth more than $100 million as well as a $1.6 million loan. A state transportation commission agreed Tuesday to spend $5 million on improving the roads around the plant. Lee County waived the plant's property taxes for 20 years in lieu of payments totaling $16.5 million -- an estimated $130 million break.
In addition, Orascom is borrowing $1.2 billion from a bond program created by Congress in 2008 to help the Midwest recover from floods and tornadoes -- a subsidy that could shave $300 million off interest payments, said Sen. Joe Bolkcom, an Iowa City Democrat.
"This company is pushing, pushing, pushing and they have taken taxpayers to the cleaners," he said. Bolkcom said state officials conducted an "amateur hour" negotiation with Orascom, and should look into the lawsuit's allegations.
The government's lawsuit alleges that Contrack joined with Idaho-based Morrison Knudsen Corp. and an Egyptian company to bid starting in 1997 on work to construct water and wastewater infrastructure in Egyptian cities. Contrack and Morrison Knudsen told USAID they were the only team members, and kept the Egyptian company's involvement secret, the lawsuit alleges, submitting invoices that falsely attested all companies involved met the U.S. nationality requirements.
USAID's inspector general uncovered the suspected fraud in 2002. The lawsuit alleges they violated the False Claims Act and were unjustly enriched.
The case has been on hold during bankruptcy proceedings of Morrison Knudsen's successor, Washington Group International. A judge ruled last year that most of the government's claims could proceed, but WGI appealed. The lawsuit is expected to resume in federal court in Idaho once the appeal is resolved.
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