The history of questions about KGL goes back nearly a year, as members of Congress have peppered the Pentagon with questions about the firm. In one letter, Reps. Brad Sherman (D-Calif.) and then-Rep. Ron Klein (D-Fla.) advised Defense Sec. Robert Gates that KGL's own website suggested the company had been engaged in a joint venture with the Iranian state shipping company. In April, Sen. McCaskill followed up, telling Gates: "I recently received information showing that KGL may have business interests in another Iranian company."
"Despite these issues," McCaskill wrote, "KGL has continued to receive contracts from the government."
In May, Sen. Kirk followed up with another letter, this time raising concern that the company has "a history of ventures with the Iranian government." Then last week, Sherman sent his own follow up letter, saying that despite the findings by the Pentagon to date, he believed there remained cause for concern. He said he had seen records showing that a company with known ties to the Iranian shipping company had loaned money to a company partially owned by KGL to finance the purchase of two cargo ships.
"If these documents are accurate, KGL and IRISL for all intents and purposes own and operate these two vessels in partnership," Sherman wrote.
In recent weeks, senior Pentagon officials have responded to the various Congressional inquiries, saying they have "found no substantiated information" that would indicate that KGL has violated U.S. sanctions against Iran.
There was "no indication that KGL Holding has violated U.S. law," a May 30 letter from Undersecretary of Defense Ashton B. Carter says. "Please be assured, we find it important not to award contracts to violators of federal law."
It appears a prime source for the Congressional inquiries has been two thick binders circulating around Capitol Hill that are filled with what purport to be internal KGL emails, shipping records, and other internal company documents. It is unclear exactly where the internal documents came from, and some Congressional staffers have openly questioned whether some of the documents have been altered.
Among the documents are dozens of emails between top KGL executives and the Iranian shipping executive, Fard. In numerous emails between Fard and a top KGL executive, the two discuss the chartering of vessels, debate business tactics, and at one point appear to be agreeing on coded language that would help them avoid the U.S. list of banned companies. This last email exchange is one of those that KGL alleges has been altered.
Also among the documents are corporate records that purport to show that Fard served until recently on the board of of RAK Shipping, a company whose other board members included Dashti, who had a personal stake in RAK, and another KGL executive, there because of KGL's 18 percent stake. In addition to being among those named in the indictment handed down in New York, Fard was also added Monday to the U.S. Treasury Department's list of banned entities and individuals with ties to Iranian shipping.
Adam Szubin, director of the U.S. Department of the Treasury's Office of Foreign Assets Control, told reporters Monday that the Iranian shipping line has established a tangled web of shell companies with the goal of circumventing U.S. sanctions.
"As the private sector around the world increasingly turns its back on Iran's national shipping line, IRISL's efforts to evade international sanctions and increased scrutiny have grown more and more desperate," Szubin said. "The persistent attempts by IRISL to deceive the world, including through the front companies identified today, attest to the weakness of IRISL as it tries to maintain a semblance of legitimacy while supporting Iran's proliferation activities."
Dashti said KGL has taken every measure to avoid doing business with the banned Iranian firms, and added that he remains hopeful that the Congressional inquiries will not damage his company's relations with the Pentagon.
"KGL has received many awards and accommodations from the Army for its past support of overseas deployments and looks forward to continuing such support," he said.