Wednesday, January 31, 2007
A former finance official for the Coalition Provisional Authority in southern Iraq received a nine-year sentence on corruption, money laundering, and weapons charges. Robert Stein worked for the CPA in administering the rebuilding effort, and engaged in a wide-ranging corruption scheme to award contracts to favored companies. According to a Department of Justice press release (here):
Stein admitted to participating in a complex bribery, fraud and money laundering scheme while serving as the Comptroller and Funding Officer for the CPA-SC. From December 2003 through December 2005, Philip H. Bloom, a U.S. citizen who owned and operated several companies in Iraq and Romania, Bruce D. Hopfengardner, a Lieutenant Colonel in the U.S. Army Reserves, and numerous public officials, including several high-ranking U.S. Army officers, conspired to rig the bids on contracts being awarded by the CPA-SC so that all of the contracts were awarded to Bloom. In return, Bloom provided the public officials with over $1 million in cash, SUVs, sports cars, a motorcycle, jewelry, computers, business class airline tickets, liquor, future employment with Bloom, and other items of value.
In addition, Bloom laundered over $2 million in currency that Stein and his co-conspirators stole from the CPA-SC that had been designated to be used for the reconstruction of Iraq. Bloom then used his foreign bank accounts in Iraq, Romania and Switzerland to send the stolen money to Stein, Hopfengardner and other public officials in return for the awarded contracts. In total, Bloom received over $8.6 million in rigged contracts.
Bloom, one of the coconspirators identified in the government statement, also entered a guilty plea and is scheduled to be sentenced on February 16, 2007.
This is not the only front in the investigation of corruption and contract abuse involving the Iraqi reconstruction. The House Oversight and Government Reform Committee will be conducting hearings on the topic, and a statement on the Committee website (here) states:
Rep. Waxman and other members of Congress have been seeking information on contracts entered into by the Administration for reconstruction and development work in Iraq, including several billion dollar contracts with a subsidiary of Halliburton Corporation. Many questions have been raised about the Iraq contracting process, including questions on the seemingly inflated prices charged by Halliburton to import gasoline from Kuwait into Iraq and Halliburton's admission of kickbacks to company officials.
Needless to say, the change in control on Capitol Hill will make these hearings quite contentious. (ph)