March 15, 2008

SIGIR UPDATE; on the Arms profiteers ..

Revealed: Top officials in Iraq contract fraud

Released on 14/03/2008

Revealed: Top officials in Iraq contract fraud

Iraq investigator Stuart Bowen (left) has released his report into Robert Stein (right), the official who compromised reconstruction and defrauded the US taxpayer of millions. As John Allen reports, it makes for sober reading.

Successful pursuit of the Bloom-Stein conspiracy, the first major fraud prosecution in Iraq, has been reported to the US Senate by the Special Inspector General for Iraq Reconstruction, Stuart W. Bowen, Jr.

This was the outcome of collaboration among several US law enforcement agencies including the FBI and the Internal Revenue Service who together formed ‘Spitfire’ a nickname for the Special Investigative Task Force on Iraq Reconstruction.

Prosecution was initiated after a SIGIR audit revealed a criminal conspiracy in Hilla, Iraq, involving tens of millions of dollars in fraudulent contracts, bribes and kickbacks. This led to nine individuals, including US Army officers and high-ranking civil servants, being indicted. Four have been convicted and others are going to trial.

Presenting the facts to the US Senate Committee on Appropriations, Mr. Bowen’s report said that Robert Stein, the former Coalition Provisional Authority’s (CPA) comptroller and funding officer in Hilla, pleaded guilty to conspiracy, bribery, money laundering, possession of machine guns, and being ‘a felon in possession of a firearm’. The conspiracy is estimated to have defrauded the CPA of more than US$8.6 million.

Stein was sentenced in January 2007 to nine years in prison and three years of supervised release. He was ordered to pay US$3.6 million in restitution and forfeit $3.6 million in assets.

In 2006 construction contractor Philip Bloom pleaded guilty to defrauding the CPA. Bloom admitted that along with Robert Stein and numerous public officials, including several high-ranking (Lieutenant Colonel) US Army officers, he had conspired to rig bids for federally-funded contracts awarded by CPA-South Central Region.

The effect of the conspiracy was that all of the contracts were awarded to Bloom, to a value exceeding US$8.6 million. He admitted paying Stein and other public officials over $2 million from proceeds of the fraudulently awarded contracts and stealing at least $2 million from the CPA.

Bloom was sentenced to 46 months in prison and two years of supervised release. He was also ordered to pay $3.6 million in restitution and forfeit $3.6 million in assets.

Later that year, an employee of a government contractor in Iraq pleaded guilty to a violation of the Foreign Corrupt Practices Act. He offered a bribe ($60,000, according to Court filings) to an Iraqi police officer for his assistance in procuring approximately 1,000 armoured vests and other equipment for approximately $1 million.

The accused was sentenced to three years in prison, two years of supervised release and 250 hours of community service.

A Lieutenant Colonel in the United States Army Reserve pleaded guilty to conspiracy to commit wire fraud and money laundering in connection with the Bloom-Stein scheme. This operation was used to launder over $300,000 through various bank accounts.

Last year the officer was sentenced to 21 months in prison followed by three years supervised release. He was ordered also to forfeit $144,500, equivalent to the cash payments he received from Bloom for his money laundering services.

A master sergeant in the US Air Force working for the Department of Defense received a 12 months and one day prison sentence for accepting illegal bribes from Bloom in exchange for furnishing him with sensitive contract information prior to awards.

Trials for three other men caught up in the Bloom-Stein conspiracy are understood to be in progress and pending for two more.

Commenting on the situation in Iraq, Mr. Bowen’s report said that corruption remains endemic. “Unless checked, it is doubtful that many US funded reconstruction efforts will be able to achieve their intended purpose.”

see also:

A summary of the Bloom/Stein Conspiracy

  1. ^ Contractor Pleads Guilty In Case Involving Bribery, Fraud And Money Laundering Scheme In Al-Hillah, Iraq, United States Department of Justice, April 18, 2006
  3. ^ Philip Bloom arrested in Iraq reconstruction deals scandal, Bucharest Daily News, December 16, 2005
  4. ^ A Summary of the Bloom/ Stein Conspiracy, Special Inspector General for Iraq Reconstruction, October 30, 2006

And on the one that has "got away" .. JAMES WOOLSEY ..

James Woolsey

Former CIA director James Woolsey was an outspoken proponent of regime change in Iraq, even before 9/11. And since the Iraq war began, he and his wife Suzanne have done pretty well. Woolsey is a vice president at Booz Allen Hamilton, a contractor called “the shadow intelligence community” by one former CIA deputy director.

In addition to serving on the board of Fluor, one of the largest Iraq reconstruction contractors, Suzanne Woolsey also works as a trustee at the Institute for Defense Analysis, a nonprofit corporation paid to do analytical and strategic research for top Pentagon officials.

For Mr. Woolsey, the war was the ultimate pay-off for years of anti-Saddam advocacy. In addition to being a member of the neoconservative cabal known as the Project for a New American Century (PNAC), he was also appointed by Douglas Feith and Donald Rumsfeld to the Bush administration’s Defense Policy Board, as well as advisory boards for the Navy and CIA.

Woolsey was also a member of the Committee for the Liberation of Iraq (CLI), a private group founded to build support for the war in 2002 by former Lockheed Martin vice president Robert Jackson, another PNAC member who also wrote the Republican Party foreign policy platform in 2000.

Woolsey and the CLI lobbied members of Congress to pass the Iraq Liberation Act (ILA), which allocated nearly $100 million to Ahmed Chalabi’s Iraq National Congress (INC), for whom Woolsey was a paid adviser. Right after 9/11, Woolsey went off to Europe, returning with an unnamed source’s dubious claim that he had observed a meeting between Mohammed Atta, the lead 9/11 skyjacker, and an Iraqi agent in Prague.

As soon as the occupation began, Woolsey turned his attention to helping businesses get in on the action, becoming a featured speaker at related contractor and investor gatherings.

In addition to working for Booz Allen, he is a principal in the Paladin Capital Group, a Carlyle-like investment strategies firm, and has connections to Global Options, a risk management consulting firm headed by Neil Livingstone, with whom Woolsey serves on the Defense Policy Board.

Besides Woolsey and Livingstone, seven other members of the 30-member Defense Policy Board selected by Douglas Feith and Donald Rumsfeld have stood to benefit financially from the war, according to the Center for Public Integrity.

Multinational Monitor Contributing Editor Charlie Cray is Director of the Center for Corporate Policy.

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