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From: [EMAIL PROTECTED]
Front Page--NY
Times
American Faces Charge of Graft for Work in Iraq
By
JAMES GLANZ
Published:
November 17, 2005
In what is expected to
be the first of a series of criminal charges against officials and contractors
overseeing the rebuilding of Iraq, an American has been charged with paying
hundreds of thousands of dollars in bribes and kickbacks to American occupation
authorities and their spouses to obtain construction contracts, according to a
complaint unsealed late yesterday.
The man, Philip H. Bloom, who controlled three companies that did work in
Iraq in the multibillion-dollar reconstruction effort, was charged with
conspiracy, wire fraud, conspiracy to launder money and interstate
transportation of stolen property, all in connection with obtaining up to $3.5
million in reportedly fraudulent contracts.
The complaint,
unsealed in the Federal District Court of the District of Columbia, also cites
two unnamed co-conspirators who worked in the Coalition Provisional Authority,
the American administration that governed Iraq when the contracts were awarded
in early 2004. These were the officials who, with their spouses, allegedly
received the payments.
"This is the first
case, but it won't be the last," said Jim Mitchell, a spokesman for the Special
Inspector General for Iraq Reconstruction, an independent office. Mr. Mitchell
said as many as a dozen related cases had been referred to the Justice
Department for possible prosecution.
Mr. Bloom's lawyer,
Robert Mintz of Newark, said he still knew little about the case beyond what was
in the complaint. "The complaint and the supporting affidavit were unsealed for
the first time today and we're in the process of reviewing the allegations," he
said.
Mr. Bloom, who lived
in Romania for many years, appeared in court yesterday, Mr. Mintz said. He was
arrested recently at Newark Liberty International Airport, the lawyer added.
The complaint says
that in order to obtain lucrative reconstruction contracts, Mr. Bloom paid at
least $200,000 a month to an unspecified number of coalition authority
officials, including the two co-conspirators and their spouses. Neither
co-conspirator is named in the complaint, although it indicates that one is
cooperating with the prosecution.
The other
co-conspirator, the complaint says, held the position of comptroller and
financing officer for "C.P.A. South Central Region in Iraq," which included
Hillah. This person controlled $82 million "to be used for payment of contract
services rendered in Al Hillah, Iraq, including contracts awarded to Bloom," the
complaint asserts.
A United States
government official said this person was named Robert J. Stein.
The complaint says the contracts Mr. Bloom obtained "were purported to be for the rebuilding and stabilization of Iraq" in Hillah and Karbala, a holy city in the south. The work included "the renovation of the Karbala Public Library; demolition work related to, and construction of, the Al Hillah Police Academy; the upgrading of security of the Al Hillah Police Academy, and the construction of the Regional Tribal Democracy Center." With the assistance of
the alleged co-conspirators and others, the document says, Mr. Bloom submitted
multiple bids on the same contracts, using the names of different companies that
were either controlled by Mr. Bloom or did not exist. Once there were sufficient
bids to satisfy United States government regulations, the co-conspirators,
including Mr. Stein, would ensure that the contract went to one of the
companies, the complaint says.
"The value of these
contracts ranged up to $498,900," the complaint says. "Co-conspirator 1's
approval authority for awarding contracts was limited to contracts less than
$500,000."
The complaint contends
that the monthly bribes to coalition officials have been corroborated by an
Iraqi witness, one of the conspirators "and other persons with personal
knowledge of the payments, and through reviewing various financial
records."
In one case Mr. Bloom,
"who paid the aforementioned bribes, kickbacks and gratuities," the complaint
says, "caused the transfer of funds totaling more than $267,000 from foreign
bank accounts to accounts in the United States in the name of Co-conspirator 1
and/or his spouse." Other transfers came from banks in Kuwait, Switzerland, the
Netherlands and Romania to accounts controlled by the alleged conspirators, the
complaint says. Some transfers also went to jewelers, automobile dealerships and
a realty firm, all apparently for the benefit of the fellow conspirators.
"I believe that the
financial and monetary transactions described above are part of a conspiracy to
violate United States law," wrote Patrick McKenna Jr., a special agent for the
inspector general's office, as part of the complaint.
Little information was
immediately available about Mr. Bloom or Mr. Stein. But the inspector general
previously noted that in the rush to start reconstruction projects in south
central Iraq, contracts were handled sloppily and oversight was
minimal.
The charges are likely
to fuel further criticisms of the rebuilding effort in Iraq, which has largely
failed to live up to the hopes of United States officials. Large amounts of the
money appropriated for rebuilding have been spent on securing projects and
repairing sabotage, both results of insurgent activity. The effort has also been
criticized for failing to take into account the problems faced by any building
project in Iraq, including the difficulty of visiting project
sites.
#end
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