Los Angeles Times
U.S. Contractor Slain in Iraq Had Alleged Graft
The weapons dealer had accused officials in the Defense Ministry of a
kickback scheme.
By Ken Silverstein, T. Christian Miller and Patrick J. McDonnell
Times Staff Writers
January 20, 2005

WASHINGTON - An American contractor gunned down last month in Iraq had
accused Iraqi Defense Ministry officials of corruption days before his
death, according to documents and U.S. officials.

Dale Stoffel, 43, was shot to death Dec. 8 shortly after leaving an Iraqi
military base north of Baghdad, an attack attributed at the time to Iraqi
insurgents. Also killed was a business associate, Joseph Wemple, 49.

The killings came after Stoffel alerted senior U.S. officials in Washington
that he believed Iraqi Defense Ministry officials were part of a kickback
scheme involving a multimillion-dollar contract awarded to his company, Wye
Oak Technology, to refurbish old Iraqi military equipment.

The FBI has launched an investigation into the killings and whether they
might have been retaliation for Stoffel's whistle-blowing activities,
according to people familiar with the inquiry. The FBI declined to comment.

Stoffel, of Monongahela, Pa., made his allegations in a Dec. 3 letter to a
senior Pentagon official and in a meeting with aides to Sen. Rick Santorum
(R-Pa.). Soon after, Stoffel was summoned to the Taji military base in Iraq
by coalition military officials to discuss his concerns about his contract.
He complained about payment problems with a mysterious Lebanese businessman
designated by the Iraqis as a middleman, sources said.

As Stoffel, Wemple and an Iraqi interpreter left the Taji base in a car Dec.
8, another vehicle rammed theirs head-on. Two masked men jumped out and
executed the two Americans in a fusillade of bullets, according to news
accounts at the time. Their interpreter fled and is missing.

Stoffel's death has prompted new worries about the integrity of the
reconstruction effort in Iraq, which has been plagued by accusations of
corruption and cronyism almost from the start.

One U.S. official said that corruption problems involving middlemen and
kickbacks were become increasingly widespread as the Iraqis began to
exercise more control over the contracting process.

Stoffel's killing drew scrutiny from investigators not only because of his
whistle-blowing activities but also because of his mysterious and
controversial past. Stoffel worked on a top secret U.S. program in the 1990s
to buy Russian, Chinese and other foreign-made weapons for testing by the
U.S. military, according to documents and interviews.

Stoffel's Iraq deal was the first large-scale contract issued and funded
directly by the Iraqi government for military purposes, and was crucial for
training and equipping the Iraqi army, considered a key component of the
U.S. strategy for exiting Iraq.

Failing to stop the alleged corruption "will set a very negative precedent
for subsequent dealings with the Iraqi military, harm U.S. companies seeking
to do business according to U.S. law, and be the source of embarrassment and
political tension to the Bush administration with respect to the effort in
Iraq," said Stoffel's letter to the Pentagon, which was obtained by The

According to the letter, Stoffel's Pennsylvania-based firm was awarded a
contract last year by the Iraqi Ministry of Defense to help overhaul its
aging Soviet-era military equipment, mostly T-55 tanks and artillery. Wye
Oak Technology delivered some refurbished tanks in November to Iraq's 1st
Mechanized Brigade.

As part of the contract, senior Defense Ministry officials required
Stoffel's payments to be processed through a Lebanese middleman appointed by
the ministry, according to the Dec. 3 letter.

By November, Stoffel was seeking a payment of $24.7 million, submitting
invoices directly to the Defense Ministry. The ministry, in turn, cut three
separate checks, sending each of them to the Lebanese businessman for
"processing," people familiar with the contract said.

The middleman's role was to act as a sort of escrow account for the
financial transactions, reconciling invoices and dispensing the payments,
sources said.

But after the businessman failed to send him the money, Stoffel complained
to U.S. officials in Washington that he suspected that the middleman's true
role was to route payments back to Iraqi officials in the form of kickbacks,
people familiar with the contract said.

He also told the Pentagon in his letter that the middleman was withholding
payments in an attempt to force him to use subcontractors linked to the
middleman and to Defense Ministry officials.

Stoffel spoke about his concerns with representatives from Santorum's
office. Santorum, in turn, wrote Defense Secretary Donald H. Rumsfeld on
Dec. 3 asking him to raise the issue with Iraqi Defense Minister Hazem

"I would appreciate comment on how the Department of Defense can assist" Wye
Oak Technology in recovering payment for services provided, Santorum wrote.

Stoffel also met with John A. "Jack" Shaw, deputy undersecretary of Defense
for international technology security, whose office monitored weapons sales
to Iraq. In a later letter, Stoffel urged Shaw to require that a known
accounting firm be hired to oversee the contract. He warned in his letter
that the weapons contract "has fallen prey to . corruption and

Shaw was profiled in Times stories last year after coming under
investigation in an unrelated matter. He was subsequently removed from his
job. His office forwarded Stoffel's complaint to the Department of the Army.

"We are looking into the issue," said Army Lt. Col. Joseph Yoswa, a Pentagon

One source said that Stoffel's complaints trickled down to British Brig.
Gen. David Clements, the deputy commander of the mission to train Iraqi
troops. Clements called together Stoffel, Wemple and the Lebanese
businessman to sort out the problem.

Clements summoned Stoffel from the U.S. to Iraq meet at the Taji military
base in early December, several sources said.

After several days of discussions, Clements told the businessman to release
the money, sources said. On Dec. 8, Stoffel and Wemple were returning to
Baghdad with their Iraqi interpreter when they were attacked.

The attackers stole Stoffel's computer from the scene. About a week later, a
video showing photographs and identity documents of Stoffel and Wemple was
posted on a website frequently used by insurgent groups. A group calling
itself the Brigades of the Islamic Jihad claimed responsibility for the
killings. The group was not previously known to terrorism experts.

The timing and the unusual details of the killings have raised suspicions in
the U.S. and Iraq that the video was a ruse to disguise an assassination.

"The video was very unusual," said Evan Kohlman, a terrorism consultant who
examined the video.

"It didn't show bodies or the killing, but only photos, documents and
materials taken from the bodies. It is certainly possible that someone
[other than insurgents] manufactured the video."

Army Capt. Steve Alvarez, a U.S. spokesman, acknowledged that Clements had
spoken with Stoffel, but denied that Stoffel had mentioned "any corruption"
during their conversations.

Instead, he said that Stoffel had complained about the "difficulties he was
experiencing in getting the start-up funds" for equipping the mechanized
brigade. Clements refused a request for an interview.

"There really isn't much more to our involvement," Alvarez wrote in response
to a query from The Times. He referred further questions to the Iraqi
Ministry of Defense.

Nick Hutchinson, the U.S. senior advisor to the Ministry of Defense who also
met with Stoffel, did not respond to requests for comment.

An Iraqi Defense Ministry spokesman arranged an interview with a senior
defense official, but then forbade a reporter to ask questions about the
contract, calling it too "dangerous."

The Lebanese businessman could not be reached for comment.

Stoffel had long been active in the arms business. Since at least the
mid-1990s, he worked with U.S. intelligence officials to obtain enemy
weaponry to allow the U.S. military to examine and test the items, according
to contract documents obtained by The Times.

In this work, Stoffel developed contacts across Eastern Europe, particularly
in Ukraine and Bulgaria. He purchased weapons including surface-to-air
missiles and antiaircraft systems, the documents show.

After the invasion of Iraq in March 2003, Stoffel went to Baghdad to pursue
business opportunities afforded by the Pentagon's multibillion-dollar Iraqi
reconstruction program.

He became concerned about possible corruption in the U.S. contracting
process, and reported his suspicions to U.S. investigators in spring 2004.

A U.S. official said the investigation into those charges was ongoing.

Miller and Silverstein reported from Washington and McDonnell from Baghdad.

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