Inquiry On Graft In Iraq Focuses On U.S. Officers

Inquiry on graft in Iraq focuses on U.S. officers

http://www.iht.com/articles/2009/02/...ica/15iraq.php

By James Glanz, C.j. Chivers and William K. Rashbaum
Published: February 14, 2009

U.S. government authorities examining the early, chaotic days of the $125 billion American-led effort to rebuild Iraq have significantly broadened their inquiry to include senior American military officers who oversaw the program, according to interviews with senior government officials and court documents.

Court records show that last month investigators subpoenaed the personal bank records of Colonel Anthony Bell, who is now retired from the army but who was in charge of reconstruction contracting in Iraq in 2003 and 2004 when the small operation grew into a frenzied attempt to remake the country's broken infrastructure. In addition, investigators are examining the activities of Lieutenant Colonel Ronald W. Hirtle of the Air Force, who was a senior contracting officer in Baghdad in 2004, according to two U.S. government officials involved in the inquiry.

It is not clear what specific evidence exists against the two men, and both said they had nothing to hide from investigators. Yet officials say that several criminal cases over the past few years point to widespread corruption in the operation the men helped to run. As part of the inquiry, the authorities are taking a fresh look at information given to them by Dale C. Stoffel, an American arms dealer and contractor who was killed in Iraq in late 2004.

Before he was shot on a road north of Baghdad, Stoffel drew a portrait worthy of a pulp crime novel: tens of thousands of dollars stuffed into pizza boxes and delivered surreptitiously to the American contracting offices in Baghdad, and payoffs made in paper sacks that were scattered in "dead drops" around the Green Zone, the nerve center of the United States government's presence in Iraq, two senior U.S. government officials said.

Stoffel, who gave investigators information about the office where Bell and Hirtle worked, was deemed credible enough that he was granted limited immunity from prosecution in exchange for his information, according to government documents obtained by The New York Times and interviews with officials and Stoffel's lawyer, John Quinn Jr. There is no evidence that his death was related to his allegations of corruption.

Prosecutors have won 35 convictions on cases related to reconstruction in Iraq, yet most of them involved private contractors or midlevel officials. The current inquiry is aiming at higher-level officials, according to investigators involved in the case, and is also trying to determine if there are connections between those officials and figures in the other cases. Although Bell and Hirtle were military officers, they worked in a civilian contracting office.

"These long-running investigations continue to mature and expand, embracing a wider array of potential suspects," a U.S. government investigator said.

The reconstruction effort, intended to improve services and convince Iraqis of American good will, largely managed to do neither. The wider investigation raises the question of whether American corruption was a primary factor in damaging an effort whose failures have been ascribed to poor planning and unforeseen violence.

The investigations, which are being conducted by the Special Inspector General for Iraq Reconstruction, the Justice Department, the army's Criminal Investigation Command and other U.S. government agencies, cover a period when millions of dollars in cash, often in stacks of shrink-wrapped bricks of $100 bills, were dispensed from a loosely guarded safe in the basement of one of Saddam Hussein's former palaces.

Former American officials describe payments to local contractors from huge sums of cash dumped onto tables and stuffed into sacks as if it were Halloween candy.

"You had no oversight, chaos and breathtaking sums of money," said Senator Claire McCaskill, a Missouri Democrat who helped create the Wartime Contracting Commission, an oversight board. "And over all of that was the notion that failure was O.K. It doesn't get any better for criminals than that set of circumstances."

In one case of graft from that period, Major John Cockerham of the army pleaded guilty to accepting nearly $10 million in bribes as a contracting officer for the Iraq war and other military efforts from 2004 to 2007, when he was arrested. Cockerham's wife has also pleaded guilty, as have several other contracting officers.

In Cockerham's private notebooks, Bell is identified as a possible recipient of an enormous bribe as recently as 2006, the two senior U.S. government officials said. It is unclear whether the bribe was actually offered or paid.

When asked if Cockerham had ever offered him a bribe, Bell said in a telephone interview, "I think we'll end the discussion," but stayed on the line. Bell's response was equally terse when asked if he thought that Hirtle had carried out his duties properly: "No discussion on that at this time."

The current focus on Bell is revealed in U.S. government court papers filed in Georgia, where he has a residence and is trying to quash a subpoena of his bank records by the Special Inspector General. The papers, dated Jan. 27, indicate that Bell's records were sought in connection with an investigation of bribery, kickbacks and fraud.

Bell said that he sought to quash the subpoena not because he had anything to hide, but because the document contained inaccuracies. "If they clean it up, I won't have a problem," he said, suggesting that he would cooperate. He declined to detail the inaccuracies, although his handwritten notations on the court papers indicated that the home address and the bank account number on the subpoena were incorrect.

Asked whether he knew why the records had been subpoenaed, he said, "That is not for me to direct what they're going to do."

Another case that has raised investigators' suspicions about top contracting officials involves a company, variously known as American Logistics Services and Lee Dynamics International, that repeatedly won construction contracts for millions of dollars despite a dismal track record.

One contracting official committed suicide in 2006 a day after admitting to investigators that she had taken $225,000 in bribes to rig bids in favor of the company. At least two other former contracting officials in Iraq have admitted to taking bribes in the case and are cooperating with investigators. It is unknown what information they may have provided on Hirtle, a high-ranking contracting official in Baghdad. But Hirtle signed the company's first major contract in Iraq in May 2004, a roughly $10 million deal to build arms warehouses for the fledgling Iraqi security forces, according to a copy of the contract and U.S. government officials. The warehouses went largely unbuilt. Investigators said the inquiry into the Lee case was continuing.

"I can't talk to any media right now, because I don't know anything about this and I've got to do some research on it," Hirtle said when reached by phone in California, before abruptly hanging up.

The next day, Hirtle said he had been "taken aback" by questions about an investigation involving himself. "I try to keep things as transparent and aboveboard as I can," he said, referring questions to an Air Force public affairs office.

The Air Force referred questions to the United States army Criminal Investigation Command, where a spokesman, Christopher Grey, said the command "does not discuss or confirm the names of persons who may or may not be under investigation."

An extraordinary element of the current investigation is a voice from beyond the grave: that of Stoffel, who died with a British associate, Joseph Wemple, in a burst of automatic gunfire on a dangerous highway north of Baghdad in December 2004 as he returned from a business meeting at a nearby military base.

A previously unknown Iraqi group claimed responsibility for the killings, which remain unsolved. The men may simply have been unlucky enough to be engulfed in the violence that was then just beginning to grip the country.

On May 20, 2004, a little more than a week after Hirtle signed the Lee company's warehouse contract, Stoffel was granted limited immunity by the Special Inspector General for what amounted to a whistle-blower's complaint. Copies of the immunity document were obtained from two former business associates of Stoffel.

The picture of corruption Stoffel painted, including the clandestine delivery of bribes, was "like a classic New York scenario," said a former business associate.

"Fifty thousand dollars delivered in pizza boxes to secure contracts," said the former associate, a consultant in the arms business with whom Stoffel sometimes worked in the former Eastern bloc. "Of course, it just looked like a pizza delivery."

It was Stoffel's experience with Eastern bloc weaponry that helped him win a contract to refurbish Iraq's Soviet-era tanks as part of a program to rebuild Iraq's armed forces. Stoffel's company remains locked in a dispute over payments it says are owed by the Iraqi government.

His problems with American officials were what led him to make the accusations of corruption. Stoffel, the associate said, "was trying to do this as quietly as possible, to blow the whistle."

"He knew enough about what was going on, and he was getting pretty frustrated."