A contractor hired by the former Coalition Provisional Authority in Iraq has pleaded guilty to bribery and corruption charges in connection with numerous deals, according to court documents released last week.
Philip Bloom, a businessman who controlled several construction and service companies in Iraq and Romania and did business with the CPA in Al-Hillah, Iraq, pleaded guilty in March to conspiracy, bribery and money laundering. That plea, as well as other details of his activities, were sealed until last week, when government lawyers filed to have the information made public.
Federal officials expect more arrests to result from disclosures made as part of the plea bargain.
Bloom admitted to bribing Defense Department officials with more than $2 million in cash and goods to steer more than $8.6 million in contracts to his businesses, according to a Justice Department statement. The criminal activity took place from about December 2003 through December 2004, legal documents show.
Bloom's primary co-conspirator was Robert Stein, comptroller and funding officer of the CPA's South Central region, who pleaded guilty in February to conspiracy, bribery, money laundering and gun-related charges. E-mail exchanges between the two show they consulted closely as Bloom developed sham contract bids to create an appearance of competition for awards over which Stein had authority.
Bloom and Stein have admitted to exchanging cash and gifts such as jewelry, alcohol, first-class plane tickets and sexual favors from women at Bloom's private villa in Iraq, in consideration for contract awards and special treatment. Payments associated with the deals have been traced to bank accounts in Iraq, Romania, Switzerland and Amsterdam.
"I will send you our bids and bring with me the dummies ... I have five dummies per bid," wrote Bloom in a January 2004 e-mail to Stein.
In another e-mail, Stein assures Bloom that he had secured a contract for work at a police academy, and would have $200,000 for the contractor the following day. "I love to give you money," Stein wrote at the end of the message.
The Justice Department also has arrested and charged two lieutenant colonels in the Army Reserve as co-conspirators in the case. Government filings in Bloom's case refer to four co-conspirators, all Army Reserve officers reporting to Stein.
"There will be more arrests," said Jim Mitchell, assistant inspector general for congressional and public affairs in the office of the Special Inspector General for Iraq Reconstruction.
Mitchell said his office has about 70 suspected fraud cases open. Last month, an investigation by his office resulted in the arrest of a civilian translator with Titan Corp., who was charged with attempting to bribe an Iraqi official to assist with the sale of armored vests and other equipment.
Mitchell says the problem with contracting fraud in Iraq is not that regulations did not exist, but that they were sometimes not followed. "Until the CPA inspector general was created [in January 2004] there was little, if any, oversight and enforcement," Mitchell said. At that point, Bloom and Stein's operation already was well under way.
Bloom faces up to 40 years in prison, a five-year term of supervised release and a fine of $750,000. He must pay $3.6 million in restitution and forfeit $3.6 million in assets, the Justice Department said. He will be barred from contracting with the federal government for at least 10 years from the date of his sentencing.