Iraq contractor admits to bribery and fraud

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.

Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
FROM OUR SPONSORS
JOIN THE DISCUSSION
Close [ x ] More from GovExec
 
 

Thank you for subscribing to newsletters from GovExec.com.
We think these reports might interest you:

  • Going Agile:Revolutionizing Federal Digital Services Delivery

    Here’s one indication that times have changed: Harriet Tubman is going to be the next face of the twenty dollar bill. Another sign of change? The way in which the federal government arrived at that decision.

    Download
  • Cyber Risk Report: Cybercrime Trends from 2016

    In our first half 2016 cyber trends report, SurfWatch Labs threat intelligence analysts noted one key theme – the interconnected nature of cybercrime – and the second half of the year saw organizations continuing to struggle with that reality. The number of potential cyber threats, the pool of already compromised information, and the ease of finding increasingly sophisticated cybercriminal tools continued to snowball throughout the year.

    Download
  • Featured Content from RSA Conference: Dissed by NIST

    Learn more about the latest draft of the U.S. National Institute of Standards and Technology guidance document on authentication and lifecycle management.

    Download
  • GBC Issue Brief: The Future of 9-1-1

    A Look Into the Next Generation of Emergency Services

    Download
  • GBC Survey Report: Securing the Perimeters

    A candid survey on cybersecurity in state and local governments

    Download
  • The New IP: Moving Government Agencies Toward the Network of The Future

    Federal IT managers are looking to modernize legacy network infrastructures that are taxed by growing demands from mobile devices, video, vast amounts of data, and more. This issue brief discusses the federal government network landscape, as well as market, financial force drivers for network modernization.

    Download
  • eBook: State & Local Cybersecurity

    CenturyLink is committed to helping state and local governments meet their cybersecurity challenges. Towards that end, CenturyLink commissioned a study from the Government Business Council that looked at the perceptions, attitudes and experiences of state and local leaders around the cybersecurity issue. The results were surprising in a number of ways. Learn more about their findings and the ways in which state and local governments can combat cybersecurity threats with this eBook.

    Download

When you download a report, your information may be shared with the underwriters of that document.