U.S. says businessman bribed coalition officials to land rebuilding
contracts
WASHINGTON - A criminal complaint unsealed in federal court in
Washington on Wednesday alleges a web of corruption and bid rigging in
Iraq by officials who worked with the now-defunct Coalition Provisional
Authority, the U.S.-led agency that ran Iraq for more than a year after
the 2003 invasion.
The complaint accuses an American-Romanian businessman, Philip H. Bloom,
of paying officials from the coalition's south-central region "bribes,
kickbacks and gratuities, amounting to at least $200,000 per month," in
order to obtain reconstruction contracts through a bid-rigging scam.
According to the complaint, Bloom "conspired with United States
government contract employees and military officials to obtain
fraudulently government contracts."
A government affidavit alleges that in one instance, the officials
rigged bids for contracts in Hillah and Karbala, two cities 50 to 60
miles south of Baghdad. In some cases, Bloom's companies performed no
work, Patrick McKenna Jr., an investigator for the U.S. special
inspector general for Iraq, said in the affidavit.
Efforts to reach representatives for Bloom were unsuccessful.
Bloom or companies he controls made bank deposits of $353,000 on behalf
of at least two CPA officials and bought them real estate in North
Carolina as well as vehicles and jewelry worth more than $280,000 in
2004 and 2005, McKenna said.
The complaint says one of the U.S. officials was the comptroller for the
region in Iraq based in Hillah and controlled $82 million in cash.
One official said to admit involvement
Another coalition official, who worked with the first, has been
cooperating with investigators and has admitted he "unlawfully received
cash and goods" from Bloom, according to the complaint.
Bloom, according to the complaint, ran several companies in Iraq and
Romania, including one called GBG Logistics.
According to a biography of Philip Bloom on the Web site of one of his
companies, he is an "expatriate America with a war chest of experiences???
operating a variety of firms overseas since the 1970s, including Haitian
and Puerto Rican airlines. The biography says that "Bloom is possessed
off an uncanny knack for finding business, almost psychic in nature."
GBG Logistics says on its Web site that it has worked on a variety of
Iraq reconstruction projects. "As one of the first private firms to
enter the Iraqi market in April 2003, GBG Logistics is primarily devoted
to identifying and developing new business opportunities in the
reconstruction effort," it says.
There have been allegations and suspicions of corruption under the
coalition government, which ran Iraq from just after the invasion in
March 2003 until June 2004 and was headed by former Ambassador L. Paul
Bremer III, and during the Iraq reconstruction process, but this is the
first criminal case to be brought in U.S. courts alleging wrongdoing by
coalition officials.
Previously, the Hillah region came under scrutiny after the special
inspector general for Iraq reconstruction reported in an audit that $100
million in seized Iraqi funds could not be accounted for.
The Associated Press contributed to this report.
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