U.S. put ex-con in charge of cash for rebuilding of Iraq / He's now charged with taking bribes while in Baghdad

U.S. put ex-con in charge of cash for rebuilding of Iraq / He's now charged with taking bribes while in Baghdad

- James Glanz, New York Times
Friday, November 18, 2005

A North Carolina man who was charged Thursday with accepting kickbacks and bribes was hired as a controller and financial officer for the U.S. occupation authority in Iraq despite having served prison time for felony fraud in the 1990s.

The occupation job gave Robert Stein control over $82 million in cash earmarked for Iraqi rebuilding projects.

Along with a web of other conspirators who have not yet been named, Stein and his wife received "bribes, kickbacks and gratuities amounting to at least $200,000 per month" to steer lucrative construction contracts to companies run by another American, Philip Bloom, an affidavit outlining the criminal complaint says. Stein's wife, who was not named, has not been charged with wrongdoing in the case.

Bloom was charged with a range of crimes on Wednesday.

In the staccato language of the affidavit, filed in Federal District Court in the District of Columbia, Stein was charged with wire fraud, conspiracy, interstate transportation of stolen property and conspiracy to commit money laundering.

But the list of charges does little justice to the astonishing brazenness of the accusations described in the complaint, including a wire transfer of a $140,000 bribe, arranged by Bloom, to buy real estate for Stein in North Carolina. The affidavit also says that $65,762.63 was spent to buy cars for Stein and his wife (he bought a Chevrolet; she a Toyota), $44,471 for home improvements and $48,073 for jewelry out of $258,000 sent directly to the Bragg Mutual Federal Credit Union into accounts controlled by the Steins.

Stein's wife even used $7,151.58 of the money for a "towing service," the complaint says. Much of this money was intended for Iraqi construction projects, such as building a new police academy in the ancient city of Babylon and rehabilitating the library in Karbala, the southern city that is among the holiest sites for Shiite Muslims.

After Stein awarded contracts for this work to Bloom, who eventually received at least $3.5 million himself, according to the complaint, the work often was not performed or was done shoddily, the prosecutors allege.

Stein was arrested in North Carolina on Monday, the Justice Department said in a statement. He appeared in court on Tuesday, represented by Jane Pearce, an assistant federal public defender in North Carolina's Eastern District, said Elizabeth Luck, a spokeswoman for the office. The Eastern District includes Fayetteville, where Stein is listed as a homeowner.

Beyond confirming Stein's appearance in court, "we do not comment on pending litigation in this office," Luck said, adding that she could not say whether Stein planned to retain a private lawyer.

Little is known about Stein except that he served in the Army and was convicted in federal court in 1996 for "access device fraud," a felony. Court papers show that he was sentenced to eight months in prison and ordered to pay $45,339.25 in restitution.

Stein's lawyer in that case was Richard Glazier, who was reached by phone at his home in Fayetteville. He could not recall the details of the case, but said, "I recall it being a fairly basic case; I don't recall there being any substantial publicity with it."

The affidavit on Thursday alleges that on Jan. 22, 2004, Stein transferred $200 of money obtained through bribes to the clerk of U.S. District Court in North Carolina's Eastern District.

The payment, the affidavit explains, was an installment on the restitution payment that Stein had been ordered to pay on his earlier felony conviction.

Stein worked for the Grundy Marine Construction Co., based in Ponte Vedra Beach, Fla., in 2001 and 2002, said the company's vice president, Pete Caruk, in a telephone interview. Stein was fired when he was found to be falsifying payroll records and making out false invoices for nonexistent purchases of materials for a construction job at an Air Force base, Caruk said.

"This guy is a thief," Caruk said. "He's a con artist and a crook."

The Pentagon, which had authority over the Coalition Provisional Authority until it was dissolved in June 2004, said Thursday that it was receiving numerous press queries on Stein's background and the circumstances of his hiring. A spokesman at the Pentagon said that it was working to fulfill the requests but that no information would be available on Thursday.

The charges against Stein and Bloom have emerged from a sweeping probe of rebuilding contracts by a task force led by Stuart Bowen, the special inspector general for Iraq reconstruction, and including investigators from the criminal investigations division of the Internal Revenue Service, the immigration and customs enforcement section of the Department of Homeland Security, and the State Department's inspector general.

"The reconstruction of Iraq is, and must be, built on a foundation of integrity and honest business dealings," said Assistant Attorney General Alice Fisher in a statement. "The Department of Justice will pursue and prosecute anyone who attempts to exploit this vital process for their own personal or financial gain."

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