Published: February 14, 2009
Federal 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(A writ requiring appearance in court to give testimony.) the personal bank records of Col. Anthony B. 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 Lt. Col. Ronald W. Hirtle of the Air Force, who was a senior contracting officer in Baghdad in 2004, according to two federal 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, Mr. 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 federal officials said.
Mr. Stoffel, who gave investigators information about the office where Colonel Bell and Colonel 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 Mr. Stoffel’s lawyer, John H. 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 Colonel Bell and Colonel 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 federal 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 federal 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, Maj. John L. 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. Major Cockerham’s wife has also pleaded guilty, as have several other contracting officers.
In Major Cockerham’s private notebooks, Colonel Bell is identified as a possible recipient of an enormous bribe as recently as 2006, the two senior federal officials said. It is unclear whether the bribe was actually offered or paid.
When asked if Major Cockerham had ever offered him a bribe, Colonel Bell said in a telephone interview, “I think we’ll end the discussion,” but stayed on the line. Colonel Bell’s response was equally terse when asked if he thought that Colonel Hirtle had carried out his duties properly: “No discussion on that at this time.”
The current focus on Colonel Bell is revealed in federal 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 Colonel Bell’s records were sought in connection with an investigation of bribery, kickbacks and fraud.
Colonel 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 Colonel Hirtle, a high-ranking contracting official in Baghdad. But Colonel 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 federal 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,” Colonel Hirtle said when reached by phone in California, before abruptly hanging up.
The next day, Colonel 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 Mr. Stoffel, who died with a British associate, Joseph J. 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 Colonel Hirtle signed the Lee company’s warehouse contract, Mr. 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 Mr. Stoffel.
The picture of corruption Mr. 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 Mr. Stoffel sometimes worked in the former Eastern bloc. “Of course, it just looked like a pizza delivery.”
It was Mr. 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. Mr. 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. Mr. 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.”
Reporting was contributed by Eric Schmitt from Washington, David Beasley from Atlanta, Margot Williams from New York, and Riyadh Mohammed from Baghdad.
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New report slams US reconstruction of Iraq
-NY Times
14 Dec 2008 01:41:47 GMT
Source: Reuters
NEW YORK, Dec 13 (Reuters) - An unpublished federal draft report depicts the U.S.-led reconstruction of Iraq as a $100 billion failure doomed by bureaucratic infighting, ignorance of basic elements of Iraqi society and waves of violence there, The New York Times reported in its Sunday editions.
The Pentagon issued inflated progress reports to cover up the reconstruction's failure once the effort began to lag, according to the Times, which received copies of the document from two people who had read the draft but were not authorized to comment publicly about it.
Former Secretary of State Colin Powell is cited as saying, for example, that in the months after the 2003 invasion the Defense Department "kept inventing numbers of Iraqi security forces -- the number would jump 20,000 a week! 'We now have 80,000, we now have 100,000, we now have 120,000.'"
Powell's contention was supported by both the former ground troops commander in Iraq, Lt. Gen. Ricardo Sanchez, and L. Paul Bremer, the civilian administrator before the Iraqi government takeover in June 2004. Powell declined to comment on his quoted remarks, the Times said.
The report, "Hard Lessons: The Iraq Reconstruction Experience," was compiled by the Office of the Special Inspector General for Iraq Reconstruction, led by Stuart Bowen Jr., a Republican lawyer who visits Iraq often and maintains a staff of engineers and auditors there, the newspaper said.
It was based on some 500 interviews and more than 600 audits, inspections and investigations on which Bowen's office has reported for years.
Bowen's deputy, Ginger Cruz, declined to comment to the newspaper on the substance of the history, but said it would be presented on Feb. 2 at the first hearing of the Commission on Wartime Contracting, created by Democrat-sponsored legislation.
Among the draft report's conclusions is that some five years after its largest foreign reconstruction project since the Marshall Plan following World War II, the U.S. government still does not have the policies, technical capacity or organizational structure needed for a project even approaching this one's scale, the newspaper said.
It found that the reconstruction effort did little more than restore what had been destroyed during the U.S. invasion and subsequent looting. And it concluded the effort had failed in part because no single agency in the U.S. government had primary responsibility for the job.
Partisan politics also figured in, as when a Republican lobbyist working for the U.S. occupation authority implored the Office of Management and Budget to fund $20 billion in new reconstruction money in August 2003.
"To delay getting our funds would be a political disaster for the President," wrote the lobbyist, Tom Korologos. "His election will hang for a large part on show of progress in Iraq and without the funding this year, progress will grind to a halt," the draft quoted Korologos as saying.
The Bush administration supported the request and Congress allocated the money later that year. (Writing by Christopher Michaud; editing by Todd Eastham)
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Iraq Auditor Warns of Waste, Fraud In Afghanistan
By Karen DeYoung and Walter Pincus
Washington Post Staff Writers
Monday, February 2, 2009; Page A06
After five years of investigations and 250,000 pages of audits, Stuart W. Bowen Jr. wishes he could say that the $50 billion cost of the U.S. reconstruction effort in Iraq was money accounted for and well spent.
"But that's just not happened," Bowen said.
Instead, the largest single-country relief and reconstruction project in U.S. history -- most of it done by private U.S. contractors -- was full of wasted funds, fraud and a lack of accountability under what Bowen, the congressionally mandated special inspector general for Iraq reconstruction, calls an "ad hoc-racy" of lax or nonexistent government planning and supervision.
And despite the Iraq experience, he said, the United States is making many of the same mistakes again in Afghanistan, where U.S. reconstruction expenditures stand at more than $30 billion and counting.
"It's too late to do the structural part and make it quickly applicable to Afghanistan," Bowen said in an interview last week. None of the substantive changes in oversight, contracting and reconstruction planning or personnel assignments that Congress, auditors and outside experts proposed as the Iraq debacle unfolded has been implemented in Afghanistan.
But President Obama could take several steps to mitigate future damage, Bowen said. They include devoting more attention to military and civilian personnel and to reconstruction and relief assignments, and taking advantage of the expertise developed through hard-won experience in Iraq. Instead of the "multiple versions" of the federal acquisition regulations adopted and amended by "multiple agencies" operating in Iraq, Obama "could just issue a FAR regulation applicable to Afghanistan that everyone will follow" in issuing and supervising contracts, he said.
"To bring this all together," Bowen said, "the president should order a Red Cell," a high-level group drawing from the departments of State and Defense and the U.S. Agency for International Development that would turn Obama's orders into action.
Bowen's office, known as SIGIR, is releasing a book today that recounts the Iraq experience and suggests how to avoid future mistakes. "Hard Lessons" is being published as the bipartisan Commission on Wartime Contracting holds its first public hearing. Created by Congress last year, the commission will examine expenditures in Iraq and Afghanistan and propose solutions for "systemic" problems that waste taxpayer dollars.
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Legislation to create the commission was introduced by Democratic Sens. James Webb (Va.) and Claire McCaskill (Mo.) and was inspired by the "Truman Committee," which conducted hundreds of hearings and investigations into government waste during and after World War II.
"Hard Lessons," a draft of which was leaked to the news media in December, concludes that the U.S. reconstruction effort in Iraq was a failure, largely because there was no overall strategy behind it. Goals shifted from "liberation" and an early military exit to massive, ill-conceived and expensive building projects under the Coalition Provisional Authority of 2003 and 2004. Many of those projects -- over budget, poorly executed or, often, barely begun -- were abandoned as security worsened.
In a preface to the 456-page book, Bowen writes that he knew the reconstruction was in trouble when he first visited Iraq in January 2004 and saw duffel bags full of cash being carried out of the Republican Palace, which housed the U.S. occupation government.
Security was a constant problem, not only for military and civilian officials serving in Iraq but also for SIGIR. Auditor Paul Converse was killed in March during a rocket attack in Baghdad, following a year in which five other SIGIR employees were wounded.
The book recounts, in colorful detail based on SIGIR interviews with nearly all the principals, the deep divisions during the same period between the Pentagon, under Donald H. Rumsfeld; the State Department under Colin L. Powell; and the White House office of national security adviser Condoleezza Rice. Former deputy secretary of state Richard L. Armitage recounts an argument between Rumsfeld and Rice in the fall of 2003 during which each said the other was in charge of supervising the Coalition Provisional Authority.
The book also includes numerous demonstrations of the Bush administration's lack of preparation to run Iraq after the March 2003 invasion. In one previously publicized case recounted in "Hard Lessons," Bowen's auditors discovered a cash disbursement of $57.8 million by the CPA to the U.S. comptroller for south-central Iraq. "Pallet upon pallet of hundred-dollar bills" were removed from the CPA vault in Baghdad and driven to the regional office in two unarmored SUVs. There, the local acting comptroller, Robert J. Stein Jr., who later was convicted for money laundering and fraud, had himself photographed with mountains of cash.
Overall, SIGIR and other law enforcement agencies have obtained 35 convictions, including two major bribery schemes involving $14 million solicited by U.S. military officers who ran Kuwait-based units contracting for the billions of dollars in supplies sent to Iraq.
SIGIR also reported on the inability of Iraqi firms to compete with U.S. contractors, due in part to the complicated U.S. bidding system: "Online contracting, which frequently entailed bids of more than a hundred pages, bewildered Iraqi contractors who were used to sealing a business deal with just a handshake."
When he took the job five years ago, Bowen said,
"I didn't know that we didn't have a system to protect our interests abroad in post-conflict or contingency operations. . . . It would have been a much funner job to issue 250 reports on how well our rebuilding program went . . . and that the money was well accounted for and that we're leaving Iraq a peaceful and democratic place and nonviolent country."
Given that $4 billion in appropriated U.S. reconstruction funds remain unspent in Iraq, Bowen's work is not likely to end anytime soon.
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Is America ripe for Hitler Mark II?
The answer to some; is impossible to happen, since we are living in a different time and people have learned not to fall in the trap of right-wing extremists. But many aspects of present conditions on the American ground may be somewhat similar to those of Germany in 1932.
To start with there is a high unemployment. There are many heavily-armed and angry right extremist groups. The nation to large extent is made of God-fearing political Zombies. What is needed is a charismatic leader who can formulate a political platform concentrating on blaming the Jews for the current economic meltdown and the niggers for sabotaging the 'American Century', undermining the Whitehouse and Washington traditions. Most of Churches with White Anglo Saxon Protestant members will support this plan as a divine salvation. Organisations like Black water can be asked to recruit, train and arm thousands, especially white veterans from the wars on Iraq and Afghanistan. Certain TV stations like Fox news will not be reluctant to support the plan. The so-called American intelligentsia can swallow their words the way the German intellectuals ended up rotting in concentration camps. If there is one country where it is possible for another Hitler to emerge, it is in the United States of America.
Adnan Darwash, Iraq Occupation Times
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