An American businessman who is at the heart of one of the biggest corruption cases to emerge from the reconstruction of Iraq has pleaded guilty to conspiracy, bribery and money-laundering charges, according to documents unsealed yesterday in federal court in Washington.
As part of the plea, Philip H. Bloom admitted his part in a scheme to give more than $2 million in cash and gifts to U.S. officials in exchange for their help in getting reconstruction contracts for his companies. Bloom's firms won $8.6 million in reconstruction deals, with an average profit margin of more than 25 percent.
Yesterday's filings included e-mails that provide insight into the fraud. In one, an Army Reserve officer who allegedly helped Bloom secure his contracts expresses gratitude for Bloom's largesse.
"The truck is Great!!! I needed a new truck . . . People I work with cannot stop commenting on how much they love it," the officer wrote in a Sept. 2, 2004, message to Bloom. The officer then added a bit of reassurance: "If there were any smoking guns, they would have been found months ago."
The reassurance was premature. Bloom's deals soon attracted the interest of investigators, and the case has ensnared three officials of the U.S.-led Coalition Provisional Authority, which ran Iraq for a year after Saddam Hussein's regime was toppled.
More arrests are likely. The documents unsealed yesterday refer to an unidentified co-conspirator who was chief of staff for the CPA office in Al-Hillah, which supervised the reconstruction of all of south-central Iraq.
According to Bloom's plea agreement, which was signed in February, he faces up to 40 years in prison, five years of supervised release and a fine of $750,000. He also must repay the government $3.6 million and forfeit $3.6 million in assets.
John N. Nassikas, Bloom's attorney, said that his client is cooperating with investigators and that he hopes to have Bloom's prison sentence reduced.
Bloom's cooperation may provide investigators with further insight into a case that highlights how some were able to exploit the chaotic, freewheeling and cash-rich environment that characterized Iraq in the months after the U.S. invasion. That initial period was marked by little oversight, but that changed as auditors have fanned out across the country looking for signs of impropriety.
"This shows oversight is working," said Stuart W. Bowen Jr., special inspector general for Iraq reconstruction, whose office uncovered Bloom's crimes. "It will send a message to those involved in similar schemes that we are on the case."
Bowen said his office is investigating 70 other cases that involve criminal allegations.
The Bloom case came to light in November when he and CPA official Robert J. Stein Jr. were charged with fraud, money-laundering and conspiracy -- the first criminal corruption case arising from the Iraq reconstruction. Stein, already a convicted felon when he was hired as a CPA contracting officer, pleaded guilty in February.
Two others have been charged in connection with the case. They are Michael Brian Wheeler and Debra Harrison, both lieutenant colonels in the Army Reserve.
The court papers unsealed yesterday paint a picture of how Bloom, a businessman with operations in the United States and Romania, used gifts of cash, cars, plane tickets and jewelry to secure lucrative reconstruction contracts from December 2003 to December 2005. Bloom also supplied women to provide sexual favors at his Baghdad villa to the CPA officials who helped ensure that his companies won the contracts he wanted.
In many cases, the documents show, Bloom submitted multiple bids on the same contracts but did so under different names to disguise the fact that the CPA officials were steering the deals his way. He also used elaborate money-laundering tactics to hide the bribes he handed out in return.
E-mail exchanges between Bloom and his conspirators show that they had highly specific demands for what bribes they wanted. One official coveted a 2004 GMC Yukon sport-utility vehicle with all-wheel drive, a "Summit White" exterior and a "Sandstone Leather" interior. Another, the chief of staff, apparently instructed Bloom through an intermediary that he wanted an electric-blue Nissan 350Z hard-top convertible but that there were only two such cars in the western United States. "There is a car in California that has all these features, plus a satellite radio. Cost (including shipping to Salt Lake City): $35,990," the unidentified intermediary wrote to Bloom in a June 25, 2004, message.
Another official wrote to Bloom two months later: "I'll let you know when I actually pick up the car. At that point you'll get a great big thank you and I owe you from me."
- 176 War Profiteers Site