US: Head of firm paid to track Iraq spending investigated

Robert Raggio quit his $97,000-per-year government job
as a financial manager for the Iraq reconstruction effort in September
2005. He said in his resignation form that he wanted to "pursue
other opportunities."

That same day, Raggio's newly formed company, Reviewer Management
International (RMI), received a U.S. contract to audit $7.3billion in
Iraqi reconstruction spending, according to Army documents obtained by
USA TODAY under the Freedom of Information Act.

The $1.5 million contract was designed to help investigators fight
fraud in Iraq. Now, Raggio is under investigation.

Before he quit his government position, Raggio wrote the requirements
for the federal contract at the same time he negotiated to obtain it
for RMI, according to the documents. The Army's Suspension and
Debarment Office suspended Raggio and his consulting firm from getting
new government contracts in August amid an ongoing investigation into
whether he violated conflict of interest laws.

The laws, which bar government officials from benefiting from their
official actions, carry penalties of up to five years in prison. Civil
penalties can include fines equal to the amount of the contract, Army
documents say.

The suspension and the investigation have not been made public

Army contracting officials began looking into the case after the
government's Iraq reconstruction watchdog, Stuart Bowen, passed along
an anonymous complaint his office received about Raggio, documents

Raggio did not respond to repeated telephone messages left at the
phone number he listed as RMI's office, which public records show is
his brother's home in suburban New York.

RMI was hired to create a database to track the $7.3 billion in Iraqi
government money U.S. officials doled out -- much of it in $100 bills
shipped to the country on pallets -- after the 2003 invasion. Federal
auditors had uncovered a bribery scheme involving more than
$8.6million from the Development Fund for Iraq and wanted to determine
whether there was more corruption.

The Army failed to properly oversee Raggio's contract and after nearly
a year of work he delivered a database that was incomplete, unreliable
and nearly unusable, according to a January report from Bowen, the
Special Inspector General for Iraq Reconstruction. The database
couldn't meet one of its primary goals: allowing investigators to
connect payments to the U.S. officials who made them, Bowen's report

RMI told investigators its database included more than 300,000
entries; Bowen's report described it as "only a collection of
records that were not audited or effectively connected to one

Army contracting officials didn't monitor the contract or ensure RMI
filed required status reports every two months, Bowen's report said.
The report faulted the contract's initial requirements, which the Army
documents reveal Raggio wrote.

Raggio had incorporated RMI on Aug. 5, 2005 -- the day after the Joint
Contracting Command-Iraq in Baghdad solicited proposals for auditing
the Development Fund for Iraq. At the time, Raggio was the financial
manager of the Accelerated Iraq Reconstruction Program, one of the
fund's main components, the Army documents say.

RMI was given the contract after the government's aborted attempt to
seek competitive bids, Air Force Lt. Col. Joe Mazur of the Joint
Contracting Command-Iraq said in an interview in April.

Mazur said an unsigned memo in the contract file showed the
competitive bidding process for the contract was canceled because the
process had been "compromised," meaning one or more of the
bidders had inside information about the contract. Mazur said another
unsigned document indicated RMI got the contract because it was the
only company able to do the work in time to meet a deadline at the end
of 2005, which was later extended to the end of 2006. 

AMP Section Name:Corruption
  • 21 Reconstruction
  • 106 Money & Politics
  • 187 Privatization

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