US official admits $2.9m theft and corruption during rebuilding of Iraq

IRAQ - In the first United States corruption conviction relating to the occupation of Iraq, a former official has pleaded guilty to stealing more than US$2 million ($2.9 million) of reconstruction funds and taking over $1 million ($1.45 million) worth of contract kickbacks under a deal with an American businessman.

Robert Stein, a 50-year-old contractor for the now disbanded Coalition Provisional Authority, who had a previous criminal record for fraud, admitted five felony counts, of conspiracy, money-laundering, bribery and illegal possession of machine and handguns.

The businessman, identified as Philip Bloom, also faces federal conspiracy and money laundering charges, and is understood to be in custody. Five US Army reserve officers are also implicated, two of whom have also been arrested.

The case paints an astonishing picture of incompetence and carelessness in the running of the CPA, which administered Iraq between mid-2003 and June 2004. Stein not only took money from Bloom in return for steering some US$9 million ($13 million) of contracts in his direction, he also pilfered US$2 million of aid earmarked for reconstruction.

The ill-gotten gains financed a lavish spending spree. Stein used them to buy Lexus and Porsche cars, a light aircraft, watches, jewels, guns and grenade launchers, as well as two plots of land in his native North Carolina.

Bloom is said to have provided his benefactors with money, first-class air tickets, and sexual favours provided by women kept by the businessman in a villa in Baghdad.

Among the contracts won by Bloom's companies were a new police academy for Al Hillah and the renovation of a public library in nearby Karbala.

- INDEPENDENT