By Investigative Unit Producer
NBC News
updated 11/17/2005 5:30:17 AM ET 2005-11-17T10:30:17

A criminal complaint unsealed in federal court in Washington on Wednesday alleges a web of corruption and bid rigging in Iraq by officials who worked with the now-defunct Coalition Provisional Authority, the U.S.-led agency that ran Iraq for more than a year after the 2003 invasion.

The complaint accuses an American-Romanian businessman, Philip H. Bloom, of paying officials from the coalition’s south-central region "bribes, kickbacks and gratuities, amounting to at least $200,000 per month," in order to obtain reconstruction contracts through a bid-rigging scam.

According to the complaint, Bloom "conspired with United States government contract employees and military officials to obtain fraudulently government contracts."

A government affidavit alleges that in one instance, the officials rigged bids for contracts in Hillah and Karbala, two cities 50 to 60 miles south of Baghdad. In some cases, Bloom’s companies performed no work, Patrick McKenna Jr., an investigator for the U.S. special inspector general for Iraq, said in the affidavit.

Efforts to reach representatives for Bloom were unsuccessful.

Bloom or companies he controls made bank deposits of $353,000 on behalf of at least two CPA officials and bought them real estate in North Carolina as well as vehicles and jewelry worth more than $280,000 in 2004 and 2005, McKenna said.

The complaint says one of the U.S. officials was the comptroller for the region in Iraq based in Hillah and controlled $82 million in cash.

One official said to admit involvement
Another coalition official, who worked with the first, has been cooperating with investigators and has admitted he "unlawfully received cash and goods" from Bloom, according to the complaint.

Bloom, according to the complaint, ran several companies in Iraq and Romania, including one called GBG Logistics.

According to a biography of Philip Bloom on the Web site of one of his companies, he is an "expatriate America with a war chest of experiences” operating a variety of firms overseas since the 1970s, including Haitian and Puerto Rican airlines. The biography says that "Bloom is possessed off an uncanny knack for finding business, almost psychic in nature."  

GBG Logistics says on its Web site that it has worked on a variety of Iraq reconstruction projects. "As one of the first private firms to enter the Iraqi market in April 2003, GBG Logistics is primarily devoted to identifying and developing new business opportunities in the reconstruction effort," it says.

There have been  allegations and suspicions of corruption under the coalition government, which ran Iraq from just after the invasion in March 2003 until June 2004 and was headed by former Ambassador L. Paul Bremer III, and during the Iraq reconstruction process, but this is the first criminal case to be brought in U.S. courts alleging wrongdoing by coalition officials.

Previously, the Hillah region came under scrutiny after the special inspector general for Iraq reconstruction reported in an audit that $100 million in seized Iraqi funds could not be accounted for.

The Associated Press contributed to this report.

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