Video: U.S. corruption in Iraq exposed

updated 2/2/2006 8:16:22 PM ET 2006-02-03T01:16:22

A former U.S. occupation official in Iraq pleaded guilty Thursday to conspiring to steal more than $2 million and rigging bids on $8.6 million in reconstruction contracts.

Robert J. Stein, 50, of Fayetteville, N.C., admitted that he and his coconspirators smuggled millions of dollars out of Iraq into the United States aboard commercial airliners and laundered cash through multiple bank accounts in Switzerland, Amsterdam and Romania.

Stein was a Defense Department employee who served as a contract official for the Coalition Provisional Authority in Iraq, controlling more than $82 million in funds slated for rebuilding the Middle Eastern country.

He told U.S. District Judge Colleen Kollar-Kotelly that he also stole $600,000 in cash and used coalition money to buy dozens of machine guns and other weapons for use by a private security company he and his coconspirators had formed to operate in Iraq.

The bulk of the bid-rigging benefited businessman Philip H. Bloom, who faces federal conspiracy and money laundering charges. Bloom’s name was not mentioned in court Thursday. But prosecutors have identified him and his role in the Stein conspiracy in other court papers.

Jewelry, other favors
In exchange for steering contracts to Bloom, Stein and others received plane tickets, jewelry, alcohol and sexual favors from women at Bloom’s villa in Baghdad.

Bloom, a U.S. citizen who lived in Romania for many years, and five U.S. Army Reserve officials have been implicated with Stein in the theft and kickback scheme, according to court records.

Stein told the judge that Bloom, whom he referred to as “coconspirator number 6,” made the initial approach about the scheme and that the thefts and bid-rigging “just came into play.”

When Kollar-Kotelly asked who was in charge, Stein said, “I’d have to say myself, yes ma’am.”

The bid-rigging scheme was elaborate, calling for Bloom to submit several bids for companies he controlled and others that did not exist. Some of the bids were high, while others were low.

All of the bids came in under $500,000 each because that was the limit of Stein’s authority to award a contract in Hillah, a town 50 miles south of Baghdad.

Bloom’s companies won contracts for a new police academy for Hillah and renovation of the public library near Karbala.

Weapons transactions
Because he was convicted of fraud in 1996, Stein was a felon and could not buy weapons in the United States. Instead, he said he had others buy guns in Illinois, Minnesota, North Carolina and Virginia.

Those weapons — including grenade launchers, fully automatic machine guns, pistols and silencers — were delivered to Fort Bragg, N.C., and then distributed among the co-conspirators.

As part of the plea deal, Stein agreed to cooperate with federal authorities and to make restitution of $3.6 million. Most of the restitution will be satisfied through government seizures of Stein’s assets.

Defense attorneys and prosecutors agreed, as part of the deal, that Stein could face up to 21 years in prison on bribery and money-laundering charges, plus up to 11 years in prison for firearms violations.

But the deal’s terms allow Stein to be sentenced to a lesser sentence if prosecutors conclude that he cooperated fully and ask Kollar-Kotelly to decrease the penalty.

© 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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