updated 8/24/2007 5:35:34 AM ET 2007-08-24T09:35:34

An Army officer has been charged with bribery after he allegedly promised to help a company secure military contracts in Iraq in return for $50,000.

Capt. Austin Key was arrested late Wednesday and freed Thursday. He is responsible for $500,000 bail, but was not required to post any cash or assets in part because he was expected to remain under Army supervision at Fort Drum, N.Y., where he is stationed with the 10th Mountain Division.

Prosecutor Christine Wong told a magistrate judge that Key “was caught red-handed in Iraq accepting what he believed to be a $50,000 bribe.”

Key’s lawyer, Raymond R. Granger, declined to comment outside court.

Federal authorities said the charges arose from actions Key took this month when he was stationed in Baghdad as a field ordering officer responsible for overseeing the administration of service and supply contracts worth hundreds of thousands of dollars.

Key, 27, of Watertown, N.Y., was accused of demanding $125,000 in July from a U.S. citizen who owns a business that provides services and supplies in Iraq through U.S. Army contracts, according to a criminal complaint filed in U.S. District Court in Manhattan.

Ensuring continued contracts
Prosecutors said Key told the person, who was identified in court papers only as a confidential informant, that the money would ensure that the informant’s company could continue to obtain Army contracts.

The business person reported the demands to law enforcement authorities. They arranged an Aug. 11 meeting at the U.S. military base at Camp Liberty, where Key told the informant he would help him secure future Army contracts in exchange for $50,000, the complaint said.

Key also demanded what would amount to the equivalent of 5 percent of any contracts Key steered toward the informant’s business, the complaint said.

At an Aug. 15 meeting, the informant gave Key $50,000 in cash, the complaint said. As he left the meeting, law enforcement authorities stopped Key and recovered the money.

According to the complaint, Key admitted in a written statement to federal agents that he had agreed to steer contracts to the informant in return for the bribe.

Max 15 years in prison
The bribery count carries a maximum penalty of 15 years in prison and a $250,000 fine.

In a separate case in San Antonio, Army contract officer Maj. John Cockerham, his wife, Melissa, and his sister Carolyn Blake were indicted Wednesday on charges including bribery, conspiracy, money laundering and obstruction. Prosecutors allege they took at least $9.6 million in bribes in 2004 and 2005 while Cockerham was stationed in Kuwait and responsible for contracts for Defense Department services, including bottled water for soldiers in Kuwait and Iraq.

Maj. Cockerham is accused of guaranteeing that contractors would receive lucrative contracts in exchange for cash deposited in bank accounts and safe deposit boxes by his wife and sister in Kuwait and Dubai. He and his wife have been held without bond since their arrest in Fort Sam Houston last month; Blake, arrested at her Sunnyvale home, is free on bail.

Maj. Cockerham’s attorney, Jimmy Parks Jr., has said the case was not as straightforward as prosecutors were presenting. He noted that Defense Department contracts have checks and balances requiring officers and lawyers above John Cockerham’s rank to check and approve contracts.

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