Ex-Iraq contractor admits stealing

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ASSOCIATED PRESS

A former U.S. contracting official in Iraq admitted he conspired to steal more than $2 million in reconstruction money and to award contracts to a businessman in exchange for more than $1 million in cars, jewelry and cash.

Robert J. Stein Jr., 50, of Fayetteville, N.C., is expected to enter his guilty plea in U.S. District Court in Washington today. His would be the first conviction in a federal investigation that so far has implicated at least seven persons.

Stein, a former contracting official for the Coalition Provisional Authority in Iraq, acknowledged his role in the conspiracy in a signed statement filed with the court.

The businessman, Philip H. Bloom, also faces federal conspiracy and money laundering charges. Mr. Bloom is not named in Stein's statement but has been identified elsewhere by prosecutors and is in federal custody in Washington.

Five U.S. Army Reserve officers who worked in Iraq also were part of the conspiracy, according to court papers.

Rita Bosworth, a federal public defender in Washington who is representing Stein, had no comment. John Nassikas, Mr. Bloom's lawyer, also declined to comment.

Stein, who has an earlier federal fraud conviction, used the money to buy a single-engine Cessna airplane, a top-of-the-line Porsche and other cars, grenade launchers, machine guns, diamond rings and other jewelry, and property in North Carolina, he said in his signed statement.

Stein said he helped steer more than $8.6 million in contracts to companies controlled by Mr. Bloom, a U.S. citizen who has lived in Romania for many years. The contracts were for less than $500,000 each, the limit of Stein's authority as the top contracting official in Hillah, 50 miles south of Baghdad.

Projects won by Mr. Bloom's companies included a new police academy for Hillah and renovation of the public library in nearby Karbala.

The statement includes frank e-mails between Stein and Mr. Bloom about payments and phony bids for contracts. "I love to give you money," Stein wrote after approving a $200,000 contract for the police academy in January 2004.

In another exchange, Stein apologizes for being "businesslike" and cautions Mr. Bloom to avoid using the same company name on all contract bids, which could arouse suspicion. Mr. Bloom agrees, adding, "Since we are paid in cash it really doesn't matter tax wise."

Mr. Bloom supplied Stein and others with "business class and first class plane tickets, watches and other jewelry, alcohol, cigars, sexual favors from women ... at his villa in Baghdad, and money laundering services," for the stolen reconstruction funds, the statement said.

The U.S.-controlled CPA ran Iraq from shortly after the March 2003 invasion until June 2004. It had final say over spending from the Development Fund for Iraq, made up mainly of Iraqi oil revenue.

The case against Stein has its roots in audits performed by Inspector General Stuart W. Bowen Jr., who is looking into Iraqi reconstruction contracts.