In war, there is plenty of room for corruption

Soon after interim Prime Minister Iyad Allawi took office last summer, he announced plans to create a tank division for the new Iraqi army.

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The U.S. contractor working on the project repeatedly warned the task force headed by Army Lt. Gen. David H. Petraeus that a Lebanese middleman involved in the deal might be routing kickbacks to Iraqi Defense Ministry officials. But senior U.S. military officials did not act on the contractor's pleas for tighter financial controls, according to documents and interviews.

"If we proceed down the road we are currently on, there will be serious legal issues that will land us all in jail," the contractor, Dale Stoffel, wrote in a Nov. 30 e-mail to a senior assistant to Petraeus.

Eight days later, Stoffel was shot dead in an ambush near Baghdad. The killing is being investigated by the FBI, according to people who have been interviewed by the bureau.

Since then, senior U.S. military officials have continued to work with the middleman, Raymond Zayna, who has taken over part of Stoffel's contract, documents and interviews show.

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On Aug. 16, Stoffel's firm, Wye Oak Technology of Monongahela, Pa., signed a "broker's agreement" with the Defense Ministry, giving Stoffel the exclusive right to buy tanks and other equipment for the mechanized division on the ministry's behalf.

Stoffel was awarded the contract without competitive bidding.

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Iraqi Deputy Defense Minister Mashal Sarraf insisted on another unusual provision, according to sources with knowledge of the contract: He required that Stoffel conduct all financial transactions through middleman Zayna.

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In conversations with military officials, Stoffel complained that Zayna was charging him a 3% fee on financial transactions. He suspected that a portion of the fee was being kicked back to the Defense Ministry. Stoffel also said Zayna was trying to force him to use certain subcontractors that he believed were secretly controlled by Zayna and Iraqi officials.

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By October, the Defense Ministry had issued Zayna's firm $24.7 million in payment for the refurbishing work Stoffel had done, the contractor told military officials.

The money was never delivered to Stoffel, who in October began complaining to U.S. officials in Washington and Baghdad.

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"There is no oversight of the money and if/when something goes wrong, regardless of how clean our hands are, heads will roll and it will be the heads of those that are reachable, and the people who are suppose to know better (US citizens, military, etc.)," Stoffel wrote in the November e-mail to Styles.

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He warned of consequences if the money was not recovered.

"News of it will be on the front page under the photos of President Bush, [Defense Secretary Donald H.] Rumsfeld, me" and Petraeus' task force, Stoffel wrote to another military officer in early December. "Jobs will be lost and congressional hearings will be held."

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Since the killing, U.S. military officials have continued working with Zayna. He is doing construction work on a U.S.-controlled military base outside Baghdad related to the project, said officials with the U.S.-led coalition.

Stoffel's firm tried unsuccessfully to keep the contract. Wye Oak Technology sent a letter to U.S. and Iraqi officials on Jan. 25 saying it was prepared to resume work so long as "transparency and accountability" were established.

The U.S. military and Iraqi Defense Ministry have not responded. A Wye Oak official declined to comment.

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Coalition officials met in February with the Defense Ministry to try to track down the $24.7 million.

So far, they have had no luck accounting for the money.
  LA Times article

And really, I think Mr. Stoffel was a little naive about the consequences. Bush and Rumsfiend were never in any danger...only Stoffel.