Audit Office on Iraqi Contracts Probes Bribery Case, Kickbacks
Friday, July 27, 2007
The Special Inspector General for Iraq Reconstruction is investigating a $15 million bribery case involving kickbacks that a U.S. Army officer allegedly accepted from contractors doing work in Iraq, in what would be the largest such case involving U.S. efforts to rebuild Iraq.
Maj. John L. Cockerham, a contracting officer, took up to $9.6 million in bribes from at least eight military contractors, according to court documents, and he expected to get at least another $5.4 million for giving them favorable contracts.
"This is the largest bribery case that has come out of Iraq to date," said Stuart Bowen Jr., the special inspector general. Neither he nor officials from the Justice Department would name the contractors.
More arrests of military and civilian personnel involved in similar scams are expected in the coming months, said sources close to the investigation who asked not to be named because the case is ongoing. Bowen said his office has found cases of fraud in the Iraq reconstruction effort that have resulted in 13 arrests, eight cases awaiting trail and 28 cases that the Justice Department is investigating. Of the 13 arrests, five have been convicted and four of those are going to prison.
"We will continue to pursue fraud wherever we find it," Bowen said. "We have found some egregious instances of it. Overall, it is a small component of the U.S. reconstruction effort."
Cockerham, 41, of San Antonio, was arrested Sunday and charged with bribery, money laundering and conspiracy. His wife, Melissa Cockerham, 40, and his sister, Carolyn Blake, a Texas schoolteacher, were also arrested and charged with money laundering and conspiracy, and conspiracy to commit money laundering, respectively. According to court documents, Cockerham joined the Army in 1993 and worked in several jobs as a contracting officer at Camp Arifjan in Kuwait. Starting in 2005, he arranged an elaborate system of taking bribes that involved his family and associates, according to the documents.
In one clandestine case described in court documents, Cockerham took a bribe from Falah al-Ajmi, owner of a contract company called TransOrient for Cockerham agreeing to award a lucrative contract to provide bottled water. Ajmi and Megde "Mike" Ayesh Ismail of Michigan, who was the money conduit, allegedly met Cockerham in a parking lot at Camp Arifjan and showed him a briefcase containing $300,000 in cash. Ismail deposited the money in a Jordanian bank account, the documents said, and gave Cockerham the deposit slip so that he could withdraw the money.
In December 2006, federal agents found handwritten ledgers, some using code names for contractors, in Cockerham's house detailing the amount of money that he, his wife, his sister and others received and the amounts he expected to receive from contractors, according to court papers. Cockerham's wife allegedly told investigators that when she visited her husband in Kuwait in 2004, he called her and said that she would be picked up at her hotel by someone and taken to a bank to make a deposit. The next day, a military contractor to whom Cockerham had given a favorable contract picked up Melissa Cockerham, gave her a bag with $800,000 in U.S. and Kuwaiti currency and drove her to the Commercial Bank of Kuwait, where she put the money in a safe deposit box, investigators said.