Washington – An American businessman living overseas paid at least $630,000 in kickbacks to U.S. occupation authority officials to win reconstruction contracts in Iraq, according to a federal affidavit made public Wednesday.
Philip Bloom, a U.S. citizen who has lived in Romania for many years, was arrested recently at Newark International Airport in New Jersey. He appeared briefly Wednesday in U.S. District Court in Washington and remains in federal custody.
Prosecutors at the court hearing did not detail the charges against Bloom, but U.S. Magistrate Judge Deborah Robinson said they involve money laundering and conspiracy to defraud the government.
The charges remain sealed.
“We’re in the process of reviewing the allegations,” said Robert Mintz, Bloom’s lawyer.
The U.S. is spending tens of billions of dollars to rebuild Iraq. An award of more than $10 billion to Halliburton Co. and its subsidiaries in 2003 and 2004, some of it in no-bid contracts, has drawn criticism from lawmakers and others.
Justice Department officials said they are unaware of previous indictments arising from contracting fraud in Iraq, but the charges against Bloom stem from a series of audits by Stuart Bowen, the U.S. special inspector general for Iraq reconstruction, that found indications of potential fraud.
A government affidavit alleges that Bloom conspired with officials of the Coalition Provisional Authority and U.S. military to rig bids for contracts in Al-Hil lah and Karbala, two cities 50 to 60 miles south of Baghdad. In some cases, Bloom’s companies performed no work, Patrick McKenna Jr., an IG investigator, said in the affidavit.
