Largest Bribery Case in Iraq Reconstruction Disclosed - $9-million

The article below is pretty specific, so read it.

When I was in Iraq, a number of the contracts were missing any paragraph specifying that any requests for bribes were to be disclosed to a hotline, so I am guessing that the bribe payers didn't have to sign the normal contract wording I saw later that contained a clause prohibiting bribes, and what to do about it.

The article isn't clear where the bribe taking Major worked from, but I am guessing he was in the military procurement center in Kuwait (since some of the bribe receipts were stored there), which has been the focus of many investigations. I believe the Kuwait procurement office focused on Iraq military contracts (not reconstruction which was done through a center in Baghdad's Green Zone.)

We have previously written about all the missing controls in the Baghdad reconstruction procurement process, and Kuwait seems to have had the same problem.
vj

Favorite Quote:

The case kicked off a widespread investigation into how the Pentagon procures goods and services in the Iraq war. An Army oversight commission found there were poor checks and balances in place and a need to hire more skilled contracting officers.

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From THIS Washington Post page

2 Plead Guilty to Army Bribery Scheme

By Dana Hedgpeth
Washington Post Staff Writer
Wednesday, June 25, 2008; A09

An Army contracting officer has pleaded guilty to involvement in a $9 million procurement scandal in which his wife was accused of carrying shopping bags full of cash to banks in the Middle East. Investigators say it is the largest bribery case out of the war in Iraq.

Maj. John Cockerham, 43, of San Antonio, pleaded guilty to bribery, conspiracy and money laundering. Cockerham's wife, Melissa Cockerham, 41, also pleaded guilty to money laundering. His sister Carolyn Blake, 45, of Sunnyvale, Tex., who was also allegedly involved in the scheme, is scheduled for trial in October on charges of money-laundering and conspiracy.

The Cockerham case reads in part like a spy novel, with $300,000 in cash delivered in a Kuwait parking lot. Handwritten ledgers, using such code names as "Mr. & Mrs. Pastry," recorded who had paid money. The case kicked off a widespread investigation into how the Pentagon procures goods and services in the Iraq war. An Army oversight commission found there were poor checks and balances in place and a need to hire more skilled contracting officers.

John Cockerham told prosecutors that starting in 2004, he was involved in a complex bribery and money-laundering scheme while being deployed to Kuwait. In exchange for awarding illegal contracts for such supplies as bottled water, he received more than $9 million in bribes. Investigators have said he expected to get $5.4 million more.

Once he agreed to take the money, Cockerham told the contractors to pay his wife, his sister and others. His wife admitted that she accepted more than $1 million in bribe payments on her husband's behalf. She allegedly carried the cash in shopping bags and deposited the money in safe-deposit boxes at banks in Dubai and Kuwait.

The couple lived modestly in a house on an Army base in San Antonio and were described as being involved with their three children and their church.

John Cockerham faces up to 40 years in prison; his wife could face as much as 20 years, plus fines.

Cockerham and his wife made the plea agreements in January, but the deals were kept under seal until yesterday because the couple is cooperating with investigators, who are continuing to investigate others who might be involved in the scheme.

The Army has said it is pursuing more than 90 criminal probes involving contract fraud and abuse in Iraq, Afghanistan and Kuwait.