Fri, Feb 09, 2007 - Page 7 News List

US army reserves, contractor indicted in bid-rigging scam

AP , WASHINGTON

Three Army reserve officers and a US contractor were indicted on Wednesday as part of a bid-rigging scam that steered millions of dollars of Iraq reconstruction projects to a contractor in exchange for cash, luxury cars, jewelry and other pricey goods.

The husband of one of the military officials also was charged with helping to smuggle at least US$10,000 into the US that the couple used to pay for improvements to their house.

The scam was outlined in a 25-count indictment filed on Wednesday in US District Court in the state of New Jersey.

The three US Army Reserve officers were responsible for helping to supervise how the US-managed Coalition Provisional Authority spent an estimated US$26 billion available for reconstruction projects in Iraq. They were in those posts in 2003 and 2004.

The indictment says the three officers -- Colonel Curtis Whiteford, Lieutenant Colonel Debra Harrison and Lieutenant Colonel Michael Wheeler -- directed at least US$8 million to a construction and services company. In return, they allegedly demanded cash, a Nissan sports car, a Cadillac SUV, real estate, a Breitling watch, business-class plane tickets and other items.

The contractor, identified in the indictment as Seymour Morris Jr, allegedly acted as a go-between for the military officers and the construction company by illegally wiring money and securing the goods. Morris is a US citizen who lived in Romania, and owned and operated a Cyprus-based financial services business.

Last week, a former Pentagon contractor was sentenced to nine years in prison for helping steer millions in Iraq rebuilding funds to a company operated by US citizen and businessman Philip Bloom. Bloom already has pleaded guilty to the scam and awaits sentencing.

Wednesday's indictments were announced the day after House Democrats grilled the former US occupation chief in Iraq over how he doled out up to US$12 billion in Iraqi money without accounting for it.

Firing back in a House Committee on Oversight and Government Reform hearing on Tuesday, Paul Bremer insisted that he did the best he could in the middle of a war and repeatedly said he had spent Iraqi -- not US -- money. Bremer ran the country for 14 months.

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