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August 16th, 2007 - Company in Bribe Scandal is Penalized

News article from San Antonio Express-News

Summary of the Green Valley Corruption Case

Company in Bribe Scandal is Penalized

 

By Gary Contreras

San Antonio Express-News

August 16, 2007

 

A Kuwaiti company embroiled in the largest military bribery scandal to come out of the Iraq war has been temporarily barred from doing business with the U.S. government and is under criminal investigation by the Army, according to a report obtained by the San Antonio Express-News, and an Army spokesman.

 

The Army's so-called debarment of Green Valley Co., finalized May 18, is retroactive to Dec. 1, 2006, and effective through Dec. 1, 2009. It followed an administrative inquiry in which the Army accused the company of overbilling the government for more than $1.3 million in wastewater removal services military officials say it never performed.

 

Green Valley was a subcontractor in a $7 million latrine and Dumpster services contract signed off on by Army Maj. John L. Cockerham, 41, the Fort Sam Houston-based contracting officer accused of accepting $15 million in bribes from various contractors for almost two years.

 

According to the report, which was obtained through a federal Freedom of Information Act request, the Army's administrative inquiry found that Green Valley's employees were pretending to empty tankers full of sewage from Camp Arifjan, a U.S. troop base near Kuwait City.

 

Green Valley is also among at least eight companies being investigated by a federal contract fraud and mismanagement task force that includes the Defense and Justice departments, Army, FBI, IRS and an inspector general keeping tabs on the $44.5 billion used to rebuild Iraq. The companies are being probed over allegations that they paid bribes to Cockerham in exchange for lucrative contracts.

 

According to the report, Green Valley had been awarded multiple contracts to provide base operating and transportation support to U.S. government facilities in Kuwait and Iraq.

 

The nearly 200-page report does not mince words about Green Valley's wastewater removal work:

 

"Green Valley engaged in a scheme to defraud the government by artificially inflating the amount of black and gray water removed from Camp Arifjan during the period between on or about 1 December 2005 and on or about 28 February 2006," Robert N. Kittel, an Army suspension and debarment official, wrote in a May 18 memo informing Green Valley general manager Mustafa I. Howayji that his company was blacklisted.

 

"The brazen nature of the misconduct which Green Valley is accused of participating in calls into question whether the company may ever be determined to be responsible to do business with the United States government in the future."

 

According to its Web site, Green Valley offers services in transportation, water tankers, sewage and fuel trucks, refrigeration trailers, forklifts, tents and sleeping bags, construction equipment, stationery, mineral water, latrines, generators and Dumpsters.

 

The company's contract was a blanket purchase agreement for services at Camp Arifjan, including the supply of tents, latrines, Dumpsters, lighting and removal of black and gray water. It had a total ceiling of $7 million over the two years it was to be performed: Oct. 18, 2004 to Oct. 18, 2006. Green Valley was a subcontractor to another Kuwaiti company called Palm Springs, which was not cited for wrongdoing in the report.

 

Repeated phone calls from the Express-News to Green Valley's offices and cell phones in Kuwait listed for Howayji and Assistant General Manager Mohamed I. Howayjij were not answered. E-mail inquiries also received no response.

 

The Army's criminal investigations arm - which is part of the multi-agency fraud and abuse task force - is taking a hard look at Green Valley, but has not filed charges.

 

The Cockerham link

 

The only public reference to Green Valley in the criminal investigation of Cockerham appears in a federal lawsuit the Justice Department filed. The lawsuit sought to keep $172,109 of suspected bribery proceeds found in a Detroit bank account frozen.

 

Those court records link the account to a Detroit-area man named Megde "Mike" Ayesh Ismail, who worked for various contractors in Kuwait, including Green Valley. According to the documents, Ismail approached Cockerham with a scheme to make money while Cockerham was deployed in Kuwait.

 

The records state the following:

 

"Mike described a situation where he would solicit a bribe from his employer, Green Valley, and its principal, Mohammed, in return for the award of a bottled water contract. Cockerham expected to take approximately $800,000 from Green Valley and Mike expected to take money as well. Mike and Mohammed met Cockerham in the parking lot of Camp Arifjan ... with a briefcase containing approximately $300,000. Cockerham understood that Mike would repatriate the money to the United States for him in return for a commission."

 

Cockerham's lawyer, Jimmy Parks Jr., has said his client will plead not guilty.

 

Suspicions piqued

 

According to the debarment report, suspicions about Green Valley arose in November 2005 because the company's truck tankers were returning to Camp Arifjan sooner than usual from runs meant to empty sewage, and periodic bills were high for off-peak latrine use at night, when most troops were asleep.

 

Soldiers then observed Green Valley tankers parked and not collecting or dumping any sewage. At other times, Green Valley truck drivers were seen attaching and detaching hoses from the tankers without actually pumping or disgorging wastewater. Drivers also were observed switching from empty tankers to trucks full of sewage - the loads were supposed to have been emptied off site but were not - so they could be counted again and again, according to the report.

 

After Green Valley stopped doing work at Camp Arifjan, the amount of wastewater claimed declined significantly, Kittel's report noted.

 

The company never responded to the allegations.

 

But in an unsigned April 2006 letter included in the report's evidentiary exhibits, Green Valley said the company had been in existence for eight years. In the letter - a sales pitch for another wastewater removal contract at the Kuwaiti Naval Base, Camp Patriot - Green Valley also bragged about being one of the three largest sanitation and waste management companies in Kuwait and boasted that it had done work for a major military contractor, KBR, and the Army.

 

Cockerham, who was stationed alternately at Camp Arifjan and Camp Doha between 2004 and 2005, signed off on the latrine and Dumpster contract, initially with Green Valley, the debarment paperwork shows. He, his wife, Melissa, 40, and his sister Carolyn Blake, 44, of Sunnyvale, are charged in what Bowen has said is the biggest bribery probe to date in the reconstruction of Iraq.

 

In court documents, federal authorities allege that Cockerham planned to take at least $15 million in bribes for steering lucrative military contracts to unspecified companies in Kuwait and Iraq.

 

They also allege he had already received $9.6 million - some of it picked up by his wife and Blake and placed in safety deposit boxes in Kuwait and Dubai so it could be moved to offshore bank accounts in the Caribbean.

 

Cockerham and his wife remain jailed in San Antonio, while Blake, who pleaded not guilty, is free on bail. All are pending possible indictment.

 

Database Editor Kelly Guckian contributed to this report.

 

External link: http://www.mysanantonio.com/news/MYSA081707_01A_Green_Valley_34b58fb_html35204.html

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