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October 1st, 2007 - Company with Ties to Major Cries Foul

News article from San Antonio Express-News

Summary of the Green Valley Corruption Case

Company with Ties to Major Cries Foul

 

By Gary Contreras

San Antonio Express-News

October 1, 2007

 

Inside an office at Camp Arifjan in Kuwait, where military contracts worth billions of dollars were doled out to private businesses, conditions were ripe for ripoffs.

 

Contracts could be inflated and steered to companies willing to pay bribes. Oversight was insufficient. Military officials had little contract experience or ethics training.

 

One congressman, after hearing testimony from Pentagon officials, recently described it as "a culture of corruption."

 

In the thick of it was Army Maj. John Cockerham of San Antonio, federal prosecutors say. He, his wife and his sister have been indicted on charges of conspiracy to commit bribery, obstruct justice and launder money. Cockerham, who is in jail awaiting trial, also faces charges of bribery, in the millions allegedly.

 

One company that was doing business with the Kuwait office, and with Cockerham specifically, contends it is a victim of both the rigged system and now a misdirected military investigation.

 

It claims two of its contracts, legitimately obtained, were taken away and given to companies willing to pay bribes and accused of fraud.

 

What Gulf Group Enterprises Co. says happened to its contracts might be indicative of the corrupt system to supply troops in Iraq, Kuwait and Afghanistan.

 

The government is investigating Gulf Group for possible bribery. Gulf Group denies any wrongdoing and has filed four lawsuits against the government.

 

The Justice Department recently asked a judge to delay any action on Gulf's lawsuits out of concern that they might disclose important details about the wider investigation.

 

As of a few weeks ago, 78 criminal investigations were probing contract fraud in the military, and at least 29 people have been charged, including Cockerham, his wife and sister.

 

At least two contracting officers appear to have committed suicide after being questioned by investigators and admitting they had taken kickbacks.

 

Army Maj. Gloria D. Davis, a contracting officer at Camp Arifjan, committed suicide in December 2006, a day after telling investigators that Cockerham and other officers had taken bribes.

 

Davis admitted taking $225,000 in kickbacks from an American-owned company in Kuwait, court records and other documents obtained by the Express-News show.

 

A week after her death, investigators in San Antonio searched Cockerham's home at Fort Sam Houston, uncovering ledgers they say documented up to $15 million in bribes from at least eight contractors he dealt with in Kuwait.

 

Camp Arifjan also was stunned by the death in September 2006 of Lt. Col. Marshall A. Gutierrez.

 

Gutierrez, head of logistics for the Army's Area Support Group, was recorded by Army agents on Aug. 17, 2006, taking a $3,400 bribe from a cooperating witness in exchange for disclosing confidential bid information from other contractors.

 

During a search of his vehicle and quarters, agents found $27,000 in suspected bribes.

 

Arrested and jailed for a court martial, he apparently tried to kill himself twice. Later, he was ordered released, and was found dead on Sept. 4, 2006, in his living quarters. Found at the scene was an empty prescription bottle for sleeping pills and a water bottle with a green liquid believed to be antifreeze, according to military reports obtained by the Express-News under the Freedom of Information Act.

 

No evidence

 

The Justice Department has yet to provide any solid evidence that Gulf Group paid bribes. Instead, it claims that because Gulf Group had a bottled water contract handled by Cockerham, the company now merits investigation.

 

Attorneys for Gulf Group oppose any more postponements in its lawsuits. Iliaura Hands, a lawyer for Gulf Group, characterized the Justice Department's motion as "the government's bogus attempt to delay the prompt payment of its obligation" - almost $1.1 million from one contract alone.

 

"Gulf Group has been a victim of a circle of corrupt government personnel," she said.

 

Gulf Group contends that Cockerham, who was stationed in Kuwait for almost two years, wrongly terminated two contracts the company had for supplying U.S. forces in Kuwait and Iraq with latrines and trash bins.

 

The San Antonio Express-News confirmed the terminated contracts were awarded to two Kuwaiti companies that were temporarily suspended from doing business with the government because of allegations of fraud or bribery - Jasmine International Trading and Contracting Co. and Green Valley Co.

 

Shortly after Green Valley got the trash bin contract, it was expanded to add wastewater removal and other work at Camp Arifjan. The contract later ran into problems - Green Valley's employees began pretending to empty tankers full of sewage from Camp Arifjan.

 

The trickery resulted in inflated bills to the Army, to the tune of $1.3 million, according to records obtained through a federal Freedom of Information Act request.

 

That episode resulted in Green Valley getting debarred until Dec.1, 2009. The company didn't respond to the Express-News' inquiries. It also never responded to the Army's allegations in the civil administrative proceedings that led to its debarment.

 

Jasmine denied any wrongdoing.

 

Exhibits in the lawsuits say two of Gulf Group's contracts were terminated in October 2004 by Cockerham at the orders of Army Col. Brick T. Miller. Miller headed the Army Area Support Group at Camp Arifjan, Kuwait, from July 2004 to July 2006. Cockerham was stationed at Camp Arifjan for much of that time.

 

The reasons for ending Gulf Group's contracts were similar, contract paperwork shows. One of the papers cited this: "Contract is canceled by order of the ASG Commander Kuwait COL Brick Miller. Contract was canceled in accordance with FAR Part 52.212-4 Termination for Convenience of the Government."

 

Sources involved in government contracting say termination of a contract for "convenience" - for no apparent good cause - is allowed, but is rare and comes across as "eye catching" and "suspicious."

 

In a brief phone interview recently, Miller bristled that a reporter with the Express-News had contacted him to ask questions, but dismissed any mention of his name in the investigation as "some major talking (expletive)."

 

"I don't have time to waste on some major who throws out spurious comments," Miller said. "The truth will come out. I'm not worried about some major who wants to talk (expletive)."

 

"Anybody who knows me, knows I'm the one who started all this," Miller said, referring to the investigation.

 

Miller referred further questions to spokesmen for the military.

 

The Army refused to comment, citing its ongoing investigation.

 

"As a matter of policy, we do not confirm nor deny subjects of investigations to protect the integrity of the investigation and to also protect the individual's Constitutional due process and Privacy Act rights," Col. Christopher Grey, a spokesman for the Army's Criminal Investigation Command, said in an e-mail.

 

Once Gulf Group's contracts were terminated, the latrine contract went to Jasmine. The company was debarred for one year in 2006 over allegations that its CEO, Diaa Ahmed Salem, bribed Army officers to speed up payments to his company, according to documents.

 

Salem also is named as a principal in D&G American Trading Services Inc., a company Cockerham formed in Texas in April 2004, three months before he was deployed to Kuwait.

 

In a sworn affidavit April 8, 2006, Salem said he worked very hard to build his company's good name and would not jeopardize that in any way.

 

"I have never had to pay cash to someone or to some entity to obtain a contract for Jasmine," Salem's affidavit said. "I would have no need to bribe someone to get approved for a contract as Jasmine has an outstanding reputation."

 

Gerard Casale, an attorney representing Jasmine and Salem, also said his client didn't commit any wrongdoing and knew of no business ties between Salem and Cockerham. He speculated that Cockerham may have used Salem's name to form the Texas company without his knowledge.

 

External link: http://www.mysanantonio.com/news/MYSA093007_01A_cockerham_34961f9_html4612.html

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