The War Profiteers - War Crimes, Kidnappings & Torture


July 19th, 2009 - Firm Tied to Iraq Scandal Profited

News article from San Antonio Express-News

Summary of the Green Valley Corruption Case

Firm Tied to Iraq Scandal Profited


By Guillermo Contreras

San Antonio Express-News

July 19, 2009


A Kuwaiti company made millions of dollars from U.S. military contracts despite evidence suggesting that it tried to bribe Fort Sam Houston-based Army Maj. John L. Cockerham with $40,000 for some of the work.


Kamal Mustafa Al-Sultan Co. was also flagged in 2003 for missing fuel that, according to an Army document, was found to have been “stolen” from supplies the business was supposed to deliver to U.S. troops. But military officials imposed a slap on the hand that enabled the company to continue to get more than $24 million in additional work paid for by U.S. taxpayers, a San Antonio Express-News investigation has found.


The newspaper confirmed that Kamal Mustafa Al-Sultan Co., now known as KMS Co. and run by a member of Kuwait's powerful Sultan family, appears on a bribery ledger that military investigators seized from Cockerham in 2007 during what was termed the largest graft investigation to emerge from the war in Iraq.


Cockerham was a contracting officer assigned to the Army contracting office in Kuwait from June 2004 through December 2006.


His ledger lists a total of $15 million in bribes he had lined up from several companies in exchange for contracts, primarily for bottled water. Of that, $40,000 is characterized as “anticipated” kickbacks from KMS, according to court records and testimony.


Before Cockerham's arrival at Camp Arifjan, Kuwait, the Army had discovered the missing fuel, but no one was prosecuted and the company never made it on a list that alerts the federal contracting world about unethical practices, records show.


“This is yet another example of the government not holding contractors responsible, and putting taxpayers at risk,” said Scott Amey, general counsel of the Washington, D.C.-based Project on Government Oversight, or POGO.


The Express-News left several messages seeking comment from KMS. Officials did not respond.


Treated with kid gloves?


On Feb. 1, 2008, Cockerham pleaded guilty to bribery and money laundering charges, admitting that U.S. prosecutors could show at trial that he accepted $9.6 million of the $15 million listed in the ledger. Cockerham remains in a San Antonio jail awaiting sentencing in September.


Cockerham's lawyer, Jimmy Parks Jr., acknowledged in an interview that Justice Department prosecutors and investigators from the Defense Department and Army, as part of their probe, tried to hold Cockerham responsible for the $40,000 attributed to KMS in the ledger.


The Justice Department and investigators declined comment.


“We agreed that if we went to trial (prosecutors) would have sufficient evidence to prove the allegations about the money he'd already gotten,” Parks said. “As for the anticipated receipts, I don't think we ever made an admission ever that we expected to make that money. We may have a fight over that at sentencing time. They may throw that in as a relevant conduct issue, which could increase the potential sentence.”


Cockerham faces a maximum of 40 years in prison, although he is cooperating and is expected to earn leniency. He did not respond to the Express-News inquiries about KMS and other companies accused of trying to buy work from him under the table.


According to previously undisclosed records, questions had already been raised about KMS' practices before Cockerham got to Kuwait. In May 2004, the Army sent a letter to KMS seeking the collection of 150,622 Kuwaiti Dinars - roughly $562,000 - for missing fuel. The quantity of fuel was not specified.


“On 5 December 2003 your company signed a memorandum of understanding with (an Army lieutenant general) regarding stolen fuel from Coalition Forces Land Component Command Reserves,” the letter to KMS states. “In this memorandum you agreed to reimburse the Unites States Army 150,662.890 KD.”


Contracting experts said fuel theft, as the letter states, should have resulted in the matter being forwarded to the Army debarment and suspension official for debarment or suspension, administrative punishments in which contractors are blackballed for certain periods for unethical practices.


In response to the Express-News' inquiries, the Army's Contracting Command said there was no reason to blackball KMS “because it reimbursed the Army,” a spokeswoman said via e-mail.


Sources in Kuwait said the Army was soft on KMS and could not wait to close the books on the matter. The tone of the letter appears to support that argument.


“We appreciate your business and apologize for any inconvenience this may bring you,” states the letter, which is signed by an Army captain. That captain said in an interview that he did not recall the letter or the circumstances surrounding it.


POGO's Amey found it unusual that the command would apologize for acts of a company that did not seem to be above board. He also said further evidence that the company appeared on a bribery ledger should have barred it from getting U.S. work.


Instead, it was still getting preferential treatment last year. In April 2008, the Army limited competition for a tent-package contract to three companies, including KMS, instead of full and open bidding for the work, records show.


“It looks like that's how they got around all this: ‘If they pay for the missing fuel or pay a fine, it'll be OK,'” Amey said. “That's an example of where you wish the government would be a little more heavy-handed in its approach at holding contractors accountable, which would act as a deterrent for all companies that are thinking about taking advantage of the U.S. government.”


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