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Bank Of America Investment A U.S. official working in Iraq accepted $546,000 in illegal payments for steering more than $13 million in contracts last year to an American businessman, the Justice Department alleged in the first criminal corruption case arising from Iraq reconstruction.

Jordan's Foreign Minister again accuses Iran of role in instability in Iraq Jordan's Foreign Minister accused Iran of meddling in Iraq's affairs. Molghi said that Iran is trying to influence the Iraqi election. " Iran religious Shiite regime in Iraq will upset the existing balance in the Middle East and will not be in the interest of the people of Iraq", he said Wednesday.

Investment Opportunity Robert J. Stein Jr., who worked for the U.S.-led Coalition Provisional Authority, and Philip H. Bloom, who ran several companies from a base in Romania, were arrested earlier this week on the basis of criminal complaints citing fraud, money-laundering and conspiracy charges. The allegations were outlined in affidavits unsealed in federal court.

Shaalan, who is a secular Shiite, returned to Baghdad last week despite the court order seeking his detainment. Following his return to Iraq, he announced that the charges against him were the work of Tehran, which was acting through its proxies in Iraq. In January, Shaalan accused Iran of spending "more than $1 billion on meddling in the internal affairs of Iraq". The secular Shiite has repeatedly called Iran "Iraq's number one enemy" and consistently accused the clerical state of funding insurgent attacks against the Iraqi people.

Banc Of America Investment The rebuilding of Iraq has been controversial since the start. More than $20 billion in U.S. funds have been set aside for the work. Some members of Congress have challenged no-bid contracts awarded to companies such as Halliburton Corp., while federal auditors have found that the CPA was lax in overseeing billions of dollars in Iraqi funds from the sale of oil and cash transferred from the United Nations.

"I believe they are trying to exert influence in Iraq, particularly in southern Iraq, and they are using a variety of means to do it", general Casey said. He said that Tehran was providing "financial support" and trying to penetrate "elements of the Iraqi government and security forces". Iran, he said, was not "being helpful to their neighbour Iraq". Over the past few months, a string of top Iraqi and U.S. officials have accused Iran of meddling in Iraq's internal affairs.

Banking Investment "There's more to come" in the way of criminal charges, Ginger Cruz, the deputy special inspector general for Iraq reconstruction, said in an interview yesterday. Stein and Bloom have not been indicted by a grand jury, and Cruz said the investigation is continuing. She said her office is looking into 50 other potential criminal cases on the spending of U.S. and Iraqi funds in the war zone.

He also said that a considerable number of Iranian agents disguised as pilgrims are importing and distributing narcotics throughout Iraq's holy cities and elsewhere. The council chief added that the extent of Iranian operation in Iraq was so great that it was virtually impossible for Iraqi forces to crack down affectively on this 'Mafia business'. He also accused Iran of garnering funds gained from the drug profits and then distributing it to rival Iraqi groups to win their support.

Investment Solution Strategic According to affidavits filed by government investigators, the two men allegedly conspired, starting in late 2003, to rig bids on contracts in the south-central region of Iraq from a CPA office in Al Hillah. Stein was the controller and funding officer at that office, in charge of some $82 million from the Development Fund for Iraq, which is made up of repatriated assets, receipts from the sale of Iraqi oil and transfers from the U.N. oil-for-food program.

"I hope that the European Union will use its relations with Syria and Iran to deliver that message in the clearest terms, " he said during his lunch meeting with the EU leaders at a summit here. Yawar this week accused Iran of orchestrating attacks in southern Iraq and of being "behind the assassination of more than 18 Iraqi intelligence officers". The US and British governments have repeatedly accused Damascus of not doing enough to prevent Iraqi insurgents entering the country via the Syrian border.

Investment Banking Services In the first six months of last year, the affidavits claim, Stein and another, unidentified official, who has admitted receiving illegal payments and is cooperating with authorities, used phony bids to ensure that Bloom's companies got at least $3.5 million for work on nine contracts. The work awarded to Bloom included one contract for demolishing a Baath Party headquarters in Al Hillah and another to renovate a library in Karbala, providing it with new furniture and Internet service.

Bank Investment Stein structured the contracts so that none exceeded $500,000, the limit of his contracting authority, to avoid scrutiny by higher-level CPA officials and auditors, the government alleged. He also made large payments to Bloom on forms designed for expenditures of $15,000 or less, it said.

Alternative Investment In return, the affidavits claim, Bloom made, or arranged for, $546,000 in transfers from overseas accounts to Stein and his wife, or to third parties on Stein's behalf. Federal agents say they have traced the payments to purchases of items such as real estate, cars and jewelry.

Online Investment Services Stein pleaded guilty in 1996 to federal fraud charges and was sentenced to eight months of prison and required to make restitution of $45,000 to a financial institution. A footnote in the affidavit said that a $200 payment from Bloom in January 2004 was routed to a federal court clerk in North Carolina for part of that restitution.

Accompany Essential Investment Bloom's lawyer, Richard A. Mintz, said yesterday that he was still reviewing the charges and had no comment. Stein could not be reached for comment. In a news release yesterday on the case, the Justice Department noted that a criminal complaint is "only a charge and not evidence of guilt."

Investment Company Cruz said that the criminal investigation started eight months ago with a "hotline" tip that led auditors to review DFI contracts and grants from the CPA's south-central office. Auditors checking some of Bloom's contracts found shortcomings with the work, she said, including the use of plastic instead of upholstered furniture and no sign of any Internet connections at the Karbala library.

Investment Management Solution She credited a task force called Spitfire, made up of several law enforcement agencies, including the Bureau of Immigration and Customs Enforcement, the Internal Revenue Service and the Department of State's inspector general office, as well as Justice prosecutors.

Investment Management Services Cruz also said she hoped the charges would send "a strong message" to an Iraqi government that is "trying to build its own anti-corruption" forces.

Guide Investment Stock Rep. Henry A. Waxman (D-Calif.), a longtime critic of the U.S. contracting in Iraq, said in an interview yesterday that the charges illustrated what he called the Bush administration's "non-existent oversight" of the spending of Iraqi funds. He said that while the Republican-controlled Congress has held 13 hearings on the U.N. oil-for-food scandal involving Saddam Hussein, it has held only one hearing on the spending of reconstruction funds, and he urged more.

Investment Manual Solution The issue of U.S. jurisdiction over Iraqi funds has come up before. A federal judge in Alexandria ruled this summer that a civil fraud case against another contractor could continue, but he rejected a Justice Department claim that U.S. fraud law applied to the DFI because the U.S. government was responsible for the Iraqi funds.

Investment Stock The charges don't require that the money involved be from federal coffers, said Charles Tiefer, a government contracting professor at University of Baltimore School of Law, noting the debate in the civil fraud case against a security firm called Custer Battles LLC.

Essential Investment Solution "They've read the Custer Battles case, and they don't want to have a Custer Battles problem," he said. "There has been some complaining abroad or by Iraqis that the United States isn't doing enough to protect the integrity of Iraqi money," Tiefer said. "This is an important statement by the U.S. government's law enforcement authority that they will exercise their power to punish" alleged wrongdoing.

Citicorp Investment Services Staff researcher Richard Drezen contributed to this report.

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