U.S. Businessman Allegedly Bribed Officials in Iraq

Nov. 16, 2005 — -- An American businessman has been charged with bribing officials with the Coalition Provisional Authority in Iraq in exchange for reconstruction contracts, ABC News has learned.

Philip Bloom is accused of providing hundreds of thousands of dollars in bribes and kickbacks to the comptroller for the South Central Region of Iraq in Al Hillah, Iraq. The comptroller's job was to make certain the bidding process was fair and aboveboard.

According to the newly unsealed affidavit, "The investigation has revealed that contracts were awarded to businesses controlled by Bloom through a rigged bidding process, that the work was ordered by certain of Bloom's co-conspirators, and that such contracts were authorized for payment by Bloom co-conspirators (in some cases without any performance of the contracts by Bloom's companies)."

Bloom, a U.S. citizen who has lived in Romania for many years, was arrested recently at Newark International Airport in New Jersey. He made a brief appearance Wednesday in U.S. District Court in Washington and remains in federal custody.

Bloom operated and controlled several construction and service companies in Iraq and Romania, which were awarded contracts from the Coalition Provisional Authority -- South Central Region in Al-Hillah, Iraq, according to the affidavit. Those corporations include Global Business Group, GBG Holdings and GBG Logistics Division.

The investigation also concluded that Bloom, through his businesses and personal bank accounts, paid kickbacks and bribes and provided gratuities to government officials, including to his co-conspirators.

Sources say the charges may indicate there was widespread corruption in the early stages of bidding reconstruction projects in Iraq. The comptroller is described by sources as an American.

The charges are part of an ongoing investigation into fraud known as Operation Spitfire. It is being conducted by the Internal Revenue Service, U.S. Immigration and Customs Enforcement and the Special Inspector General Iraqi Reconstruction.

ABC News' Pierre Thomas reported this story.