Amazing

by hilzoy

NYT:

"A North Carolina man who was charged yesterday with accepting kickbacks and bribes as a comptroller and financial officer for the American occupation authority in Iraq was hired despite having served prison time for felony fraud in the 1990's. The job gave the man, Robert J. Stein, control over $82 million in cash earmarked for Iraqi rebuilding projects.

Along with a web of other conspirators who have not yet been named, Mr. Stein and his wife received "bribes, kickbacks and gratuities amounting to at least $200,000 per month" to steer lucrative construction contracts to companies run by another American, Philip H. Bloom, an affidavit outlining the criminal complaint says. Mr. Stein's wife, who was not named, has not been charged with wrongdoing in the case; Mr. Bloom was charged with a range of crimes on Wednesday.

But the list of charges does little justice to the astonishing brazenness of the accusations described in the complaint, including a wire transfer of a $140,000 bribe, arranged by Mr. Bloom, to buy real estate for Mr. Stein in North Carolina. The affidavit also says that $65,762.63 was spent to buy cars for Mr. Stein and his wife (he bought a Chevrolet; she a Toyota), $44,471 for home improvements and $48,073 for jewelry, out of $258,000 sent directly to the Bragg Mutual Federal Credit Union into accounts controlled by the Steins.

Mr. Stein's wife even used $7,151.58 of the money for a "towing service," the complaint says. Much of this money was intended for Iraqi construction projects like building a new police academy in the ancient city of Babylon and rehabilitating the library in Karbala, the southern city that is among the holiest sites for Shiite Muslims.

After Mr. Stein awarded contracts for this work to Mr. Bloom, who eventually received at least $3.5 million himself, according to the complaint, the work often was not performed or was done shoddily, the prosecutors say. (...)

Mr. Stein worked for the Grundy Marine Construction Company, based in Ponte Vedra Beach, Fla., in 2001 and 2002, said the company's vice president, Pete Caruk, in a telephone interview. Mr. Stein was fired when he was found to be falsifying payroll records and making out false invoices for nonexistent purchases of materials for a construction job at an Air Force base, Mr. Caruk said.

The company later found, Mr. Caruk said, that Mr. Stein had also falsified elements of his résumé, like decorations he claimed to have won during his military service but had never received. The company lost about $1.5 million in the overbilling episode, and presented its case to the authorities, Mr. Caruk said, but Mr. Stein has not been prosecuted.

"This guy is a thief," Mr. Caruk said. "He's a con artist and a crook.""

Winning in Iraq requires more than strength of will and firm resolve. Basic competence and honesty would be a good start. And if basic competence and honesty are lacking, trying to make up for it by asking other people to show their strength of will by committing themselves all the more fervently to a cause that even the Bush administration apparently doesn't care enough about to get right, or by demeaning their patriotism and good faith, is just insulting.

Comments

[felixrayman]

You don't have to like the bribery. You don't have to like the way the bribery is performed. You don't have to think the bribery was a good idea. You don't have to think the bribery is going well.

But if you have anything bad to say about the Republican Party, you are embracing defeat. Disloyally, some might add.

[Barry Freed]

I'm sure Rudy Giuliani will vouch for Mr. Stein's good character. Isn't he good friends with Bernie Kerik?

[rilkefan]

Dumb question, but what's the expected rate of fraud in such an undertaking? That is, under a sunshiny democracy, what one might hope for from the US, not Singapore-level purity. 1%? 5%? Surely someone would be expected to try to corner the market in Iraqi cotton...

[John Thullen]

I believe Mr. Stein is a pillar of resolve and exhibits an uncommon will to prevail.

Victory is near. I just hope it's profitable and tax-free, too.

I hope for the sake of the Republic that Stein doesn't get caught up in the Alternative Minimum Tax, because the guy might decide to pull back on the entrepreneurial spirit, being deeply disincentivized.

I join with the children on Medicaid in congratulating Mr. Stein for his pluck. We remove our catheters in his honor.

[Tim]

I don't recall the Vietnam War being run as a profit center for campaign donors. Maybe dr ngo has better info.

[dmbeaster]

So what if the level of graft in the occupation exceeds the Oil For Food scandal by multi-billions. At least the money 's going to the "right" people.

[Tim]

When the money gusher to Republican cronies finally runs dry, they will totally lose interest in it. We'll be out in three months flat.

[cleek]

capitalism is untidy. sometimes money gets lost, or misplaced, or flushed down the ever-gaping gobs of insatiable crony profiteers.

complaining about this is objectively pro-terrorist.

[Gromit]

rilkefan: Dumb question, but what's the expected rate of fraud in such an undertaking?

I don't think that's a dumb question.

Surely someone would be expected to try to corner the market in Iraqi cotton...

Best have plenty of chocolate on hand, just in case.

[Slartibartfast]

But if you have anything bad to say about the Republican Party, you are embracing defeat. Disloyally, some might add.

Odd. The word "Republican" is conspicuously absent from the news article. Maybe the NYT has learned to pussyfoot around such disloyalties. If so, it's a recent lesson. OTOH, this part held some fascination for me:

The affidavit yesterday alleges that on Jan. 22, 2004, Mr. Stein transferred $200 of money obtained through bribes to the clerk of United States District Court in North Carolina's Eastern District.

The payment, the affidavit explains, was an installment on the restitution payment that Mr. Stein had been ordered to pay on his earlier felony conviction.

Sounds like he's going down. The guy who bribed him also needs to take a fall, and the people who selected him for the job and are responsible for overseeing his activities also have some questions to answer.

[hilzoy]

rilkefan: I dunno. I would not have posted this, with the comment I did, had it not been for a couple of things:

(1) the fact that this is not an isolated instance of hiring people with no discernible qualifications, or of corruption.

(2) The fact that he had already been convicted of a felony, and for fraud at that. That means that even a cursory attempt at a background check should have blocked his appointment forever.

That there will be fraud in something of this magnitude is a given. That we will hire people who have already been convicted of fraud to supervise giving out contracts is completely avoidable.

I am waiting for more info on how he was hired.

[Jon H]

I'm guessing he got his job through Joe Allbaugh, or one of the other GOP cronies who set up lobbying shops to help people get rich off the occupation.

[NeoDude]

The will to be greedy is so cool and retro.

[norbizness]

Check it out, I just "willed" their accounting ledgers back into order.

[bob mcmanus]

There is plenty of disagreement about political strategy in the leftosphere, but campaigning on the theme of "corruption and incompetence" rather than lies or intelligence manipulation has a lot of fans.
Less bruising to voter's self-esteem.

"Corruption and incompetence" has the advantage of being obvious, easily understood, applicable to domestic policy and other foreign policy issues and permitting an escape route for liberal hawks.

There is a large segment of Democrats who wish to provide no escape route, that believe 2006 and 2008 must be about Iraq as theoretical idiocy and mural turpitude, and demand full obsequious recantation from war supporters, quaverers, and middlers. I have seen many write that the John Edwards' admitted "mistake" must be accompanied by protest marching to be credible.

[Gary Farber]

"I don't recall the Vietnam War being run as a profit center for campaign donors."

I'd have to think about the involvement of campaign donors, but the overwhelming corruption in Vietnam, of both many (not all) Vietnamese, and many (not all(Americans), was, as part of the lack of establishing a just, competent, and authentically representative, Vietnamese government, a key part of why we failed.

But things were always on the way to being better. In another year or two, or three, according to positive current trends, you know.

[Tim]

Oh, according to my memory, the South Vietnamese government was totally corrupt, you're right about that. I just wasn't sure about the American side, seems like more nowadays.

I suppose that you could make a case that if you're going to tolerate corruption, let the locals get the largest cut. Does you more good that way.

[stickler]

I'm no Vietnam expert (though my students are studying it this semester), but I'll take a stab at this:

I don't recall the Vietnam War being run as a profit center for campaign donors.

Corruption in South Vietnam was an enormous problem and one we never came close to controlling. But as far as American corruption goes, I think the story is a little less clear.

Kellogg, Brown & Root was, if I'm not mistaken, a very well-connected Texas company which was close to LBJ and his buddies. KBR did quite well off that war. But so did most defense contractors, often producing very expensive weapons that were useless or almost so in the jungles.

Depends on how you define "corruption," I guess. Or maybe our fathers' generation was simply less craven and incompetent.

[Tim]

You might have a point about Kellogg, I don't know. But Brown and Root was a separate company in the 70's.

[Gary Farber]

"Does you more good that way."

Not really. If anything, it's worse, because foreigners being corrupt only takes away money (which was coming from the foreigners in the first place); locals being corrupt, however, undermines any chance of local government become respected, stable, or successful. I'd say local corruption was distinctly more destructive to a civil war than foreign corruption, any day of the week.

The only beneficiaries, other than those doing the deals, are the foreign banks.

On the plus side: unlike Afghanistan, not a lot of poppy-growing in Iraq, so far as I know. Nor coca. Just dollars and weapons.

[calmo]

Amazing, yes.
$82M is a lot of money to be supervised by the likes of Mr Stein.
Even distracting.
We missed the real bum Chalabi last week. (Even entertained him for 8 days.)
And some "missing" $9B in Iraq...so far.

[Gary Farber]

"Or maybe our fathers' generation was simply less craven and incompetent."

Yes, and our youth now loves luxuries. They have bad manners, contempt for authority. They show disrespect for elders and they love to chatter instead of exercise. Children are now tyrants, not the servants, of their households. They no longer rise when elders enter the room. They contradict their parents, chatter before company, gobble up their food, and tyrannize their teachers.

These are uniquely fallen times, and we are utterly unlike all previous generations. We're special. Unique. Even in our awfulness, we're better than anyone who has gone before!

Man, I've been laughing at this trope since I was 14. I'm not sure there's been a more consistently ignorant faith so doggedly held in all of human history. Anyone have a nominee?

[Donald Johnson]

Gary, maybe in the past when people said their ancestors were better, they were right. In our case, perhaps we are wrong. If so, this makes us the first generation in history dumb enough to falsely believe we are worse than all who came before us.

[Gary Farber]

"Gary, maybe in the past when people said their ancestors were better, they were right."

I'm afraid I can't manage to see how this could be a true statement, and consistent with the universe as we know it.

[John Thullen]

" .. this makes us the first generation to falsely believe we are worse than all who came before us."

Yes, this is an odd point of view. In fact, I can prove the exact opposite, because my 16-year old is a better person than I.

On the other hand, two of my grandfathers (making the poll results 100% among the sample) started every discussion with "you kids today. Why, when I was a boy, I (insert your own superhuman feat of human beatitude)."

Now one thing that is different is that there was no sex before Elvis appeared on T.V. in the middle 1950's. None. Zilch. But after his hips got rolling for all to see, all hell broke loose.

No Elvis and we wouldn't be having these debates about morning after pills because the only thing that would have happened last night is the lot of you would have finished your homework and gone to bed on time.

[Donald Johnson]

I was joking, Gary. You probably couldn't tell because it wasn't funny. Fortunately, John came along and salvaged something humorous from the wreckage of my attempt.

[has gary gone anonymous?]

You are a loser-defeatist, Donald Johnson, and you must not withdraw! Put more jokes on the ground! All you need is will to be funny!

[Is this funny yet?]

Just imagine: What if George Bush had had the will to withdraw, 6th October 1945?

[dr ngo]

I don't recall the Vietnam War being run as a profit center for campaign donors. Maybe dr ngo has better info.

That's about right. There was some war profiteering - there always is - and much was made by some on the left about some Texas construction companies (with connections to LBJ) and the arms manufacturers, as well as larger generalities about the Imperatives of Capitalism, but nothing much really stuck. The fact is that Vietnam was a poor country, with few resources that anyone cared anything about - a bit offshore oil was discovered _very_ late in the war, long after the US was committed, but otherwise its chief export was rice, which we also export! - and no simplistic Marxist or muckraking analysis of US policy ever gained traction.

It might still be argued that in a global sense US anti-communism was fuelled by the interests of capitalism, keeping potential markets open not just for us but for our allies (specifically Japan), but such an argument, even if true, is a very far cry from the allegations of direct American corruption that accompany the current conflict.

You may remember that 40 years ago (pre-Reagan) greed was not nearly so open in US society. Business profitability was not seen as a justification for so much, but rather something that might itself need to be justified. Maybe Gary is right that every generation praises its ancestors (and bemoans the moral decline of its successors), but I really do believe that the American attitude toward profit-making has altered over the past generation, and not for the better. Certainly the flagrant links between business and politicians would have been better hidden in the 1950s-1970s than they are now. "Hypocrisy is the tribute that vice pays to virtue" (O. Wilde?)

[Anarch]

Man, I've been laughing at this trope since I was 14. I'm not sure there's been a more consistently ignorant faith so doggedly held in all of human history.

Which would be more amusing were it not necessarily the case that, at certain points in time, said faith must be correct -- lest we believe ourselves to be in a reality inconsistent with the universe as we know it -- and we could, relative to certain metrics, be living in such an age.

F'rex, it's quite possible (based on some admittedly ad hoc inflationary calculations I've done) that this is the most corrupt the American government has ever been. It's not as brazenly corrupt as the Gilded Age, mind you -- people at least have the "decency" to get bought behind closed doors and they call it different things -- but if my numbers are right we're looking at more money, both in inflation-adjusted dollars and in percentage of GDP, disappearing illegitimately than ever before. * Teapot Dome, in comparison, is a pissant little operation. Of course, part of this depends on how one defines "corruption": would a tax cut aimed purely at the mega-rich count? no-bid contracts to "connected" companies? and so forth; but there is nonetheless a legitimate argument to be made that we have genuinely entered a new era of corruption, your disdain for this trope notwithstanding.

IOW, while I respect your reflexive dislike of this belief in the unicity of modern events, and tend to agree that there's usually nothing new under the sun, there's actually decent evidence to indicate that this really is new -- new what, exactly, is still pending -- and deserves to be analyzed with more of an open mind.

* I don't have the numbers on me at the moment and I freely admit this is a very ad hoc calculation, so feel free to disagree. Do, however, avail yourself of any of the Internet's fine inflation calculators and the available data on relative GDPs, Teapot Dome, Abramoff &c; I think you'll find the results... surprising. At least, I know I did.

[Gary Farber]

"Maybe Gary is right that every generation praises its ancestors (and bemoans the moral decline of its successors)...."

In case it wasn't obvious, my first paragraph here was written by Socrates.

"F'rex, it's quite possible (based on some admittedly ad hoc inflationary calculations I've done) that this is the most corrupt the American government has ever been."

Oh, sure, could be. Billions here, billions there, it does add up to real money, by any human standard up to now.

[liberal japonicus]

In case it wasn't obvious, my first paragraph here was written by Socrates.

I think Hesiod had Socrates beat by about 400 years.

[Gary Farber]

"Do not let a flaunting woman coax and cozen and deceive you: she is after your barn."

I'll take that advice to heart.

Or did you mean another bit?

[liberal japonicus]

Gary,
I'd start here
Or if you will, I will sum you up another tale well and skilfully -- and do you lay it up in your heart, -- how the gods and mortal men sprang from one source.

but if you are in a hurry, this is the 'nut graf', as they say in Homeric Greek

Thereafter, would that I were not among the men of the fifth generation, but either had died before or been born afterwards. For now truly is a race of iron, and men never rest from labour and sorrow by day, and from perishing by night; and the gods shall lay sore trouble upon them. But, notwithstanding, even these shall have some good mingled with their evils. And Zeus will destroy this race of mortal men also when they come to have grey hair on the temples at their birth (6). The father will not agree with his children, nor the children with their father, nor guest with his host, nor comrade with comrade; nor will brother be dear to brother as aforetime. Men will dishonour their parents as they grow quickly old, and will carp at them, chiding them with bitter words, hard-hearted they, not knowing the fear of the gods. They will not repay their aged parents the cost their nurture, for might shall be their right: and one man will sack another's city. There will be no favour for the man who keeps his oath or for the just or for the good; but rather men will praise the evil-doer and his violent dealing. Strength will be right and reverence will cease to be; and the wicked will hurt the worthy man, speaking false words against him, and will swear an oath upon them. Envy, foul-mouthed, delighting in evil, with scowling face, will go along with wretched men one and all. And then Aidos and Nemesis (7), with their sweet forms wrapped in white robes, will go from the wide-pathed earth and forsake mankind to join the company of the deathless gods: and bitter sorrows will be left for mortal men, and there will be no help against evil.

(actually, they don't say 'nut graf' in Homeric Greek, that was just a little joke in case you took that seriously)

[bob mcmanus]

"will go from the wide-pathed earth and forsake mankind"

Nemesis has left the building.

[rilkefan]

Recently read a Michael Moorcock essay attacking Tolkien, in particular LotR, in part for his things-started-good-and-went-downhill-from-there theme.