Army Reservist Pleads Guilty To Taking Cars, Cash, Sex For Contracts

A former U.S. Army Reserve officer admitted yesterday that he steered millions of dollars in Iraq-reconstruction contracts in trade for jewelry, computers, cigars and sexual favors

Left: Iraq’s reconstruction is expected to cost more than $56 billion

Bruce D. Hopfengardner, 46, pleaded guilty to conspiracy to commit money laundering and wire fraud.

Hopfengardner served as a special adviser to the U.S.-led occupation, recommending funding for projects on law-enforcement facilities in Iraq.

He admitted conspiring with Philip H. Bloom, a U.S. citizen with businesses in Romania, Robert J. Stein Jr., a former Defense Department contract official, and others to create a corrupt bidding process that included the theft of $2 million in reconstruction money.

Hopfengardner is the first military officer to plead guilty in the conspiracy. Bloom and Stein already have pleaded guilty to charges stemming from the scheme…

Hopfengardner’s role was to recommend that the Coalition Provisional Authority fund projects to demolish the Ba’ath Party headquarters, rebuild a police academy and construct various other facilities.

Bloom, who controlled companies in Iraq and Romania, bid on projects using dummy corporations. Stein ensured that one of the firms was awarded the contract, according to court documents.

The businessman allegedly showered Hopfengardner and Stein with cash, cars, premium airline seats, jewelry, alcohol and even sexual favors from women at his Baghdad villa.

“A lieutenant colonel in the U.S. Army today admits to a disturbing abuse of his position, in scheming with others to defraud the government for their own personal and financial gain,” Assistant Attorney General Alice S. Fisher said in a statement.

Court papers said Hopfengardner demanded that Bloom pay for a white 2004 GMC Yukon Denali with a sandstone interior. At Hopfengardner’s request, Bloom also allegedly paid the air fare for Hopfengardner and his wife to travel from San Francisco to Fort Lauderdale, Fla., while he was on leave in January 2004.

E-mails that prosecutors made public in April show that Bloom told his employees to spare no expense in satisfying the officials who controlled contracts in the CPA’s regional office in Hillah, about 50 miles south of Baghdad.

As part of the plea agreement, Hopfengardner surrendered a car, a Harley-Davidson motorcycle, camera equipment, a Breitling watch valued at $5,700 and a computer. He also agreed to forfeit $144,500, prosecutors said.