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Wednesday, September 8, 2010     FOR YOUR EYES ONLY

Saudi firm won't turn over records to Pentagon in bribery probe

WASHINGTON — A Saudi subcontractor has refused to cooperate with a U.S. investigation of bribery in Iraq.

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The Al Tamimi Group, a Saudi subcontractor in Iraq, has rejected demands by the Defense Department to inspect the company's records. The Pentagon's Defense Contract Audit Agency has sought to trace the relay of hundreds of thousands of dollars in bribes by Al Tamimi to U.S. contractors, including KBR.

"Problems can arise when either the U.S. government or the prime contractor conducts a review or audit based on an inconsistent approach or what we would respectfully suggest is an improper interpretation of the generally accepted government standards," Tamimi general manager Perry Dalby said.


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Officials said the U.S. government investigated Tamimi for four years on charges that executives relayed bribes to win American military subcontracts in Iraq and Kuwait. One Tamimi manager, Mohammad Khan, has pleaded guilty to 14 counts and confessed to paying $133,000 to KBR. In 2009, Khan, sentenced to 51 months in prison, said the money helped win $21.8 million in KBR contracts, Middle East Newsline reported.

The Wartime Contracting Commission has also been investigating Al Tamimi in the alleged kickback scheme. Members of the government panel said Al Tamimi could have won $49 million in contracts from a range of U.S. companies.

So far, Al Tamimi has refused demands by the Pentagon and KBR to examine Saudi company records. The investigation has sought to determine how Khan obtained the bribes for KBR and other U.S. contractors.

Dalby, also ethics director of Al Tamimi, said his company was not required to supply its records. He maintained that Al Tamimi did not benefit from Khan's bribes and could not find the $133,000.

"The company itself did not profit or did not gain any awards as a result," Dalby said.

Officials said Al Tamimi represented the tip of the iceberg in what they asserted was massive corruption and bribery to win subcontracts in Iraq and Kuwait. Al Tamimi, with 30 divisions, operates in Bahrain, Kuwait, Qatar and the United Arab Emirates and maintains partnerships with General Electric and ITT.

"Up to $300 million in subcontracts in Iraq and Kuwait were allegedly tainted by a Saudi-based subcontractor employee's kickback scheme," the Washington-based Center for Public Integrity said.

The center cited testimony from former contractors in Iraq that local companies provided prostitutes to win projects for the U.S. government and military. Subcontractors were said to have played a major role in Iraq and regional countries for such services as translation, logistics and security.

But officials acknowledged that U.S. investigations of Al Tamimi and other subcontract bribery have been hampered by foreign governments. They said Middle East governments often failed to take bribery seriously.

"Without good subcontract control by prime contractors and good oversight by the government, we risk not only wasting money, but also depriving our troops of support they need, overlooking misconduct that alienates local populations, and even handing funds to violent insurgents," Michael Thibault, co-chair of the Wartime Contracting Commission, said.



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