US authorities arrest State Department employee suspected of taking bribes on Iraq contracts

State Department employee accused of taking bribes

WASHINGTON — Federal authorities have arrested a State Department employee suspected of taking tens of thousands of dollars in bribes and kickbacks on contracts for Iraq reconstruction work.

Court records allege that 52-year-old Richard Lopez Razo began the illicit venture in 2005 when he was working for a company based in California with numerous contracts in Iraq.

In August 2008, Razo began working for the State Department as a provincial program manager overseeing rebuilding projects in southern Iraq. According to the court filings unsealed Monday, he “continued his scheme to obtain bribes in return for the award of U.S. government contracts to Iraqi contractors.”

Razo was arrested Friday and released on personal recognizance.

A woman who answered a Fayetteville, N.C., phone number that Razo listed in a court document said he was traveling and couldn’t be reached.

The case is being handled by the office of the special inspector general for Iraq reconstruction. The office declined to comment on the case because it is ongoing.

But a 16-page affidavit from James Wray, a special agent with the special inspector general’s office, describes repeated instances where Razo used his position to steer contracts to Iraqi construction companies in exchange for payments he eventually deposited in a personal bank account.

From 2005 through 2006, Razo worked as a security and logistics manager in Iraq for Innovative Technical Solutions, Inc., a government contractor headquartered in Walnut Creek, Calif. According to the court records, the company, known as ITSI, was involved in building facilities for the Iraqi army.

The court records state that Razo solicited and received money from Hayder Al Batat, an Iraqi who was the subject of a previous federal investigation into alleged kickbacks on construction contracts. That inquiry led investigators to e-mails between Al Batat and Razo.

They determined that Razo received about $50,000 for helping Al Batat get hired as a subcontractor to ITSI.

“Razo provided H. Al Batat with contract documents, assisted H. Al Batat in preparing his company’s bids and shared competitors’ bid information with H. Al Batat thereby enabling H. Al Batat to underbid competitors,” Wray’s affidavit reads.

Portions of the e-mails are included in Wray’s affidavit and show that Razo had difficulty getting Al Batat to honor the terms of their deal. Even after Razo left ITSI, investigators say he sent Al Batat dozens of e-mails demanding $22,500 for kickbacks that hadn’t been paid.

In a brief statement, a spokeswoman for ITSI said the company will cooperate with the government’s investigation of Razo.

The statement did not directly address a claim in Wray’s affidavit that a current ITSI employee based in the U.S. is Razo’s coconspirator. The employee is referred to in the document only as “Person A.” Person A allegedly has known Razo since 2005 and was involved in the bribery scheme as late as last year.

From January 2007 to July 2008, Razo worked in Iraq for two other American companies. The court records don’t specify any wrongdoing during his time there.

But once with the State Department, Razo appears to have made up for lost time, the court records state. After a brief training period, he arrived in Iraq in September 2008.

Almost immediately, he used his new authority to pressure Al Batat’s brother, Yahya, who also owned a construction and did work in the area Razo had been assigned to, according to the filings. In numerous e-mails, Razo told Yahya Al Batat he wanted the $22,500 his brother allegedly owed him “prior to his award of any future business.”

The court records also allege that Razo targeted seven contracts worth $2.7 million that would go to Yahya Al Batat’s company and another firm. Razo would take a total of $144,000 in fees for the arrangement.

The contracts were awarded in that order. It’s not clear how much Razo received, however. The affidavit states that while home in the U.S. on leave in late 2008, he made three separate cash deposits into his bank account totaling $13,500.

The State Department had no immediate comment on the case.

On the Net:

Special inspector general for Iraq reconstruction: www.sigir.mil/

(This version CORRECTS transposed ITSI acronyms.)