Three U.S. military officers are being charged with steering lucrative Iraq reconstruction projects to a U.S. contractor in return for cash, vehicles and other kickbacks. VOA's Michael Bowman reports, federal authorities announced the charges in Washington at a time when Congress is probing overall U.S. spending in Iraq since Saddam Hussein was toppled in 2003.

Paul McNulty (2006 photo)

Deputy Attorney General Paul McNulty says the accused Army reserve officers used funds allocated for the former Coalition Provisional Authority in Iraq as "their own personal ATM [bank] machines" from late 2003 through 2005.

In a news conference, McNulty alleged that the officers conspired to award reconstruction projects worth millions of dollars to a single contractor, who, according to a federal indictment, rewarded his benefactors with lavish gifts.

"More than $1 million [dollars] in cash, a Cadillac Escalade [luxury vehicle], a Lexus [luxury vehicle], a Porche [sports car], a Cessna airplane, real estate, a motorcycle, jewelry, computers, business-class airline tickets, and even future employment," he said.

The contractor in question has already pled guilty to taking part in the scam.

In addition, authorities allege that large sums of cash were smuggled out of Iraq to pay for improvements to the U.S. home of one of the accused. Two American civilians are also named in the indictment.

The deputy attorney general stressed that all the accused are innocent until proven guilty in court. But he added that fraud cannot be tolerated.

"We cannot allow a mission as important as the reconstruction of Iraq to fall victim to fraud, corruption, and theft," he said. "Thousands upon thousands of courageous and patriotic soldiers and civilians of the United States have devoted themselves to the mission of creating a free and democratic society in Iraq."

Paul Bremer

The indictment comes at a time of heightened scrutiny of U.S. spending habits in Iraq. Tuesday, the former administrator of the Coalition Provisional Authority testified before a congressional committee that is probing how billions of dollars were disbursed to support Iraqi government agencies.

Paul Bremer acknowledged that inadequate safeguards were in place to keep track of the funds and ensure they were spent properly. But he insisted that rapid revenue disbursement was essential at a critical time in the mission when Iraq's financial infrastructure lay in ruins and the country's government agencies needed to pay their employees.