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October 22, 2009

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Government worker arrested in scandal over Iraq kickbacks

UNITED States federal authorities have arrested a State Department employee suspected of taking tens of thousands of US 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 on Monday, he "continued his scheme to obtain bribes in return for the award of US government contracts to Iraqi contractors."

Razo was arrested last Friday and released on personal recognizance.

A woman who answered a Fayetteville, North Carolina, phone number that Razo listed in a court document said he was traveling and could not 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 continuing.

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 to 2006, Razo worked as a security and logistics manager in Iraq for Innovative Technical Solutions Inc, a government contractor headquartered in Walnut Creek, California. 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 US$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.


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