BAGHDAD — Soon after interim Prime Minister Iyad Allawi took office last summer, he announced plans to create a tank division for the new Iraqi army.
The $283-million project was supposed to display the power of Iraq's new government. But under the guidance of a task force overseen by one of America's top generals, it has become another chapter in a rebuilding process marked by accusations of corruption.
The U.S. contractor working on the project repeatedly warned the task force headed by Army Lt. Gen. David H. Petraeus that a Lebanese middleman involved in the deal might be routing kickbacks to Iraqi Defense Ministry officials. But senior U.S. military officials did not act on the contractor's pleas for tighter financial controls, according to documents and interviews.
"If we proceed down the road we are currently on, there will be serious legal issues that will land us all in jail," the contractor, Dale Stoffel, wrote in a Nov. 30 e-mail to a senior assistant to Petraeus.
Eight days later, Stoffel was shot dead in an ambush near Baghdad. The killing is being investigated by the FBI, according to people who have been interviewed by the bureau.
Since then, senior U.S. military officials have continued to work with the middleman, Raymond Zayna, who has taken over part of Stoffel's contract, documents and interviews show.
Although the U.S. military initially insisted that the Iraqi government was in control of the project, e-mails obtained by The Times show that Petraeus' task force supervised it.
The case raises concerns about the U.S. commitment to accountability in projects involving Iraqi money. The inspector general for Iraq's reconstruction recently criticized the failure of the former U.S.-led Coalition Provisional Authority to properly account for $8.8 billion in contracts issued using Iraqi funds.
A $24.7-million payment on the contract that was supposed to go to Stoffel is unaccounted for.
Through a spokesman, Petraeus declined to be interviewed, referring inquiries to the Iraqi Defense Ministry. Ministry officials did not respond to requests for comment.
In January, Capt. Steve Alvarez, a spokesman for Petraeus' task force, said the arms contract was an "MOD [Ministry of Defense] matter."
"There really isn't much more to our involvement," he said.
Later, after being told about the e-mails indicating that task force officers were directing work on the contract, Alvarez said that "performance under this contract was of interest" to U.S. officials.
