Deal Reveals Murky World of Contracting ("Dusty" Foggo)

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http://www.theledger.com/apps/pbcs.dll/article?AID=/20070207/NEWS/702070367/1001/BUSINESS

Deal Reveals Murky World of Contracting

By KATHERINE SHRADER & ALLISON HOFFMAN
The Associated Press

WASHINGTON
CIA officers operating in northern Iraq bought drinking water from a bottling plant there for years prior to the 2003 invasion that ousted Saddam Hussein. That changed soon afterward. A CIA officer handling logistics for the Middle East and other regions recommended that an American company provide water and other supplies, according to former government officials.

The U.S. contractor that benefited from the multimillion-dollar deal wasn't just anyone. The company had personal ties to the officer, Kyle "Dusty" Foggo, who would soon leave his logistics post in Frankfurt, Germany, and move to Washington to become the CIA's third-ranking official.

In at least one written communication, a Baghdad CIA officer complained about the no-bid contract. According to one official, the officer thought the deal was simply unnecessary because safe water was available commercially, but he was ignored.

The water contract, while small on the scale of the billions that flowed into Iraq, raises questions about why U.S. taxpayer dollars went to well-connected businessmen rather than Iraqis who could have benefited from a share of postwar reconstruction business. And the case provides a window into the murky world of covert government business arrangements.

Foggo retired from the CIA last year. He is now at the center of a federal investigation, nearing completion, into whether he improperly steered contracts to companies controlled by his best friend, San Diego defense contractor Brent Wilkes.

Federal prosecutors in San Diego are preparing to seek indictments against Foggo and Wilkes on charges of honest services fraud and conspiracy, two government officials familiar with the investigation told The Associated Press last week.

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