The Stoffel Affair: A Conspiracy within a Conspiracy

The specter of corruption has raised its ugly head over government transition in Baghdad. Confidence in the integrity of the US-sponsored administration has become an issue loaded enough to bring two top US administration officials hurrying to the Iraqi capital this week – defense secretary Donald Rumsfeld on Tuesday, April 12 and Robert Zoellik, deputy secretary of state Wednesday, April 13.

It is all the more serious in that suspected corruption in Iraqi ruling circles may have cost American lives. No wonder Rumsfeld shook a stern finger when he cautioned Iraqi politicians to shun corrupt practices.

It so happened that the day before his arrival in Baghdad, Monday, April 13, DEBKA-Net-Weekly‘s counter-terrorism sources discovered the first of a series of communiques published by Iraqi insurgents. They claimed “Iraqi Muhahideen” were responsible for the still unsolved deaths on December 8, 2004, of two Americans, Dale C. Stoffel, 43, whom they describe as “a CIA shadow manager in Iraq, close friend of George Bush,” and his associate Joseph J. Wemple, also 43.

Our sources have pieced the episode together along with its ominous ramifications.

Stoffel and Wemple died when their BMW sport-utility vehicle was rammed head-on as they drove from a meeting with US military officials in Taji. Both men were shot several times and photos of their possessions were posted after a week on a radical Islamist Web site. According to Stoffel’s obituary, two men wearing black hoods killed the two Americans in a hail of gunfire. All accounts show the two Americans were ambushed by killers who knew they were coming.

“The Iraq Resistance” Web site is interpreted by our experts on radical Islam as promising to release hundreds of documents “in the coming days”, evidence of “scandalous wrongdoing.” It was implied that a whole can of worms would be opened against the American-backed administration in Baghdad.

Grievous damage to US intelligence in Iraq

The same communique termed Stoffel “more important than Bremer and his lot of Generals” and accused him of closely monitoring “our moles.” According to DEBKA-Net-Weekly’s intelligence sources, Stoffel was indeed a senior deputy of the CIA station chief in Iraq. If the unknown group that claims to have killed him got hold of his computer, the damage to US intelligence operations in the country must have been grievous.

Stoffel’s partner at CLI Robert Irey was quoted last December by the Monessen Valley Independent as reporting that Stoffel and Wemple were driving from Taji to the Green Zone for a meeting and were ambushed ten minutes from their destination. Irey described Stoffel as “bigger than life” and an “experienced military Special Forces guy” who was always heavily armed and “knew what he was doing.” Something must have lulled them into a false sense of security, he said and pointed at the Iraqi interpreter who had fled the scene and is still missing.

Photo: Stoffel with President Bush in US.

On January 21, Washington Post cited a Pentagon spokesman as saying that the defense department is investigating the killing, with no further comment. But then the WP ran an intriguing box, which said: A Jan. 21 article incorrectly said that the defense department is investigating the killings of two US contractors in Iraq. The department is looking into a congressman’s request to assist the victims’ company in receiving payment for a contract with the Iraqi Ministry of Defense.

The facts known about late Dale Stoffel do not always add up.

Stoffel, executive vice president of CLI USA, a construction and engineering company based in Canonsburg, Pa., spent most of the last year of his life in Iraq. CLI was modifying a building in Taji for use to refurbish armored vehicles for the Iraqi civil-defense force. It also worked on rebuilding the Iraqi ministry of defense in the Green Zone, the fortified government center in Baghdad.

In addition, he listed himself as president of Wye Oak Technology Inc. a company cloaked in international intrigue. Based in a house Stoffel owned in Alexandria, VA., Wye Oak is described on its Website as a developing and engineering company. He is quoted in contrast as calling himself an international weapons dealer.

A contentious item on his past record is the $11.5m contract he landed with Boeing C. for the acquisition of Russian X-31 missiles. The deal fizzled out and Boeing subsidiary McDonnel Douglas sued him last year for the return of $6 m paid him claiming he had delivered five out of the 32 missiles he had promised. The case was closed later and the file sealed. The lawsuit implied that Stoffel was no mere private contractor or arms dealer but had previously worked for the US government in some unknown capacity.

Enter the Lebanese factor

According to colleagues at CLI USA, the Taji meeting with US military officials which preceded the ambush was about financial accountability for a large project they were about to launch to renovate old Soviet tanks, armored personnel carriers and other machinery for Iraqi security forces – the first project of its kind issued by the Iraqi defense ministry.

Photo: Joseph Wemple who died with Stoffel in ambush on Taji road

In early December, he began complaining he was not paid and was concerned about the way Iraqi officials handled finances. According to the Washington Post account, he returned home for Thanksgiving and petitioned Sen. Rick Santorum (R-Pa) and Rep. Tim Murphy (r-Pa) for help. Santorum sent a letter to the Pentagon asking for the matter to be examined. Days before he was killed, Stoffel returned to Iraq.

Later, his colleagues said they were unsure whether the two Americans died as victims of random violence or because Stoffel’s complaints about withheld payment would have laid bare possible corruption in high places in Baghdad.

According to The Los Angeles Times, Stoffel did more than complain about non-payment for work rendered. In a letter dated December 3, he “alerted senior US officials in Washington that he believed Iraqi Defense Ministry officials were part of a kickback scheme involving a multimillion-dollar contract awarded to his company, Wye Oak Technology, to renovate old Iraqi military equipment.”

He went to the Taji military base because he was summoned to a meeting by coalition military officials to discuss his concerns. He then raised payment problems with a mysterious Lebanese businessman designated by the Iraqis a middleman. The conversation at Taji with US officials was the sequel.

The vanished $300 million

The New York Times ran its own take on the motive.

Soon after the twin killings, $300 million in American bills was taken out of Iraq’s Central Bank, put into boxes and quietly loaded on a charter jet bound for Lebanon. “Iraqi officials claimed it was used to buy tanks and other weapons from international arms dealers, as part of an accelerated effort to assemble an armored division for the fledgling Iraqi army. But exactly where the money went and to whom remains a mystery.”

The $300m deal appears to have been arranged outside the American designed financial controls intended to help Iraq – which defaulted on its external debt in the 1990s – to import goods.”

Photo: Stoffel with Iraqi politician Ahmed Chalabi

Anthony Cordesman of the Center for Strategic & International Studies in Washington in an updated report on Iraqi force development referred to the same incident. He noted there was no public bidding for the contracts and the entire Iraqi cabinet did not vote on the deal. Mishal Sarraf, an aide to defense minister Hazem Shalaan asserted the minister and three other senior Iraqi officials, one of whom was interim prime minister Iyad Allawi, had approved the arms deal.

He stated too that the arms dealers could not be named because it would endanger their lives and the transaction was concluded quickly so as to rush the vehicles to Iraqi forces. This explanation was challenged by critics in Baghdad and charges of corruption leveled. One critic, Mowaffak al-Rubaie, the Iraqi national security adviser, said he was unaware of the deal and stated: “I am sorry to say that the corruption here is worse now than in the Saddam Hussein era.”

The director of Iraq Revenue Watch, Isam al-Khafaji, stated: “That’s the tragedy of Iraq: Everyone runs their business like a private fiefdom.”

Cordesman pointed out that no wrongdoing was uncovered and the Iraqi government flatly denied charges of corruption. One leading critic, Ahmed Chalabi, and Shalaan are known to be enemies and the charges may be politically motivated.

Terrorism experts find the circumstances of the murders of Stoffel and Wemple unusual. Stoffel’s computer was stolen from the scene. About a week later, a videotape was posted on a website used by insurgent groups showing personal photographs and identity documents taken from the victims – but no bodies or the killing.

A previously unknown group calling itself the Brigades of the Islamic Jihad claimed took responsibility for murdering the two Americans. Suspicions were raised by Americans and Iraqis that the video was a ruse to disguise an assassination – or a contract killing.

By whose hand and on behalf of whom?

Some suggested Stoffel’s controversial past had come back to hit him.

DEBKA-Net-Weekly‘s most exclusive sources tie the killing firmly to Iraq. Those sources have found out that Stoffel’s complaints referred specifically to the vanished $300 m. We also traced the destination of the transferred cash to the Al Madina bank in Beirut.

Photo: Stoffel in Baghdad.

This discovery has cast the entire conspiracy in a new, explosive direction in view of the history of that bank which we have dredged up.

In January 2003, two months before the Iraq war, the powerful Syrian security chief General Ghazi Kenaan who has since been appointed interior minister, sent the head of Lebanese security services General Jamil Sayyad over to Baghdad on a mission to advise Saddam to transfer the national reserve and his personal fortune to the Al Madina Bank. The Iraqi ruler consented. Since his overthrow, ex-Baath loyalists have been drawing on funds from that bank to sustain the guerrilla war against US forces in Iraq.

The Stoffel affair and the suspected kickback scheme hatched in Baghdad via a Lebanese middleman smack of Saddam’s methods – if not his hand. They touch ultra-sensitive wires in Syria and Lebanon as well as Baghdad through a common hub, the Al Madina Bank. But there are also leads that point to the outgoing interim Iraqi government installed by the Americans in Baghdad.

Stoffel clearly suspected that moneys due to him were siphoned off by a government member in Baghdad. Was it a coincidence that the wayward $300 m was transferred to Al Madina Bank only days after his death?

Did a portion reach Baathist controllers of the guerilla war in Syria and Lebanon – either as a kickback or as a fee for staging the murders of the two Americans?

None of these questions has been answered five months after the event. But what began happening this week was that Iraqi Islamist insurgents, led by Sunnis, moved to capitalize on the still unsolved mystery as a propaganda bonanza with which to hammer the Americans, including the president, and show up the incoming non-Sunni interim regime in Baghdad as made up of politicians on the take.