Winning The Hearts & Minds...

by hiring a criminal to 'rebuild' Iraq:

In the first US corruption conviction relating to the occupation of Iraq, a former official pleaded guilty yesterday to stealing more than $2m (£1.13m) of reconstruction funds and taking more than $1m worth of contract kickbacks under a deal with an American businessman.

Robert Stein, 50, a contractor working for the now disbanded Coalition Provisional Authority, had a criminal record for fraud. He acknowledged his role in the scam in a statement to a federal court in Washington.

He admitted guilt on five felony counts, of conspiracy, money-laundering, bribery and the illegal possession of a machine-gun and a handgun.

The businessman, a US citizen identified as Philip Bloom, also faces federal conspiracy and money laundering charges. Mr Bloom was not named in the indictment or in Mr Stein's statement, but is understood to be in custody here ahead of his own likely trial. Five US Army reserve officers are also implicated, two of whom have been arrested.

The case paints an astonishing picture of incompetence and carelessness in the running of the CPA, which administered Iraq between mid-2003 and June 2004. The misdeeds in question mostly took place in the al-Hillah region south of Baghdad, where Mr Stein was in charge of administering $82m of reconstruction funds. Instead - his criminal past undiscovered by whatever background checks were carried out - he became the central figure in an imbroglio of bid-rigging and kickbacks.

Stein used the money to buy Lexus and Porsche cars, a Cessna light aircraft, watches, jewelry, guns and grenade launchers. Hang tight, Iraqis. We realize that we bombed your country to pieces and we promised to rebuild it (we promised 180 medical clinics - sorry, only four are finished). The good news is we just asked for another $120 billion for war funding! That'll push us well past the $400 billion mark. Like I said, hang tight. Even though we were ready to bomb you in January 2003, this nation building thing isn't as easy as we thought it would be.

Baghdad residents inspect houses destroyed in the March 2004 attack on Baghdad's Mount Lebanon hotel. (Reuters)

Injured women and children are taken from the scene of a Karbala blast in March 2004. (AFP)