Iraq corruption - Justice Dept. stalls re Custer Battles and the rest

Washingtonpost.com:The Justice Department yesterday asked a federal judge for more time to consider taking a legal position that could have far-reaching implications for the handling of alleged contractor misdeeds in Iraq under the Coalition Provisional Authority.

U.S. District Judge T.S. Ellis III had sought guidance on a deceptively complex question: Was the CPA -- which governed Iraq for a year after the fall of Saddam Hussein -- an arm of the United States, or was it part of a broader international body?

The government's response could determine the fate of a lawsuit that whistle-blowers have filed against Custer Battles LLC, a Fairfax-based contractor that is accused of defrauding the CPA of tens of millions of dollars during work in Iraq that included securing Baghdad International Airport. Because the case is the first to be unsealed involving charges of fraud in the multibillion-dollar Iraqi reconstruction effort, it could set precedents.

The government's handling of the case is of great interest to legal scholars, who say the CPA's definition has long been in doubt. "The government used the amorphous status of the CPA to its advantage," said Steven L. Schooner, a professor of government contracting law at George Washington University. "The government clearly played the CPA so that sometimes it was the government and sometimes it wasn't."

Schooner said the Justice Department is in a difficult position because identifying the CPA as a U.S. entity could make the government legally responsible for the CPA's actions. On the other hand, he said, "it's not a very attractive position to say, 'If you stole U.S. money, you're liable. But if you stole Iraqi money, the U.S. government just doesn't care.' "
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