Mar 23, 2007 — My story in Iraqslogger.com significantly advances the story on DynCorp’s tier-one subcontractor, Corporate Bank, a.k.a., The Sandi Group, in a new series Profits of War….

The Washington-based company headed by a Kurdish Immigrant Rubar Sandi was poised to make $8 million on the construction of a police camp at Adnan Palace in Baghdad’s Green Zone by first getting the contract from DynCorp and then flipping it to another firm, Cogim of Italy, to do the work for a lot less money.

But there’s so much more to the story.

As the middleman, Sandi spent several years flipping US-funded reconstruction contracts on almost 30 police camps around Iraq — sometimes with margins as high as 50 percent, according to contracts I write about exclusively in Iraqslogger.com that never have been made public until now.

Here’s the math on the Adnan Palace contracts, the former home of Saddam Hussein’s son-in-law, Adnan….
Contracts intended for the Adnan Palace: (Word files)
DynCorp to Sandi’s Corporate Bank for $55.1 million.
Corporate Bank to Cogim for $47.1 million to do all the work.

See any substantive difference in the contracts?
The Special Inspector General for Iraq Reconstruction said he couldn’t see much difference either. He’s been reviewing the contracts for more than a year. Youtube.com preserves his statement at a Congressional hearing in February for posterity.

The News: According to agreements represented by sources to me as the real ones, The Sandi Group had even larger markups on smaller police camps all over Iraq built under DynCorp’s $800-million police training contract in Iraq.

The nut graph:

According to the draft agreements, when DynCorp hired Sandi’s Corporate Bank in October 2004 to build a regional camp with 24 living trailers at Ad Diwaniyah, Corporate Bank billed $1,194,197. One month later, Corporate Bank then hired the Hozan General Construction Company of Baghdad for $605,000 to do the work. Similarly, DynCorp agreed to pay $833,680 for a 16-trailer camp at Al Kut. Corporate Bank then hired Hozan for $388,000. In Karbala, DynCorp agreed to pay $809,520. Corporate Bank turned to Hozan for $388,000. In effect, one dollar of reconstruction money became $50 cents….

The contracts between DynCorp and Corporate Bank and Corporate Bank and the “sub-sub-contractors” read almost exactly the same. An administrative assistant sitting at a computer could have easily employed a copy-and-paste approach and just replaced a few words where it says “subcontractor’s name here.”

A Sandi spokesman explained that the cash discrepancy was necessary to pay its own security squads to protect the subcontractors it hired; for contingencies if Sandi’s subcontractors fell short of delivering the product and for support staff.

Here’s something simple: A sandbagging effort to harden a police camp in Najaf.
DynCorp agreed to pay $67,397 to Sandi’s Corporate Bank for 24,990 sandbags.
Corporate Bank then hired the subcontractor, Al-Kahirat, at $23,000 to do the work.
The Iraqslogger stories: Marking Up The Reconstruction: Part 1 and Marking Up The Reconstruction: Part 2.

(Don’t know how many millions Sandi collected on Adnan Palace because the US State Department put on the brakes after paying out $43.8 million for the uncompleted camp that included 1,048 living trailers and an Olympic-sized swimming pool. But that’s a whole different can of worms. You’ll have to pay me a 50 percent premium to get into it.)