Respond to this Article June 2005

The Unquiet American

U.S.-Iraq policy and the murder of a whistle-blowing contractor.

By Aram Roston

The sun sets early in Iraq in December. So, it would have been approaching dusk--calm and eerie--when Dale Stoffel climbed into the passenger seat of his black BMW station wagon at Taji military base outside of Baghdad. He would have held his dull, black Heckler & Koch MP-5 submachine gun tight to his body, the way he always did. The trip back to Baghdad was just 15 miles, but it led through what had become, by December 2004, some of the most dangerous terrain in the world--the Sunni suburbs of Baghdad.

At 43 years old, Stoffel, an American businessman and arms dealer, sported a goatee that gave his grin a mischievous appearance. He probably would have been grinning that day. After all, he believed he had just rescued the biggest business deal of his tumultuous career, one that he thought would not only make him millions but would also help to arm the Iraqi military against the insurgents. It was a deal he believed in with all his heart.

Everyone has heard stories of selfless idealists killed in Iraq. Stoffel was not one of those and probably would not have wanted to be seen that way. He was a self-professed man of action, one who was proudly and openly in Iraq to make a fortune. Still, he supported the war and the promise of a new Middle East and was a solid Republican, an enthusiastic backer of George W. Bush, and a donor to the president's campaigns.

There had been obstacles in Stoffel's way: distractions, false starts, broken promises. There had been encounters with con men, hucksters, and thugs. Stoffel--who'd come to Iraq on the strength of his connections with a circle of Washington lobbyists associated with the invasion's eminence grise, Ahmed Chalabi--had recently accused the Iraqi government and American employees of U.S. military contractors of corruption in a massive deal involving military equipment. But he believed his friends in Washington had sorted it all out and that he was going to be paid the millions of dollars he felt he was owed. An Army colonel who saw him that day said he appeared "pleased."

Two days later, Stoffel's car was discovered in a grim neighborhood along the Tigris. The hood was crumpled like a paper bag, the windshield a haze of cracks. The dashboard was covered with blood. Stoffel had been shot repeatedly in the head and upper back. His friend and employee, Joe Wemple, had been shot once through the head.

A mysterious insurgent group has claimed credit for Stoffel's killing; another terrorist group celebrated the murder and called him an American spy. His friends, though, aren't convinced that this was just another act of violence by militants in Iraq, and neither, apparently, is the FBI, which is now investigating his death. In the chaos of Iraq, it's likely that no one will ever know for sure why Dale Stoffel was murdered.

What does become clear, from dozens of interviews with people who knew Stoffel and from documents that detail his work, is that Dale Stoffel's life--and death--was a version, in miniature, of the American occupation itself. His personality, with its mix of idealism, ideology, and self-interest, mirrored those of the senior administration staff and young officials who manned the American headquarters in Iraq. Stoffel and these administration officials shared a belief that they were clever enough, tough enough, and committed enough to impose their will on a dangerous land through the use of key Iraqi insiders. But, in the end, their Iraqi friends used them.

Legit side of a shady world

I had known Stoffel for four years, and I liked him. We had first met in 2000 over a Scotch and a rockfish dinner at the Landini Brothers restaurant in the Old Town section of Alexandria, Va., a self-consciously quaint shopping district across the Potomac River from D.C. where the elite of the defense contracting world meet after work. Stoffel was smoking Cuban cigars with gusto, practically smacking his lips each time he took a puff. He told good stories--of dinners with defense attachés, of drinking a $1,000 bottle of '61 Lafite Rothschild with a drunken Russian oligarch in Monte Carlo. He was loud and brash and seemed to think himself as a man's man, adventuresome and self-reliant. Stoffel liked to mimic hip-hop lingo; he called me "homeboy." But he also had a subtle intelligence and a chameleon-like ability to shape his personality to his audience and situation.

He must have picked up his swagger somewhere because "he sure wasn't like that in high school," a long-time friend of his told me. Stoffel was raised in suburban Washington, where he became an Eagle Scout, and then in Pittsburgh, where his family moved while he was in high school. Mr. Rogers broadcast his show from the Pittsburgh PBS station where Stoffel's father worked as a technician. His mother was a homemaker.

At 19, Stoffel joined the National Guard, less out of any interest in soldiering, relatives said, than to get money for college. His military records show that he was a heavy weapons specialist with a penchant for complex hardware: His military courses included advanced radar, electronic warfare, and electronic intelligence. Later, shortly after he graduated from Washington & Jefferson College in Pennsylvania with degrees in mathematics and physics, Stoffel was recruited (on the strength of his undergraduate work) to be a civilian analyst in the Office of Naval Intelligence (ONI) in Suitland, Md., studying missile technologies. By his colleagues' accounts, he was very good at his job. In 1987, two years into his tenure at ONI, close associates of Stoffel's remembered, the USS Stark was hit in the Persian Gulf by an Iraqi missile, nearly sinking the ship and killing 37 sailors. Stoffel was a junior member on the team flown to the Middle East to figure out what had happened, but when he studied the missile parts embedded in the wreckage, his associates recalled he discovered that the original Navy assessment, that a lone missile had struck the ship, was wrong. He showed his superiors that parts of two different missiles had stuck into the vessel's metal plates, making it harder for Iraqis to argue that the weapons had been fired accidentally.

Stoffel was also, early on, publicly intolerant of dishonesty, associates of his remember: His first year at ONI, his coworker Jonathan Pollard was arrested for spying on Israel's behalf. Stoffel despised Pollard and told friends and associates for years afterwards that Pollard had been unprincipled, a money-grubber who claimed heartfelt allegiance to Israel only as a way out of trouble.

Civil service money may not have been good enough for Pollard, and, in the long run, it wasn't good enough for Stoffel either. Stoffel left government work in 1989 and joined the staff of a series of defense and intelligence contractors, developing a unique specialty: buying up missiles and other weapons produced in the former Communist bloc countries on contracts for the Pentagon and U.S. intelligence agencies who wanted to analyze them. This work--on the legit side of a shady world--introduced him to a circle of adventuresome arms dealers based in Austria. According to his associates, Stoffel simply loved the swashbuckling, high-living lifestyle. "Dale always thought he was going to be someone big, and important," a close relative said, "but he wasn't one to plan more than a few months in advance. It wasn't as if he planned to be an adventurer; he more or less fell into this line of work. But he loved it; he realized that it suited him." By 1995, Stoffel had become successful enough to start his own company, Miltex, specializing in the same kinds of contracts.

Miltex had a brush with scandal in 1999 when its name appeared in a Human Rights Watch investigation into the arms trade in connection with a missile shipment seized in Bulgaria and presumed to be destined for Africa. Stoffel suggested that other arms dealers might have simply stolen his company's name for use on some documents related to the illegal weapons sale, which happens not infrequently in the shadowy world of arms dealing. Human Rights Watch's report mentioned Stoffel's explanation without assessing it.

In response to the incident, Stoffel dropped that company name and adopted a new corporate name, Wye Oak Technology, using the same small staff (usually fewer than five employees) and doing the same kind of work. But that work itself was getting tougher. Federal court records show that, in March 2001, Boeing's McDonnell Douglas subsidiary contracted to pay Wye Oak $11.5 million to obtain 32 Russian supersonic, sea-skimming missiles primarily for the Navy. Stoffel negotiated with Czech, Russian, Hungarian, and Ukrainian officials, all of whom were happy to earn American cash for their stockpiles, as if he were a shopper choosing between Best Buy, Circuit City, and the Wiz. But he could only deliver fewer than one-sixth the number of missiles he'd promised, and Boeing sued him to recover the $6 million it had advanced to him so that he could procure more missiles. Stoffel claimed that McDonnell Douglas had made his job impossible by agreeing to contracts with several other arms dealers for the same missiles, allowing the Eastern European officials who possessed the weapons to jack up prices beyond what Stoffel could pay; Boeing said it was allowed to do this under the terms of their contract with Wye Oak. The settlement is sealed, but Stoffel's associates maintain that he had already spent the $6 million and did not return it to Boeing.

By then, though, pro-Western governments had taken over much of Eastern Europe, shutting down the weapons bazaar that had flourished throughout the 1990s, and Stoffel was looking to get out of this particular line of work. "The business in this country of buying foreign materiel has kind of dropped off," says one international arms consultant who was a friend of Stoffel's. "[The United States government] can go [directly] to Romania or Poland to get this stuff," and no longer needed middlemen like Stoffel to cut deals for it. In 2002, Stoffel moved back to Pennsylvania with his second wife. He was looking for a new start. And in the wake of the Iraq invasion, he thought he'd found it.

Lawyers, guns, and money

From the beginning, the U.S. occupation of Iraq was dramatically--and consciously--different than any other post-Cold War nation-building effort. In Bosnia and Kosovo, the U.S. military had come in with substantial numbers of troops and then quickly handed authority over most civilian matters to the United Nations, the State Department, and non-governmental organizations (NGOs) such as the Red Cross.

But rather than follow previous experience and use experienced personnel, the Bush administration decided to do things differently. It chose to invade Iraq with a fraction of the troops that many senior military leaders thought necessary. It kept the United Nations, the State Department, and the NGOs on the periphery, both in the planning process and in the administration of the country. In their place, it created the Coalition Provisional Authority (CPA), an ad hoc agency set up in the "Green Zone"--the heavily fortified American sector of Baghdad--and headquartered in Saddam's former palaces. It staffed the CPA with personnel drawn from the ranks of D.C. think tanks, law firms, and political appointees, many with more loyalty to the president than experience in the field.

The CPA's plan, to the extent that it had one, was to remake Iraqi society from the ground up. It would use free-market ideas as a guide, Iraqi exiles as political proxies, oil revenues for funding, and American contractors to carry out the rebuilding. During previous occupations, the U.N. headquarters in New York and the State Department's D.C. offices had served as the clearinghouses for plans and personnel. For Iraq, however, the nerve centers were Donald Rumsfeld's Pentagon and the politically connected law firms and lobbyists on K Street.

Dale Stoffel quickly came to understand all of this, and, in April of 2003, after the United States invaded Iraq, Stoffel retained the lobbying powerhouse BKSH, the firm headed by the influential Republican lobbyist Charles Black, to provide "assistance in defense contract procurement," for Wye Oak.

Stoffel hired the firm to drum up business stateside. With a newborn fourth child, he wasn't looking for work making risky trips overseas. But BKSH had a special interest in Iraq. The firm was a key member of the coterie of talking heads, lobbyists, and politicians pushing for war in Iraq that centered around Ahmed Chalabi's Iraqi National Congress (INC), the anti-Saddam exile group, which was itself a BKSH client. (The lobbying firm provided the exiles with lobbying and media services; its staffers acted as the INC's spokesmen, brokered meetings and deals with Washington insiders, and arranged Chalabi's trips to the United States.)

In January 2004, a leading BKSH lobbyist named Riva Levinson made a pitch to Stoffel. She told him that the lobbying firm could get Stoffel into Iraq using its own connections on the ground, according to someone who attended the meeting; Stoffel, who had worked in the Middle East before but spoke no Arabic, took her up on the idea and was on a plane to Iraq in a matter of weeks.

There was an associate of the INC waiting for Stoffel in Iraq, too--a woman named Margaret "Peg" Bartel, whom he paid to serve as his liaison to the Iraqi business community. (BKSH had a referral arrangement with Bartel, who set him up in Iraq with living quarters, office space, and security.) Bartel was an integral player in Iraqi exile circles; she had helped the INC defend its sometimes questionable bookkeeping in State Department audits and had also assisted in structuring payments the Pentagon made to the INC once war broke out. In Iraq, Bartel introduced Stoffel to the Chalabis, helped him and his associates hunt for business, and set them up in quarters in the Chalabi compound. Chalabi and his INC militia had seized several properties in the posh Baghdad suburb of Monsour--compounds, they said, that had originally belonged to the Chalabi family, but had been stolen by high-ranking Baathists during Saddam's reign. Stoffel and four of his staffers moved into one of those compounds in January and stayed there for several months.

In the gold rush of 1849, they say, it was not the miners who got rich, but the operators who sold the picks and the shovels and the wagons and the denim. So it was in Iraq, with the likes of Peg Bartel, the INC, and BKSH. Stoffel was a miner taking his chances, and they were selling him the picks and shovels.

Vegas on the Tigris

I hadn't even known Dale Stoffel was involved in Iraq until May of last year when I was walking through the lobby of my hotel in Baghdad, where I was on a reporting assignment. At first, I didn't recognize him--I just saw the MP-5 submachine gun slung low on his back, and I frowned. That's when he turned around, spread his arms wide, and greeted me warmly.

With the exception of the submachine gun and a pistol tucked into his belt, he looked the same in Baghdad as he had in Washington. He had a small paunch on an otherwise lanky frame, and he stood jauntily with his shoulders back and his feet apart as if he owned this part of the world. "I love this shit," he would say. "This is what I was born for."

As a friend of his later told me, "When Stoffel first got to Iraq, it was the reaction most people have the first time they go to Vegas."

But in May 2004, Iraq was looking a lot less like Vegas than it had a year before. The country, especially the Sunni sector, was a violent mess. Rumsfeld's decision to invade Iraq with a relatively small ground force had proven to be a mistake, second only to the decision, ordered by the White House and imposed by CPA administrator Paul Bremer 12 months earlier, to disband the Iraqi security services. Many laid-off Iraqi soldiers, who retained their weapons but were no longer getting paychecks, joined a growing insurgency which, by the spring of 2004, was responsible for dozens of explosions and car bombs leveled at American troops and Iraqi civilians. The chaos caused the Shiites and the international community to increase their clamor for a quick handover of control to an interim Iraqi government, and the impending U.S. presidential election gave the White House a political motive to do so as well. The administration began actively looking for a way to get the tar baby that Iraq had become off its hands.

Meanwhile, the situation in Iraq continued to deteriorate. There was no effective government providing municipal services, so garbage piled high on nearly every Baghdad street, its stench filling the air. Sewage flooded the streets--children walked in it, cars drove through it. Electricity might flicker on for three hours at a stretch, but rarely longer. And if there was any reconstruction going on in the capital's neighborhoods, I couldn't find it.

Stoffel invited me to his suite on the fifth floor of our hotel in Baghdad. It reminded me of a dorm room, but with guns. Laptop computers and paperwork littered the coffee table and the shaky, white plastic dining table. There was a bottle of Johnny Walker Red and some six packs of Bud in the fridge. Joe Wemple, who worked for Stoffel, was there too, a sinewy man with white hair, a small goatee, and a sunburnt skepticism. His walk was a wiry prowl, and he looked like a miner in the old West, wearing a hiker's hat with the brim turned up.

They showed me their little self-defense arsenal. In addition to Stoffel's sleek MP-5, they had a nifty Italian Beretta submachine gun that fired 9-millimeter rounds. They had a couple of pistols, an AK-47 carbine with a special pistol grip, and boxes of brown Syrian-made 9-millimeter bullets. But those dull, black guns and all that ammunition would turn out to be useless against the enemies that he would eventually encounter in Iraq.

One night, I met Stoffel outside our hotel. He was talking on his cell phone with his wife back in Pennsylvania. He told her that a reporter friend of his was at the same hotel, and it was a safe place, and then he put me on the line. I could feel his eyes on me the whole time as I told her it was safe. Somehow, I even believed it when I said it. Back then, everyone was telling America--in emails, in phone calls, in press conferences--that Iraq was safe, not as bad as it seemed.

Later that evening, we sat together under the green, polluted Baghdad sky, having some beers and listening for the mortars. Stoffel had brought a snappy cigar case he'd bought at Georgetown Tobacco: Each metal cylinder had its own cap, like a row of torpedo tubes. He leaned back in the spindly plastic chair and held his Cuban cigar as if this was the most contentment one man could hope to achieve in this life.

His contentment was curious, considering what he'd been through in the four months since he'd arrived in Iraq. He'd moved to the hotel after things had become chaotic in Monsour. Associates say he'd had a business dispute there with Faisal Chalabi, a nephew of Ahmed's. As Stoffel told it, the security guards supplied by Peg Bartel and the Chalabi group had suddenly turned against him. He and his colleagues had gathered their gear and readied themselves to leave. And then the guns had come out, he said--a kind of Mexican standoff in Baghdad.

Stoffel loved telling the story. "I stood there, right like this," he recalled, pretending to hold a rifle to his chest and with his feet planted apart, "and I didn't draw down at them, I just stood there. And they said 'No, Mr. Dale, you can't go, you can't go!' And I said, 'Boys, we're leaving. That's the end of it.' And they could tell I was this close. This close!"

As Stoffel's relationship with the Chalabis was unraveling, so too was the American government's. Originally a favorite of administration neoconservatives who had hoped he would lead a pro-American Iraqi government, the exile leader had become an immense embarrassment to the White House. The investigations into pre-war U.S. intelligence failures revealed that some of the most erroneous information about Saddam's weapons of mass destruction programs had come from sources provided by Chalabi. Iraqi police were investigating Chalabi's organization for massive corruption, and U.S. officials suspected that one of his aides had passed word to the Iranian government that the United States had broken that country's intelligence code, a potentially devastating leak. But more than anything, Chalabi was standing in the way of the White House's effort to work with the United Nations to hand control of the country to an interimIraqi government. In late April, the National Security Council's Robert Blackwill was commissioned to draft a memo titled "Marginalizing Chalabi," which listed suggestions on how to sideline the INC leader.

In May 2004, Iraqi police raided Chalabi's compound looking for evidence of organized crime. I showed up with a camera crew and spotted Peg Bartel. She was on the street, holding a cell phone to her head and giving orders in English to flustered Iraqi aides. A stout American woman without a shawl barking into the phone on a Baghdad street was a bizarre sight.

At a press conference I covered later that day, Chalabi accused the Iraqi police of framing him. When the event was over, my cell phone rang: It was Stoffel, who'd been watching it all live on cable TV. "You just hemmed and hawed," he badgered me. "You should have asked tougher questions."

Cash stuffed in pizza boxes

It was after the falling out with Chalabi's followers that Stoffel decided to become a federal informant, blowing the whistle on corruption by American officials in Iraq.

Stoffel--for all his activity and charm, and despite the open-season nature of Iraq--was having a hard time breaking through to the big money. He was scrambling for contracts, trying to sell railroad equipment, building supplies, buses, even Ukrainian tomato paste. (The buyers had issued a contract for tomato paste made in a Muslim country; Stoffel's plan was to buy the food in blank cans from the Ukraine, one of his partners told me, where it could be had much cheaper, and stick on labels saying it came from the United Arab Emirates, undercutting less shrewd contractors. He didn't get the contract, or the chance to try.) But aside from a small subcontract to help repair the building that had housed Saddam's Ministry of Defense, which paid his (and his staff's) way but won only slim profits, Stoffel hadn't cut any deals.

The main reason was that little could get built in the violent chaos. Of the $18.4 billion Congress had set aside for reconstruction, only 3 percent had been spent by August 2004. As a result of security concerns, contractors could barely get out the door, and had to watch as large chunks of the country sank into ruin.

But another reason Stoffel felt he wasn't breaking through was that he refused to pay kickbacks. From the start, the Iraq reconstruction effort had been haunted by talk of corruption. It was a cash economy, and existed in a legal black hole with little accountability. Contracts were issued quickly, and written sketchily, by the CPA; frequently, businessmen dealing with the agency said, they'd be posted on a CPA Web site with bids due the very next day--an impossible deadline to meet for any contractor who didn't have advance warning. It was a climate ripe for corruption.

Stoffel was naming names, his associates say, and telling startling stories--cash stuffed inside pizza boxes, kickbacks to purchasers inside the Green Zone. He told these stories to a new office set up specifically to ferret out financial wrongdoing in Iraq, the Special Inspector General for the Reconstruction of Iraq. (Spokesmen for that office have refused to talk about the case, citing ongoing investigations.)

Last summer, Stoffel finally seemed to hit pure reconstruction gold, or, more specifically, scrap iron--military scrap iron. Stoffel and his colleagues saw opportunity in the relics of Saddam's army, the thousands of tanks and armored vehicles stowed away in desert depots and that now belonged to the reconstituted Iraqi Ministry of Defense. They could be worth hundreds of millions on the international scrap metal market. (One of Stoffel's associates estimated the value of the scrap to be at least $1.5 billion.) In a collapsing country, he figured, he could at least sell the junk.

Virtually all official relationships had broken down in the country, so business depended upon personal contacts. Stoffel's schmoozing among prominent Baghdad families, and particularly his aborted stay near the Chalabi compound when he had first come to Iraq, was beginning to prove valuable. There he had shared a house with a man named Mohammed Al-Chalabi, a cousin of Ahmed Chalabi, who introduced Stoffel to another cousin of his, named Ghazi Allawi. Ghazi Allawi introduced Stoffel to a man named Mashal Sarraf, a well-heeled civil servant who worked for Allawi's brother, Ali Allawi, who was then the Minister of Defense in the new Iraqi government, according to a statement given by Sarraf to The Washington Monthly. Sarraf, an operative who was described to me by one American as "the best dressed man at the Ministry of Defense," realized that Stoffel was a man he could work with. The Ministry gave Stoffel a letter affirming that his company would be the "sole and exclusive" agent for the disposal of the vehicles in the depot, promising additional future profits.

Stoffel told Sarraf about an idea he had to mine Saddam's abandoned tanks and armored vehicles to build a mechanized brigade for Iraq's new army. Some of Saddam's tanks and personnel carriers had barely a scratch; they could be refurbished for use by the new Iraqi military. Many of the other vehicles in the depot were beyond repair, but their heavy plates could be removed and used to armor the trucks that Iraq's new soldiers used on patrol. Such was the chaos of reconstruction planning that apparently no one within the American or Iraqi hierarchies had, in the year and a half since occupation, thought to make use of this material.

At about the time Stoffel was negotiating with Sarraf, CPA administrator Paul Bremer was handing over effective control of the country to an interim Iraqi government. Though American troops continued to provide the bulk of the security, the United States accelerated its efforts to quickly recruit, train, and equip a new Iraqi police and military and hand over responsibility for controlling the country and fighting the insurgency. Donald Rumsfeld called it the U.S. "victory strategy." But it was a strategy that required the Iraqi military to be armed with heavy weaponry it in fact didn't have.

The man in charge of implementing that strategy was Lt. Gen. David Petraeus, who led the 101st Airborne Division's drive to Baghdad and now runs the Multinational Security Transition Command-Iraq, or MNSTC-I. In Iraq, it is phonetically referred to as "Minsticky." One of Petraeus's priorities at Minsticky was to better arm Iraq's small military, which was woefully under-equipped to deal with terrorists and insurgents. Iraqi patrols were being ambushed and shot en masse, recruiting posts ambushed and bombed. Iraqi troops armed with Soviet-era rifles often worked from pickup trucks. With heavy armor, tanks, and protected trucks, military experts say, these troops might have been better able to stand up to the insurgents. Moreover, the tanks and armored vehicles would have provided a potent symbol to Iraqi citizens, insurgents, and potential army recruits alike that the new army was able to stand with strength in the face of the attacks, not flee in terror. "Other than training the troops, I can't think of a more critical thing to have done than providing armor for their vehicles," notes Michael O'Hanlon, a military expert at the Brookings Institution.

Sarraf took Stoffel's idea to Iraq's Minister of Defense, and he signed a contract that would pay Wye Oak $24.7 million to refurbish three battalions worth of armored vehicles.

It must have felt to Stoffel like a fantasy come true. He was now an integrated part of the U.S. "victory strategy" in Iraq, with tens of millions in profits to boot. Faced with one of their most important projects in Iraq, the U.S. military had turned to him.

A cultural misunderstanding

The first phase, according to Col. David Styles, a coalition advisor to the project, was "to refurbish vehicles and rebuild a tank maintenance depot." Under the plan, Styles said, Stoffel's company would bring 40 armored personnel carriers from an old Iraqi military fortress to the Taji base and then paint them, fix the engines, and get them primed for war. The tanks were in pretty bad shape: Stoffel's task was like taking a fleet of 1970s police cars that had been held in mothballs and trying to get them ready to patrol the streets. Stoffel's Iraqi mechanics were forced to cannibalize what couldn't be repaired. "For every one vehicle we were going to refurbish," Styles told me, "we had at least two, sometimes four, vehicles that we could pull parts off of."

And that's where the trouble started. The Ministry told Stoffel his invoices were inexact and demanded that he accept payment not directly from the Ministry but through a private intermediary--a financier, or "bank guarantor." The intermediary's name was Raymond Zayna, a cultured, suave French-Lebanese businessman with a company called General Investment Group.

American and British officials were confused by the arrangement; one British general told me he was "dissatisfied." But Styles says the Ministry insisted on having a financier handle the funds "as a check and balance for a large contract." He insists that differences over the contract are largely a result of cultural misunderstandings. "It's an Eastern, Arabic, Islamic way of business that is different than a western, Judeo-Christian way of business," Styles told me. "That does not mean it's corrupt." In any event, Stoffel signed over a limited power of attorney to Zayna, who was to provide "all financial services with respect to the.... Contract when and as requested by Wye Oak."

In October, the Iraqi Ministry of Defense disbursed the $24.7 million to Zayna. In a written statement sent to The Washington Monthly by a source close to Zayna, the source said that Zayna put the money in a trust account in an international bank in Lebanon; he won't say which one. The source says Zayna obtained a "bank guarantee," which was required by the Iraqi government. But the end result was that, even though Wye Oak had originally signed a contract with the Ministry of Defense, it wasn't getting paid. Though Zayna himself had spent a small amount (less than a million dollars) to buy Stoffel supplies such as paint, the Lebanese financier did not distribute any money to Stoffel's company.

(The source close to Zayna disputes some other details of this account. The source says Zayna met Stoffel socially, and it was the American contractor who brought the Lebanese financier into the project, not the Ministry of Defense. Additionally, the source says, Zayna was not acting as a broker; instead, he was working together with Stoffel on the contract in a joint venture. Zayna's associate also says that Stoffel had made "extraordinary and outlandish demands for immediate payments of cash" to which he wasn't entitled.)

Stoffel felt betrayed. He had come up with the idea for the project and been awarded the contract by the Ministry of Defense. At least one top Coalition aide working directly with the Ministry felt the same way. "I felt Stoffel had done work he hadn't been paid for," he said.

The fruits of all Stoffel's efforts in Baghdad, tantalizingly close, were now slipping from his grasp. His team was still shipping and refitting tanks and personnel carriers, but in mid-November a frustrated Stoffel flew back to the United States to try to shake the trees. After all, he still had friends and access in Washington.

Heads will roll

On his return to the nation's capital, Stoffel quickly met with aides to Sen. Rick Santorum (R-Pa.), who is not only a senator from Stoffel's home state but one of K Street's strongest allies on Capitol Hill. Santorum fired off a letter on Dec. 3, to Defense Secretary Rumsfeld asking the Pentagon to raise the issue of Stoffel's contract with the Iraqi Minister of Defense. Stoffel, who had cut his ties with Charles Black's BKSH when he broke with Chalabi, went to another lobbyist he had on contract--the connected Republican insider Pat Templeton. Templeton got Stoffel a meeting with Deputy Undersecretary of Defense John Shaw, who knew the lobbyist because they both belonged to the posh Metropolitan Club down the street from the White House. Shaw was an odd man to go to with such complaints because he himself was in the middle of a bizarre ethical storm, having made allegations of bribery against other U.S. officials in Iraq, which subsequent investigations found to be unsubstantiated. During their meeting, Shaw assured Stoffel he would do what he could to help Wye Oak. But, as it turned out, that wasn't much: Because of the scandal, Shaw lost his job a week after the meeting.

Meanwhile Stoffel, as the Los Angeles Times has reported in a series of stories about his project and death, sent streams of aggressive emails to his contacts in Iraq, including Col. Styles. "If we proceed down the road that we are currently on," he wrote on Nov. 30, "there will be serious legal issues that will land us all in jail. There is no oversight of the money and if/when something goes wrong, regardless of how clean our hands are, heads will roll and it will be the heads of those that are reachable, and the people who are suppose[d] to know better (US - citizens, military, etc.)."

Stoffel told associates both in Iraq and in Washington that he had been asked for kickbacks by Ministry officials, and that he'd refused to pay them. (Sarraf, the Ministry of Defense official, said in a written statement to The Washington Monthly that no one at the Ministry would have made such a demand.) Col. Styles read the email to Raymond Zayna. "I didn't see any corruption," he insists.

A few days later, on Dec. 2, Stoffel was "invited-slash-ordered" back to Iraq by the Coalition military, according to his associates; American and British soldiers didn't want Stoffel's project to lapse. Stoffel left his Pennsylvania home for the airport that evening and, on Dec. 5, was in a conference room in the Green Zone with Raymond Zayna and a bevy of coalition and Iraqi officials.

On the same day, insurgents in Tikrit gunned down 17 Iraqis who were traveling by bus to their jobs at a military base; three Turkish truckers and four members of Iraq's security services were killed in several other attacks. Meanwhile, the country's interim president announced absurdly on U.S. television that American troops could start to leave within "six months, or eight months, or a year."

But in that meeting in the Green Zone, the issue was money. Stoffel yelled at Zayna, Styles recalls; Zayna yelled back. According to Styles, a British general on Petraeus's staff asked them to calm down, and Zayna and a Ministry of Defense official eventually agreed to make an initial payment of $4.7 million to Stoffel, as soon as he provided more detailed invoices.

After the meeting, Stoffel called home to the States and sounded euphoric. "He left me a voicemail message on my phone," says one associate, "in which he was exuberant. Everything was solved."

Styles recalls that Stoffel then traveled the 15 miles to the Taji base, to prepare his invoices and itemize the bills. He stayed for three days. On Dec. 7, Styles says: "He spent part of the day with me at the recovered enemy weapons site looking at pistols and rifles." The next day, Stoffel got into his black, unarmored BMW wagon with Joe Wemple in the driver's seat, and started back to Baghdad. Styles says he was expecting to meet Zayna, go over some paperwork, and then meet with Ministry of Defense officials the following day. Stoffel told the colonel, "You know, I think everything is okay."

"CIA shadow manager"

Just weeks after the bodies of Stoffel and Wemple were found, a then-unknown group calling itself Jihad Brigades claimed credit for the killings. A few months later, another group calling itself Rafidan, the Political Council of the Mujahideen, celebrated the killing of "the devil Stoffel," who it called a "CIA shadow manager" who had conspired with Chalabi and others to siphon off Iraq's riches. In a video, a man with his face concealed announced in Arabic that "it is the biggest crime that has ever been committed through the ages and wars." Stoffel, he said, "was killed on the 8th of December 2004 after close monitoring of our moles on [sic] the hands of the Islamic Jihad Brigades."

But among Stoffel's friends and associates, other theories circulate. Stoffel could have been killed over the tank contract, they claim, because he was threatening to blow the whistle on corruption. Stoffel's lawyer, John Quinn, says there should be an investigation as to whether the murder was "related to his business." The evidence may be circumstantial, but, Quinn suggests, the timing of Stoffel's death--just as he believed he had resolved a disagreement with Ministry of Defense officials involving millions of dollars--may not be a coincidence.

Col. David Styles, now posted at Fort Hood, Texas, says that two FBI agents came to see him in April, asking questions about Stoffel's death. "They said they were investigating his death," he says. "They wanted to know if I thought it could have been an assassination." He told them he believed the killing had been random, but "anything's possible."

Stoffel's bullet-ridden body ended up in a Baghdad morgue. Officials there notified the American military, and the body was flown back to Dover Air Force Base in Delaware where military doctors conducted an autopsy, before being delivered to his wife in Monongahela, Pa. On Dec. 18, in a ceremony with full military honors, Stoffel was buried in the cemetery of his family's church in a handsome brown casket; two brothers and his pastor spoke at the funeral. Gen. Petraeus sent Stoffel's widow and four children a letter of condolence.

"It was Dale's last big hurrah in the arms dealing business," a close relative of Stoffel's said. "It's a difficult business to be in. Most of the people in that line of work end up like he did."

Meanwhile, Raymond Zayna took over Wye Oak's contract to build a mechanized brigade from Saddam's scrap. Ahmed Chalabi recast himself as an anti-American hero and won control of the Finance Ministry, with dominion over all of the country's oil wells. And Iraq plunged into another spasm of violent killing.

Aram Roston is an investigative producer with NBC News.


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