Iraq fraud case focuses on interpreting spreadsheet

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By Ann McGlynn | Wednesday, April 16, 2008 |

An Excel spreadsheet that crunched the numbers for three fuel tanker bids in Kuwait in the days preceding the invasion of Iraq either showed a simple mistake or a purposeful manipulation that led to the project costing eight times more than estimated, testimony Wednesday in U.S. District Court in Rock Island showed.

For attorneys of Jeff Mazon, accused of rigging the bid and facing trial for fraud, a spreadsheet deciphered Wednesday shows that the overworked contract manager at Camp Arifjan in Kuwait made a simple mistake. The mistake, the say, should have been caught by three people who signed off on the contract but was not.

Mazon accidentally converted U.S. dollars to Kuwaiti dinars twice, causing a project estimated at $685,000 to cost $5.5 million, they contended.

“The formulas are readily available for anybody to see,” attorney Alan Brunell said while questioning William Lidinsky, professor at the Illinois Institute of Technology.

But for the prosecution, the spreadsheet shows a manipulation of the document that caused two bids to be inflated multiple times over, testimony from Lidinsky showed.

The spreadsheet had three bids and one empty space for a fourth bid. Two of the bids — the winning bid and its closest competitor — were tabulated one way, including the dollars-to-dinars conversion mistake. A third bid, which a note on the spreadsheet said could not meet the needs of the Army, was calculated a third way, with just one conversion from dollars to dinars but with incorrect symbols noting that conversion.

The fourth, the empty space, had the correct formula and symbols to compute a bid, testimony showed.

“Somebody had to go through quite a bit of extra effort” in the bids for LaNouvelle, the winning contractor and TWG Kuwait, the next highest bidder, Lidinsky said. He characterized it as “not a natural way you would use a spreadsheet” with calculations that “back up on themselves.”

Mazon was responsible for issuing subcontracts under the Logistics Civil Augmentation Program. The contract, managed by a command on Arsenal Island and awarded to KBR, provides everything from laundry service to food for the U.S. military.

Mazon is accused of inflating the bid to benefit LaNouvelle.

When Mazon left KBR in June 2003, Ali Hijazi, a LaNouvelle manager, gave him a $1 million check, “an award for Mazon’s favorable treatment of LaNouvelle,” prosecutors say. Hijazi also is charged in connection with the case. He remains at large in Kuwait.

The trial is expected to last between two to three weeks.

Ann McGlynn can be contacted at (563) 383-2336 or amcglynn@qctimes.com.