Dale Stoffel devised elaborate schemes to get Iraqi government contracts to repair things. He posed for photos in the desert wearing a flak vest and toting an M5 submachine gun. He clenched a cigar between his teeth.

He pushed his schemes until they became reality. He signed huge contracts with the interim Iraqi Defense Ministry, the biggest of which was to repair the country's broken-down arsenal of tanks, helicopters and jets.

He was an arms dealer with a mysterious past, a swashbuckling character who had been around the block of international intrigue more than once. But in all the chaos, in a place overrun with mercenaries, privateers and shady government officials, he still expected everyone in Iraq to play by his rules.

At first, he told U.S. military and Baghdad officials that he wasn't being paid for his contracting work and that corruption had disrupted his dealings with the Iraqi interim government. That didn't produce a satisfactory response, so he wrote to the Pentagon and to members of Congress saying that the Iraqi Defense Ministry was ripping him off.

Then, after a year in Iraq, after he hired powerful Washington lobbyists and pressed the flesh with connected Iraqis such as Ahmed Chalabi, and after he secured contracts with the Iraqi government potentially worth hundreds of millions, someone killed Dale Stoffel.

On Dec. 8, 2004, an empty blue BMW station wagon awash with blood and riddled with bullet holes was found on the side of a one-lane road used as a shortcut.

Stoffel had been in the passenger seat. Driving was American engineer Joseph Wemple, an expert carpenter who had worked for Disney World and knew little about living in the kind of shadow world Stoffel embraced.

They had left the Taji military base earlier that day, accompanied by an Iraqi worker, and were headed to their fortified compound outside Baghdad, a 15-minute drive.

After a series of calls, desperate colleagues found the Americans' bodies in a Baghdad morgue. They had been shot to death. The Iraqi employee survived. He has since disappeared.

The killings remain unsolved. A previously unheard-of insurgency group continues to post Internet videos, for no apparent reason, showing documents from Stoffel's laptop computer, which was stolen in the attack.

As time has passed, the deaths of the two men have become one more turn in a twisting road of corruption leading to the interim Defense Ministry, to the issuance of 27 arrest warrants for its members and to the disappearance of nearly the entire procurement budget for rearming the Iraqi military.

That money was to be used so that Iraq could stand on its own and so that its occupying soldiers, mostly Americans, could go home.

Stoffel's company, Wye Oak Technology of Monongehela, Pa., had a rare federal license to import weapons. His former schoolmate Robert Irey, head of the Pennsylvania engineering company CLI Corp., had years of construction experience.

Together, according to the plan, they would get Iraqi military contracts and make lots of money.

Robert Irey's brother, Bill, who did construction work for Disney World in Florida, also signed on, which was how Joe Wemple entered the picture.

"I knew Joe from Disney," said Bill Irey. "He was the project manager for Shades of Green, the Army resort" near the amusement park.

All parties agreed that much of the money earned in Iraq would go to Stoffel, Irey said. Stoffel had the weapons knowledge and had made the contacts, including hiring a lobbying firm that also represented Chalabi's exiled Iraq National Congress.

He used those connections to meet other Chalabi family members - a vast clan whose offspring are scattered through the Iraqi government and business community - as well as interim Defense Minister Hazem Shaalan and other officials.

"It was his idea," said Bill Irey. "He had put together a brilliant proposal."

Wye Oak and CLI refurbished every piece of moving equipment in Iraq's well-worn arsenal, including jets, helicopters and Soviet-era tanks. The work was financed by selling an estimated 30 million to 40 million pounds of military scrap from across Iraq, which Stoffel said was worth at least $1 billion.

CLI retrofitted a number of buildings at Taji military base, installing a kind of assembly line to do the repairs. CLI also provided the manpower. Stoffel's arms license allowed him to buy whatever parts were needed.

The interim Defense Ministry, in the first project of its kind since the U.S.-led invasion, signed the contract. Work began in August 2004. The project was overseen by a rebuilding task force led by U.S. Army Lt. Gen. David Petraeus.

To Stoffel and CLI, the deal was worth nearly $300 million. It also was a windfall for the Iraqi government, which got whatever funds were left over from selling the military scrap after the refurbishing was done.

But Wye Oak and CLI were never paid, both companies claimed.

After the contract was signed, Defense Minister Shaalan "came in and said, 'Oh, by the way, we're putting this guy in charge as an intermediary,'" Irey said.

The intermediary was Raymond Zayna, a Lebanese businessman who was given control of financial transactions between the contractors and the ministry. "We sent an invoice. The Ministry of Defense paid him. But we never saw any of the money," Irey said.

Stoffel thought Zayna was skimming funds and kicking some back to the Defense Ministry, Irey said.

Fed up, Stoffel flew home for Thanksgiving.

He met with staffers from the office of Pennsylvania Sen. Rick Santorum's office, who promised to look into the matter. The Republican senator wrote to Defense Secretary Donald H. Rumsfeld, asking for an investigation of Stoffel's complaints, according to documents supplied to the Associated Press by Santorum's staff.

Heartened, Stoffel went back to Iraq, where he was summoned to a series of meetings in the Green Zone to discuss his complaints. Eventually, it was agreed that Zayna would make an initial payment to the contractors.

Five days later, Stoffel and Wemple were shot to death.

A week after the killings, an insurgent group calling itself the Brigades of the Islamic Jihad claimed responsibility in a video that showed identity cards belonging to Stoffel and Wemple, and photographs of the two taken from Stoffel's computer.

Both men, the video claimed, were CIA spies pillaging Iraq.

But unlike most terrorist postings, it contained no images of the killings or of the bodies, prompting questions about whether the video was the work of terrorists or a smokescreen to hide the murder of a troublesome American.

As for the corruption in the Iraq Defense Ministry that so infuriated Stoffel, it went much deeper than even he suspected.

In May 2005, the Iraqi Supreme Board of Audit presented a confidential report on the Defense Ministry to new Prime Minister Ibrahim al-Jaafari.

It found that widespread fraud under Shaalan had resulted in the disappearance of virtually the entire $1.3 billion procurement budget. The report examined 89 contracts and found that all had been paid in full, via cash bank transfers, in advance of any work being done.

All were awarded to Iraqis acting as intermediaries, including Stoffel's contact, Zayna, and not to the suppliers themselves.

The finance minister called it "possibly one of the greatest thefts" in Iraqi history.

Under the Wye Oak-CLI contract, nearly $25 million had been deposited by Zayna in a Lebanese bank "contrary to general contracting provisions," the audit said.

In October, 27 arrest warrants were issued for Defense Ministry officials, including Shaalan. But by then, he had immunity from prosecution because he was a member of parliament.

He also had left the country. He lives in Britain and denies wrongdoing, though he acknowledges transferring $500 million in ministry funds to a Lebanese bank, to buy armored vehicles, he said. He ran for re-election in December and lost.

The last Bob Irey heard of Zayna, the middleman remains in Iraq. He continues to bill the Defense Ministry for work done under the Taji contract.