A Florida billionaire and top fund-raiser for John McCain has been accused of “a reprehensible form of war profiteering” by the chairman of a Congressional investigative committee.
Rep. Henry Waxman, head of the House Oversight and Government Reform Committee, contends a company co-owned by Harry Sargeant III overcharged the Pentagon over $180 million to deliver fuel to U.S. military bases in Iraq.
In an Oct. 16 letter to Defense Secretary Robert M. Gates, the California Democrat demanded an investigation of Sargeant’s International Oil Trading Company, or IOTC. He said the company received successive Pentagon contracts to deliver fuel to Iraq, worth $1.4 billion since 2004, although it had never submitted the lowest bid.
“If the IOTC contracts had been awarded to the lowest bidders, the taxpayers could have saved over $180 million,” Waxman wrote, citing internal Defense Department documents, company information and email exchanges.
“Of the $210 million in profits received by the company, at least one third—$70 million—appears to have benefited a single individual: Mr. Sargeant.”
Mark H. Tuohey III, a lawyer for Sargeant, asserted that Waxman’s charges were unsupported by the facts. In a written statement to the New York Times, Tuohey called the deliveries “a highly complex, risky and, at times, life-threatening effort.”
Sargeant is a powerful player in both Florida and national politics, with business interests ranging from asphalt to fuel oil.
As finance co-chairman of McCain’s presidential campaign in Florida, he threw a March fund-raiser for the Arizona senator at his waterfront mansion in Delray Beach. The former Marine pilot also shares his corporate jet with Florida Gov. Charlie Crist, a college fraternity brother, and is finance chairman of the Florida Republican Party.
In his letter to Gates, Waxman does not name McCain, or suggest that he had any role in the awarding of the contracts.
Sargeant’s contracts to deliver oil to military bases in Iraq had already been in the spotlight this summer after a former partner filed a lawsuit against him in a Florida circuit court.
The partner, Mohammad al-Saleh, is a brother-in-law of King Abdallah II of Jordan. In the court papers, al-Saleh asserted that he obtained special governmental authorizations for the company to transport fuel to Iraq through Jordan, and was then forced out by Sargeant and a third partner, Mustafa Abu Naba’a, who is also Jordanian.
Sargeant and Abu Naba’a have denied those allegations.
But Waxman asserts in his letter that the company’s monopoly appeared to have been based on their support by Jordan’s royal family.
In one case, he asserts, Sargeant’s company submitted the highest of six bids, but received the contract anyway because it was the only one to have authorization to transport the fuel through Jordan. Although the Pentagon required the authorization as a condition of the contract, Waxman cites a report by the Library of Congress that Jordanian law does not require it.
He also cites documents that quote Pentagon contracting officers complaining that the company’s prices were unreasonably high.
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