Rep. Henry Waxman, (D-Calif.) wrote a letter this afternoon to Defense Sec. Robert Gates accusing Harry Sargeant, the head of the International Oil Trading
Rep. Henry Waxman, (D-Calif.) wrote a letter this afternoon to Defense Sec. Robert Gates accusing Harry Sargeant, the head of the International Oil Trading Company of “reprehensible war profiteering” on Iraq War contracts. Sargeant’s company has reaped $210 million in profits by overcharging the Pentagon for oil fuel that is shipped from Jordan to Iraq.
The timing of Waxman’s allegations is interesting. Sargeant is a top bundler for Sen. John McCain, having raised $500,000 for the Republican presidential nominee.
The only political ties mentioned in the letter, however, are those between Sargeant and the Jordanian royal family.
International Oil Trading won three separate contracts, valued at $1.4 billion, from the Pentagon’s Defense Energy Support Center to deliver fuel to Iraq from Jordan. (The fuel was often used in U.S. jets.)
In each of the contracts, the company was either the highest or second-highest bidder. It refused to charge less than $2.10 a gallon for the oil it transported. A GAO report estimated that by not setting a more competitive price, the Pentagon cost taxpayers $180 million.
So how did International Oil Trading keep winning contracts?
Sargeant insisted to the Pentagon that his company was the only one authorized by the Jordanian royal family — and Jordan’s minister of energy and natural resources– to transport fuel. Yet what the Pentagon never investigated is that you don’t need authorization from the Jordanian government. From Waxman’s letter:
During the process of awarding the contract, DESC [defense energy support center] added an amendment to the contract requiring all bidders to obtain a letter of authorization from the Jordanian government allowing the company to transport fuel through the country…
DESC officials told the committee that they were informed by U.S. Embassy officials in Jordan that this requirement was based on Jordanian law. According to a report issued by the Library of Congress, however, Jordanian law does not require an authorization letter to transport fuel through the country.
Waxman has asked Gates to review all of International Oil Trading’s contracts. This may be the beginning of the end for Sargeant’s company, which is listed as starting-up the year it received its first Iraq War contract.
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