Congress probes McCain fundraiser's Iraq contract

Posted on Wednesday, June 18, 2008 3:49 PM ET
Filed Under: ,

By Aram Roston, NBC News Producer

An NBC News exclusive report that ran on msnbc.com about an unusual Pentagon fuel deal has sparked an inquiry by the House Committee on Oversight and Government Reform, according to the committee's Web site.

As the NBC News report said, the lucrative contract to ship fuel through Jordan to Iraq involved an influential group of people, including Florida businessman Harry Sargeant III, who is now a top fundraiser for Sen. John McCain's presidential bid. It also involved the brother-in-law of the king of Jordan, who is suing Sargeant, alleging fraud. Sargeant is the president of the International Oil Trading Company (IOTC), which won the contract. The Committee Chairman, Rep. Henry Waxman, D-Calif., sent letters requesting information about the deal. One went to Sargeant, the politically active company president. Sargeant, who has raised over $100,000 for McCain, was listed on June 3 as the co-chair of the McCain Victory Committee in Florida. The other letter was sent to U.S. Secretary of Defense Robert Gates. Both letters cite the msnbc.com report, and request contract information.

As NBC News reported, starting in 2004, after the invasion of Iraq, Sargeant's IOTC repeatedly won contracts worth hundreds of millions of dollars. NBC cited Pentagon officials, saying that even though it was not the lowest bidder it was the only firm that met the necessary conditions. The letter, signed by Waxman, quotes the NBC story: "According to a recent press account regarding International Oil Trading Company (IOTC), 'For each gallon of jet fuel that is delievered to the U.S. military in Iraq, IOTC charges the Pentagon $1.08 over the market price.'" The original NBC report said that "Sargeant's IOTC has experienced phenomenal growth since the Iraq war started, transforming itself from an unknown business in 2004 to a major Pentagon contractor in only a few years."

To read the original msnbc.com story, click here.

Comments

Has anything changed as a result of all these investigations?? Seems like a placating news item for the people on the commitee. Haven't they had an investigation every time the gas prices jumped?? Excess profits. I know of no change in way of doing business as a result of these "investigations".
Andy Austrins
Plainwell, MI
No wonder John McCain is in favor of extending the war in Iraq. His buddy is making millions. John McCain should hold out for a bigger donation.
Why is this not the top story on every newscast. This war is benefitting the suppliers but not our service people or the people of Iraq. The sooner we bring our troops home the better.

When will Congress hold the Pentagon responsible for its bidding process.?
Mc Cain will be more of the Bush/Cheney secrative energy policy that includes milking the American public for every last nickel it can get. To think that this presidency has not been about making second class citizens out of most of the country for the benifit of large corporations is to be in the same kind of denial that said OJ was innocent. It requires a suspension of facts that the American people just can't afford anymore.
When will the American people see that our goverment has and will continue too use its
power to gain footholds and create situations for personal profit and gain.
And why are we so disliked as a nation because of these closed door deals that set in to motion $4 plus gas prices.
Iraq is just a cash cow for any one in goverment from top to bottom.  kenneth lantier ocean gate nj
So what else is new? This is everyday business for our goverment and military. WE THE PEOPLE are the ones who suffer. I can not even afford to pay for the gas I use to go to work. This is nothing new.
The original contract was awarded to the Shaheen Brothers Investment Group in 2004 and then quickly withdrawn. The DoD's answer was that SBIG was technically unable to fulfill the contract. But the DoD might have been told about the Shaheen Brother smuggling seven million barrels of oil out of Iraq in 2003.

Anthony J. DeLuca, CEO, of SBIG USA, was formerly with the Carlyle Group-controlled IT Group. Under DeLuca's guidance, the IT Group acquired, among many many other contracts, a $3 billion contract to build military housing. When IT declared bankruptcy, it had already arranged to sell its assets to the Shaw Group.  

Harry Sargeant's partner in the first oil deal was Triagent Petroleum, formed in 2001 by Texas refinery owner, A. J. Brass.
Good morning, thank you for allowing a response to the article.
  To me, the content reeks. There is capitalism and then the type of capitalism just written about.
  I just feel an overwhelming constant sadness at the choices people make--the decisions that would not stand the light of day test if given to the multitude of peoples to vote on--
   I feel sadness, anger and fear. No happiness at all in this article and others of similar vein.
  Thank you to the ones who truly report.
With all the belly-aching the Liberals are doing about how "badly" the war in Iraq and Afghanistan is going, (The most successfull major military engagement of its size in the history of this country), they appear to now want to take issue with how right things are going.  Personally, one thing a journalist could try to do, is to look back in history do a case study and see how much the pentagon has been charged in the past for the same service.  Accounting for the cost of inflation and the cost of oil.  
Of course, that would require something we really have yet to see from msnbc,  Journalistic Integrity.  I guess you all will never get around to reporting the fact that we have found over 400 WMD munitions in Iraq since the start of the war.  But you will run a story like this as if it is front page news.

Oh stop the presses, a contracting company in the U.S. is getting sued.  Oh, my lord how could this possibly happen?  Suck it up folks.  Now its the little things that are ticking you off.
where does the lying and deception of Americans stop?  The Republican Party never ceases to amaze me!
If this war is not about oil, thne it is about profits for the friends of oil and the politicians who support them.

They make me sick for their greed, their lies and their un American activities.

For some, the decision to waste American lives is as easy as the decision to retire richer. Who doesn't want to retire richer? More war, more dead, more suffering, more destruction, more profit. More war! More war!  Er, what I mean is that if we have to invade Iraq as payback for 9/11 and to keep Saddam from handing his huge stockpile of WMDs to all the world's terrorists, what's wrong with making a little good, honest, American profit?  What are you people, communists?  Since when do we conduct non-profit wars?
as lincoln stated at the end of the Civil War, "with certain people profiting from war in the way I have seen, I now see the beginning of the end of the united states."

This could not be truer today.
Another company has a no-bid contract, or something very like one, with the government? *gasp* they kept it secret? oh no!  one thing i will be happy to see in washington is more transparency. our government, elected by us, should be wholly accountable to us for every penny they waste. and we, as citizens, need to be educated enough to understand what it all means.
This is a prime example of why politicians and their cohorts should not be allowed to own or operate in any capacity a business outside any owned and operated in their hometowns local economy, and that should be banned if they are involved in local govt, and so on down the ladder.

War Hawks in the repub regime are not warriors. Only those who participate should have the final say, and they should have to rise through the ranks, from the rank of Pvt. in the enlisted Infantry ranks, and promoted by their peers to the Officer Corps. Wearing the uniform and being a general does not make you a capable warrior. The officer designation is to keep control of the warriors and is necessary, but don't get it twisted about who ultimately is in charge.
No wonder he wants to stay in Iraq, he has to keep that gravy train rollin rollin rollin.
The entire system is corrupt; from the bottom, to the very top. America; clean house.
This is just part of what the whole Iraq conflict is about. It should surprise no one now when we find out about yet another Republican ally making millions from our brave men and women having to fight a war that was unesesary but was for only making the rich more rich, at the cost of the lives of our heroes. If the country would just stand together we could end all of this, and that is exactly why this administration seeks to divide us while they conquer anything and everything that makes them a quick buck, that they only need to satify thier Greed, if for only a fleeting moment.      
Instead of the federal government, or president(s), whomever it will be in November continuing the practise of raising taxes as a first option to shore up some pitfall; instead, they should seek out waste and use the funds retrieve or saved as a first option. I'm sure they'd find enough to have an impact.
"it was the only firm that met the necessary conditions"..........if a contract was awarded to a firm that did NOT meet the terms and conditions of the contract, then they would not only have been negligent in awarding the bid to an inferior vendor, they could have been placing American lives in jepopardy. That is the reason that there are specifications and Service Level Agreements that become part of a contract.

Aside from insinuation - you mention Sarfeant's influence several times, but there is no mention of: A.) What were the other bids and who were they from and B.) What were the terms of the contract that the other bisdders could not meet. Try presenting facts & TRUTH rather then allegations to generate partisanship.!
when are we going to take serious  the crimes of the bush/channey administation ?  Just what does constitute  treason anyway ? the theft of the american people during wartime,money that could have been used to support our country and our  troops has instead been pocketed by white house and their supporters.both being oil men who would have thoght it ?  
To John of Omaha, Neb
You should really get out of your dream world and face the facts not the facts as you see them. There werer no WMDs contrary to what you think.
Of course, that would require something we really have yet to see from msnbc,  Journalistic Integrity.  I guess you all will never get around to reporting the fact that we have found over 400 WMD munitions in Iraq since the start of the war.  But you will run a story like this as if it is front page news.
.................................................
What kind of wmd's, Mr John ?  Chemicals the us sold to Sadaam back when Rumsfeld was shaking hands with good ol' SH ? Nuclear bombs? Or cluster bombs the USA makes and sells to anyone who wants to buy them ?  Please name your source.
thank you.
like i,ve said all along...georgy bush, cheney boy and others including some of your neighbors are making money off of this so called war...the could care less who dies..as long as it's not people that they know...it happened during vietnam and it's happening today...love McCain..love bush and see alot of your friends DIE...greed has it's moments...here's to the rich, who could care less about your sons and daughters...
Well, here's one thing to benefit Obama.  He's not experienced enought to be as corrupt as the rest of them.  'Course that will change once he takes the oath.
I fully agree with Richard O'Brien. this reporting is lacking much needed substance.
When will the American public understand that the war in Iraq is based solely on oil and $$$. Bush and others in his administration were determined not to allow Saddam Hussein to sit on the second largest known oil reserves on the planet. Period. Bush can tell the public this war is about freedom and democracy and wrap the whole thing up in the flag, but the reality is worse dictators existed before Saddam and worse dictators exist now, yet Bush does nothing. Why? Because they knew no wmd's would be found. Bush will never put troops on the ground in a country where there are wmd's (North Korea) because the first U.S. troops that cross the border will be nuked or a nuke will be launched to downtown Seoul or Tokyo. Stop thinking this war is about terror and realize what it is.....a moneymaker. Also, John in Omaha-
If you're going to say 400 wmd munitions have been found in Iraq, use that journalistic integrity you speak of and inform everyone that those munitions pre-dated the first gulf war(pre-1991) and were useless. 4,000 U.S dead and over a trillion dollars spent so the factions in Iraq can still be arguing about who gets what and how to divide their oil revenue (remember the surge?) Yeah, sounds like success to me.
More shanigans, more red herrings and rouses, the den of snakes is not in Bagdhad, it's in DC. America will blow itself up before it could ever elect competant men with integrity.


The GAO is grossly corrupt, this government cannot even follow it's own IRS code much less GAAP accounting. The IRS is corrupt and the tax codes makes criminals out of everyone. It makes you lie, it makes you cheat, it makes you turn a blind eye to currpution in government because they have made you corrupt. Truly, the IRS is an EVIL entity by its very nature and WHY DO YOU DO NOTHING ABOUT IT, AFRAID OF AN AUDIT???!!! So not only does the IRS make you morally corrupt but it emasculates you as well. Americans, unics of the world...running around telling everyone else how to build a country, how to act, how to live? How narcissistic can a country be?

WHY ARE AMERICANS SO AFRAID OF THEIR OWN GOVERNMENT!!!???
And everyone thinks thier vote is wasted it they dont vote for a Republican or a Democrat.  I wonder why people sacrifice our troops for greed.
I did not see anything in this update that says McCain indorses the actions of IOTC. In other words...should all Presidential canidates be held responsible for those actions of others who indorse a canidate for not only President, but other offices as well?
If you read the original article on this you can see that the contract was rigged to start with:

"The way the American military structured the deal, only a company with the blessing of the Jordanian government could win the contract.  A bidder was required to have a Jordanian government "Letter of Authorization," and only IOTC received such a letter."

I work for a US agency, doing aquisition, which one doesn't matter, but i would like to put my two cents here about contractors failing to meet certain specifications.  First and foremost you can write your specifications to meet a particulars company's specifications.  Secondly, if you are looking to help out your friend, some how you will find a way to only make his expertise fit your requirements.  For christ sakes they are delivering fuel to our fighting troops.  I dont recall any contractors in my convoy when i was escorting fuel in and around Baghdad.  

Lets see what the specifications were for delivering fuel to our troops and i bet any one that the specs will match up to IOTC's operational procedures!
I remember seeing WMD's on the TV coverage of the Iraq War. Namely, the missle bodies and tail assemblies found in one warehouse. Technically, missle parts of medium and long range missles are listed as WMD's by the UN, the USA and many other countries. Indeed, Mr. Blix was looking for such items that he never found. So, the bottom line is there were WMD's just not like the kind most people think it of when they hear or read "WMD". Ranting about it resolves nothing. They were there and so what? If you hate Bush, no fact will be acceptable if it collides we preconceived notions based on self promoting "facts". It also has nothing to do with John McCain. Why waste our time?
all of the higer ups in washington are making money on secrative deals. billy bob clinten is still making millions in secrative deals.
Where are those great leaders this country was guided by years ago. We have no leaders left to guide this country thru the worst times in recent history. I live in Quincy, IL and you might as well stand the American flag on a log floating down the river with the rest of the trash. Do you think for 1 second the federal goverment is going to lead the charge to higher ground when it comes to helping this country get out of this economic disaster. The goverment of our country has destroyed our name and our position as the richest country on earth. We have a goverment that can't function because they can't agree on anything. The only reason politions show up here during the flood is to be seen on the nightly news, not because they have a plan to get anything fixed. If I were in charge of this country I would throw every polition out of office, bring all the troops home, and focus on the problems we face here at home. The rest of the world has its problems I agree, but its time to stop trying to fix the worlds problems by throwing billions of dollars out the window at every country on earth. The american people nead a leader, not a bunch of thieves in our goverment that lie and steal out tax money to line their pockets or their friends pockets. Who needs McCain to continue sending this country down the river.
Is this new news? No! The administration has privatized the war so their buds in Texas and other states come out real big! Now its McCains turn- its up to the media to expose this man on a grander scale, you know educate those conservatives a bit. Oh but I forgot many of them never really read!
So the GOP uses our nations blood and equity to support the profiteering of the same buds that coat their pockets! Its called facism!
The terrorists have succeeded...
Our country and its military are stuck in a never ending quagmire. Our economy is on the downward brink...
and our nation is divided morally and politically.
and most of our oil/fuel comes from the middle east!
And the conservatves say they are strong on national security? Dream on!
1 dollar a gallon delivery charge to get the fuel to some of the places it has to go, isn't that much of a charge considering the circumstances. Neither candidate knows all of the workings of their contributors, so stop trying to say they do. McCain doesn't, nor Obama.
Why isnt this more of story in the news. It should get more coverage. Smells fishy.
You know, my kids are going to be really upset - funding this war and all.  :-P
In a country where integrity was never negotiable from its founding, today's experienced politicians prove that if people are in office too long, oblivion occurs. Vote the scoundrels out and for sure, McCain has questions to answer regarding his "experience" and qualifications of moral standing to even be running for president.
I just don't understand some americans.  How often have you gone to work and not expected to get paid?  Let me guess never!!!  As a veteran of the Iraq war I never once remember anyone being short on fuel or for that matter anything else.  So what a someone is making profit suppling our troops with what they need.  This how the world works.  This is how we work!!  So don't support your canidate because he might agree with something that benefits you.  Lets just bring all our troops home and live in a shell.  That way terrorist can just do what ever they wish to do.  Then when they attack us again we can say well at least all these americans were killed saving our government money.  And some company didn't get richer suppling our troops with what they need to defend our great country.  
Some of these people actually sound like they know what they are talking about until you start looking for some kind of facts too support their statements.  If you are going to throw around wild so called facts about Bush and Chaney, please furnish a little proof.
What kind of proof do you want?  Get your head out of the sand.
I agree with you,Loy Archer. 100%
Mr. Roston, keep up the good reporting DO NOT let up!!!.  I work for the Federal Govt. and I'm tired of these Conservative Republicans preaching about how "McCain is one of us, he was in the Military and the Republicans know how to take care of our troops!"

I wonder how the Republicans will try and dodge this story....let's see "the media is biased against our troops blah, blah, blah.....

Keep diggin boys:-)
To Pokey S.,

First, thank you for your service to this country.  You and your brothers and sisters are heroes.  I ask you to consider this.  War profiteering is wrong, and that is exactly what Halliburton, KBR, Blackwater, etc. have been engaging in since the start.  $12B / month is being spent on this war when your brothers and sisters here in U.S. have lost jobs, lost their homes, cannot get health coverage and our veterans are faced with a totally inadequate VA system that has been widely reported (Walter Reed).  Meanwhile, our country is learning about the the Pentagon's widespread abuses in Gitmo (e.g. making detainees drink urine), complete disregard for the constitution, cronyism like this story, and the havoc that the republican philosophy of free market economies has produced in the last 8 years.  I am from a 4 generation military family (WWII, Korea, Vietnam, Iraq)and our brothers and sisters did not die on Guadal Canal, Omaha, Utah, Cambodia and Laos, the 38th parallel OR IRAQ, to allow companies to significantly profit from the blood of our soldiers.  Do a quick study of what this country did during WWII (ration stamps, no meat, Rosie the Riviter, etc.) and you'll get my point.  Americans are a group of people that will do just about anything to support our troops and our government, but not when the war is illegal and profits undermine the effort.  One final point.  For every meal that you ate in country, KBR charged over $30.  Were you being fed filet mignon?  A typical family of five in the states living at or below the poverty line spends $100 or less a week on food.  That's about three meals a day for the 135,000 soldiers currently in country.  God Bless and again thanks for your service to this country.  
All these investigations into improper conduct Never get corrected because Congress does NOT want the American public to know( The old Washington D.C. two step) and this is from both parties.I have retired from the military and former President Carter just about ruined this country. President Nixon and Clinton disgraced this country.Our current President Bush just simply picked the wrong people to listen to and have on his staff and is on the same course as President Carter. We had a a better President and economy with Reagan. Members in Congress are beholding to those who pay for them to be reelected. We spend too much time in raising funds for their campaign or parties. 3-6 months prior to election date is enough.We should allow only money coming from indivduals who are US citizens. No go-betweens from foreign interests/countries including all lobbiest. Also get rid of the electral college. We are now far advanced enough to use the majority vote wins. The news media need to tell the news and not make news which all do now. I still thinks this is the greatest country in the world and change will come but at this rate not in my lifetime or even my granddaughter or grandson.
OMG... Come on people wake up, no matter what party they represent, whether it be democrat or republican, they are all corrupt.
Obama is no better then any other politician if you truly open your eyes to all politicians, corruption all the way... This war has lost less soldiers then any other war in history.
I'll furnish a little proof:  When George W. Bush was informed by his secret service people that "America is under attack" he sat befuddled in front of toddlers for seven minutes.  There are thinking people that still support this guy?  Not to mention his personal conversations with God?  I guess we get the leaders we deserve and I had no idea we were this less-deserving.  Watch while the Bush administration is correctly graded by history as the worst in modern times.  I dare ya to think of another and this is considering Richard Milhouse Nixon.  Sheesh.  If I could have personal conversations with the Lord like our head of state, I'd say "Have mercy".  
I think every politician should be subject to a "politicians windfall profits" tax based on wealth gained after retirement because of having made deals while a politician.  E.g. President Bill Clinton left office owing money.  Now he is worth over $109M.  You cannot make that kind of money in 7 years honestly... it only happens by exploiting your political connections, before or after leaving office.  I'll grant him $1M per year subject to normal taxation, anything over that should be taxed at 100% as a windfall due to his political service.  This would go a long way to discouraging sweetheart deals like we have seen for both Republicans and Democrats.  Dennis Hastard reportedly made $4M in 6 months as a by-product of some pork he had placed in an appropriations bill.  The "politicians windfall profits tax" would have denied him a profit and discouraged much of the pork our legislation is ladened with these days.  (Note:  it is not illegal to be dishonestly exploit connections when it comes to politicians, but this new tax would at least make it less profitable!)
This is to complicated for most Americans to understand,they would rather come up with some lie about WMD's being found than to reach a logical conclusion from the information that exist,

If Saddam had WMD's he should have had them to defend his country just like  some other countries have them.


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Deep Background is NBC News’ investigative blog. It covers national security, terrorism, spies, Iraq, and politics, as well as government waste, fraud and abuse. It is edited by NBC News Senior Investigative Producer Jim Popkin.

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