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

Man, some of you need to get over yourselves! I dont care who you are, if someone helps you to get a job, whether as a waitress or as a recipiant of a government contract you are going to want to help them when THEY need YOUR help! You know!! Vote for them if thats all you can do..the waitress...or help them to raise $100,000.00 for their campaigne if you are lucky enough to be the government contract recipiant!! Get OVER it! This is NORMAL, people!! Being republican or democrate has NOTHING to do with it and there is NOTHING wrong with it! Good Grief!
Why get all excited?  Don't be trapped by the "now."  Politicians of all parties, in all levels of government, have been doing things like this for years.  And they will keep doing them as long as we have such an occupation as
"professional politician."  
Start term limits for every office (the US President is limited to two terms, and that works).  To level the playing field publicly fund all candidates, and limit the allowed expenses of every candidate to whatever public funds are available.  Give the same amount of free air time to each candidate (the FCC says radio & TV stations are to serve the public interest).  Ban all fundraisers (no longer needed).  Ban all 527 groups.  Ban all lobby groups.  Prohibit lawyers from suing to allow any candidate to spend more than the public limit.  Make it a crime to mislead the public by saying or implying a candidate holds a position other than he/she actually does.  So called "free speech" requires responsibility, a character trait I haven't seen in many "professional politicians" during my lifetime (59 years).
Doing these things should eliminate much of the political corruption we witness.  And it will make it possible for anyone (not just millionaires or those with millionaire friends) to again run for public office.
Eliminate the money factor and campaign on ideas.  Restore "public service" to actually serving the public.  We the people have the power to make this happen, but will we?
Well said Pokey.  Well said.
We need to enforce the rules we had in WWII. Companies that did buisness with the Federal Government and especially the War Department (DOD) made little to no profit from their transactions, and were watched very closely to avoid war profitering.
So you think the military should be over charged than the normal American for Oil ? LoL, I mean come'on they already profit from it before the $1.08 over the market price.
So your saying "Sure, It's fine if you jack the price up as much as you want! Your funding our war!"
Yet putting a drain on the American economy even more, as if we don't have enough issue's.

You Need To Wake Up!
For the record, to qualify for this contract the bidder must have a trans-shipment license from the government of Jordan. The government of Jordan issued only one license. Not surprisingly the company that received the license had a partner who is the King of Jordan’s brother-in-law and the other partner has intimate connections with the Republican party. The King of Jordan’s brother-in-law is now suing his partners for breech of contract; (read here, did not receive a big enough cut).
The Jordan connection was one of the ways to guarantee support from Jordan during this illegitimate war. The fallout for Jordan during this war has been enormous, influx of untold numbers of refugees, a huge economic impact and the instability injected into the entire Middle East. This is the product of this Illegitimate Presidency, steal an election and ruin our country, just great.
The facts about Bush and Chaney (sic) are very well established. Reading books and watching documentaries can be very enlightening, although it is a little scary to have the wool pulled from over your eyes. You might start with the Frontline special "The Dark Side" about Dick Cheney. You can rent it from Netflix. It's a real eye opener. With lots of facts. Draw your own conclusions. There are many, many other similar sources that document our slide away from freedom. Let those who have eyes to see, and all that.

If more Americans really dug into the facts, from a myriad of reliable sources (including a number of former Bush admin players), the level of discourse could be raised to the level some here seem to desire. But be careful what you wish for ... ignorance is bliss, knowledge can be very painful and discouraging.

Last chance for America comes this November, in my opinion. Everyone get out and vote! Let them know that the status quo is no longer the status quo. We are the American people, and we can make the politicians work for us again.
4000+ DEAD
$$$ Trillions of Dollars spent
EXXON---2006-2008 Profited more money than any company ever in the WORLD!!!

Those are FACTS!
Well, I think the "cat" is out of the bag!Just about all the major oil companies from the US is in Iraq dividing up the oil, including BP from Great Britain. And guess what? There's no mention of shares to the Iraqi government as far as "their" oil is concerned.
I'm sure we already knew that the invasion of Iraq was actually to get their oil. No WMD; "just smoke and mirror"... the capture and execution of Sadam Hussein was the "main show". The lost of american lives is beyond tragic! It's beyond belief!! The invasion of Iraq was actually the start of colonizing the country to get to their oil. The U.S have no intentions of pulling out of Iraq; it's there to stay!
The rapid rise of oil prices and gasoline, along with the economy failing is like pieces of a puzzle that are finally falling into place. I gotta say this though;what a terrifi plan! Do you feel like a fish that just got "hooked"?
You want to blame Bush/Cheney & Associates? Right,on....while you're at it, blame our congressional "do nothin's",too. They allowed this administration to hog tie them and left the congress to wallow in "stuff that pigs make when they wallow around"!
I wonder what's next?
WOW!  Are these responces about politics as usual?  The Iraq war?  Corperate Greed?  High gasoline prices?  The impassioned emotions run the gammit.  Personally, I give up when I hear stuff like this.  Here's why:  If you have clean drinking water, a toilet that flushes, heat in the winter, and an electric light to turn on at night--YOU'VE GOT IT PRETTY GOOD.  Here's the thing; most American's peviously scoffed at government regulations/intervention, they sold their homes, built McMansions in the suburbs, overstated their incomes to do so, convinced FEMA to certify their levies so they could drop their flood insurance, cut taxes and the government progams that were supported by them so they could afford their SUVs and live like the Jones.  Now, all of a sudden their interests rate spike, the value of their homes declines, the levy breaks flooding their homes, and the price of gas is breaking them.  So what!  Are not these the same people that demanded reduced government spending?  I find it ironic how all of a sudden these are the same peeps with their hands out to the government BEGGING for money, the same people who are now asking how stuff like this can happen in America...  WOW!  Hey, Republicans--YOUR GETTING YOUR MONEYS WORTH!!  Choke on yer dang stimulus checks!  
America should practice what it preaches. We should not have double standard as to some countries. Think of America as parents who want to bring up their kids in a righteous way. How could we be respected and honored if we deal with countries according to our whims. Our number one priority should be our country's interest ( the USA not an elite greedy corrupt group of people) but that does not mean that we should invade, screw, or meddle with other people's business. Myybe, you would categorize me as naive and do not know what politics is about. But history has proven that a lot of the deals conducted behind closed doors and which we are unaware of are corrupt and do not serve our country. Washington, stop hiding behind "doing the best for the American people". I have hope that Obama will change all that. Hopefully, Washington and power does not change him. If Obama Leaves everything status quo, I will never ever vote again.      
You are all whinning like children. Do you have any idea what it takes to get fuel thru a war zone? I do I have drove these trucks from base to base with fuel ect. 1.08 a gallon is cheap probally 1 truck and its cargo is lost out of every 100 loads at a min that could cost upwards of 100k and the average military tanker holds 7500 gallons which would translate to 8100 profit so 1 lost truck would take atleast 15 trucks to just break even if you also consider operating cost so stop whinning and start a company and do it cheaper if you can.
This story merely opens the door. Don't ask the media to know the contract details or information about other bidders until the committee can get it out of the Pentagon. The fact that a major fundraiser got a no bid deal from a program the candidate supported wants to continue should raise questions from everyone. The Pentagon should immediately make all details public. Why wait for the committee to ask unless it is trying to work out plausible half truths.
I remember a time in history when the people weren't content to sit at home on their computers and complain about what was going on.  We protested and marched and shouted to make ourselves heard.  Everyone wants things to change, yet nobody has the testicular fortitude to get the ball rolling. Is it because we are so divided politically and spiritually that we no longer feel any kind of brotherhood amongst eachother? Or is it fear of our own government?  I thought I lived in the United States of America. Not communist Russia. Let's take back our country, people!
All polititions are lieing thiefs . Why are we worried about some third world country causing problems . If they threaten us then go over there take care of the problem and come home . Let them rebuild there own screwed up place . We have our own problems right here . Our great nation was built by great men who fought and died to build this country . Im tired of our brave soilders dieing just so a lieing polition can get rich . We have enough poverty here we cant fix . So if the people of these other countrys want what America has let them get it for therselves . All it takes is a little of thier own blood . The billions of dollars being waisted on those places can go to better use right here . American blood has been spilled on ground that has no purpose to us . We had a threat at one time we took care of it now come home and fix America . If the threat is still there then turn our military loose and let them do their job . We learned enough from Veitnam to know the U.S. military is not a police force . Dont you see what is actualy happening . Its a political war . The rich gets richer the poor gets dead .
i was just reading the comments and have to wonder what they are growing in omaha that john is smoking. most successfull war in history? how do you measure that john, omaha,nebraska. 400 wmds found to date. are you kidding? how about sending me a picture of one of them. you should see the size of the shredder set up in kuwait to destroy everything from barely used tents,cots, new desert tan boots to generators, trucks, transports etc. yes, i have pictures! shredding and destroying millions of dollars of supplies and they just keep ordering more.... wake up america!! it is no longer a conservative/liberal debate. both sides are wasting and giving away your money every second of every day. the republicans are definitely more prolific at stealing our money and when anyone tries to call them on it they attack the source with claims of lack of patriotism. thank god we only have to suffer through a few more months of the worst presidency i have had the misfortune to witness in my lifetime.
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".  
Jane Doe, Tucson, AZ (Thursday, June 19, 2008 9:58 PM)
Jimmy CARTER egghead
Bush trying to finish his dads work, another failure. Another Viet Nam our men and women dying for the power and money hungry men and women that run this country. A revolution might be in order.
It should be note the IOTC was spun off from Sargeant Marine, one the largest asphalt and bitumen shipper in the world, and that owns a fleet of tankers – ten at last count. The company was founded by Harry Sargeant Sr. in 1983 following his distinguished career as a Naval Officer. Harry Sargeant III soon joined his father at the company after his own active duty service as a Marine Corps fighter pilot. Harry Sargeant III continued to serve his country in the Marine Corps Reserves as the father and son grew Sargeant Marine into what it is today.

International Oil Trading Company was spun off from Sargeant Marine, and is far from being a company that transformed “itself from an unknown business in 2004 to a major Pentagon contractor in only a few years" as the NBC News article states. IOTC’s founder and President has been in the oil transport business for years and a defense contract for years as well. What Mr. Roston has attempted to insinuate is that somehow the IOTC contract and fundraising for Senator McCain are linked. The first IOTC contract was awarded to Mr. Sargeant in 2004 and that was after the initial winner of the contract failed to perform, having not delivered even a single drop of fuel to the troops. Future contracts have been awarded to IOTC based on the company’s ability to perform over everyone else.


A Clear Indication of a Left Wing Smear Campaign - Trashing Military Contractors

I was recently at a dinner party in Palm Beach and an interesting question was posed to a recently retired Army General who had spent a fair share of his last remaining years at Central Command, or CENTCOM as it’s commonly referred to. The question was “Are civilian contractors a good idea in Iraq?”

“Without question,” was the reply from the retired two-star. And he went on to explain the essential role that civilian contractors have played in this war and in many past wars going back to World War Two.

CENTCOM, currently commander-less with the recent retirement of Admiral Fallon, is comprised of the U.S. Army Forces Central Command (ARCENT), U.S. Air Forces Central (CENTAF), U.S. Marine Forces Central Command (USMARCENT), U.S. Naval Forces Central Command (USNAVCENT), and the United States Special Operations Command Central (SOCCENT). In addition to the above there are some major subordinate multi-service commands that also report to CENTCOM that are participating on the ground in Iraq or Afghanistan and include Multi-National Force – Iraq and Combined Forces Command Afghanistan.

CENTCOM’s geographic scope of responsibility is vast and covers east Africa from Kenya to Egypt, including Somalia, Ethiopia, Sudan, and Djibouti, all of the Arabian Peninsula, across the Persian Gulf covering Iraq, Iran, Syria, Jordan, Israel, and north covering all of the “stans,” Pakistan, Afghanistan, Tajikistan, Kyrgystan, Turkmenistan, Uzbekistan, and Kazakhstan. That’s quite a bit of territory and a weighted responsibility. Getting the most attention is the Iraq effort, both in terms of boots on the ground and expenditure. The Iraq War order of battle is under the command of General David Petraeus, who will report to CENTCOM once that post is again filled. Now for General Petraeus.

As the Commander of Multi-National Force Iraq, General Petraeus commands essentially everything in Iraq, which amounts to 15 combat brigades and in excess of 140,000 troops. Fueling this extraordinary effort is the fuel itself, which in Iraq amounts to 50 million gallons of fuel each month. That works out to be about 12 gallons per soldier each and every day. That more than six times the amount of fuel per soldier that was used per day in World War Two, but we are a much more mechanized military today. Where does the military get all this fuel? The answer is multiple sources.

The military purchases the majority of its fuel from its oil-producing friends such as Saudi Arabia, Qatar, and Kuwait, and then ships the fuel to where it’s needed in Iraq. Under a current agreement with Kuwait, the troops operating in Iraq receives approximately 860,000 gallons of jet fuel from Kuwait each day at less than half the market price. The Defense Energy Support Center – Middle East (DESC-ME) is responsible for the procurement of the fuel being used in Iraq, as well as the contracting of the suppliers. One such supplier is International Oil Trading Company USA (IOTC USA).

Under the current DESC contract IOTC USA supplies aviation turbine fuel, diesel fuel, and motor gasoline to locations in Iraq that include Al Asad, Al Taqqadem, Trebil, and Korean Village. The Defense Energy Support had specified that the fuel needed to transit Jordan prior to entering Iraq, which required cooperation of that Kingdom. IOTC was successful in securing the necessary authorizations, the only company bidding to do so, and was awarded the contract and has successfully performed for the DESC since 2004. Now why use contractor to perform this mission? Because it’s cheaper in the long run and for the very same reason that the Department of Defense contracts out for most everything that supports the Warfighter other than the actual conduct of the war. Imagine for a minute a military that drilled for its own oil, refined it themselves, and then shipped it in tankers and fuel trucks that would have been built by the military. That’s just preposterous and doesn’t warrant further discussion. The military is elated with the performance of IOTC and so was the General that I spoke with. So why are there those who are critical of IOTC’s performance, such as Aram Roston of NBC?

That’s a real good question and I wondered myself and asked the General that very same question. He was equally perplexed and surmised that politics and special interests may have had something to do with it. Again though, why would a reporter, Emmy winning no less, allow him self to be swayed by politics and special interests? Using a double-barreled Latin phrase, I began an earnest search for a bona fide answer to that question. Making his report all the more least interesting is Mr. Roston’s concerted effort to turn a non-story into a story by use of innuendo and misstatements.

In the report Mr. Roston referred to a legal dispute between a former business associate of IOTC and wrote the following: “According to minutes of a company meeting in Amman attached to the lawsuit, (Mr.) Sargeant …pushed for “maximizing profits by getting all the contracts and not leaving hope for the competitors.” Am I missing something here? I would hope that Mr. Sargeant, who heads up IOTC, would not push for the just the opposite and insist on maximizing losses and leaving the door open for all competitors. Maybe Mr. Roston would hope for the most inefficient and least competitive bidders get all the government contracts – that would really save the taxpayer – not. Moving fuel across a desert requires the utmost in efficiency and I would pray that be the primary directive of any contractor the United States Military gives a job to.

The classic twist from Mr. Roston came in the form of the following “The 2007 contract is potentially extremely profitable. For each gallon of jet fuel that is delivered to the U.S. military in Iraq, IOTC charges the Pentagon $1.08 over the market price.” The Department of Defense pays market price for its fuel for the most part, and IOTC is being contracted to get that fuel to the military based upon the contract. IOTC must take that fuel across Jordan from Al ‘Aqaba to Trebil, and then through the Anbar province of Iraq to the various bases. That is a job that can’t be accomplished at market price of fuel. It actually costs money to drive fuel, believe it or not, and sometimes those trucks breakdown, or get attacked, or even blown up. I’m certain that upon more careful examination of the mission, Mr. Roston would discover that. I would hope that the sharp elected officials on Mr. Waxman’s committee investigating the $1.08 should figure that one out. “The $1.08 ‘differential” includes costs, such as transportation and security and profit.’”

My next question is who would gain by Mr. Roston’s slanted reporting? He did imply that the contracts IOTC had might have something to do with the fact that the owner is politically active and supports McCain. Who does Mr. Roston support? Who does NBC or MSNBC support? Now this is the same network that employs Keith Olberman. Does Mr. Roston have something against oil transport companies, or people of Islam, perhaps he dislikes Republicans, or perhaps it may be all the above?

The general and I continued on with our conversation and I asked him just how difficult it was to get the fuel to the troops. He responded that unequivocally it was a difficult task. There is significant advance planning that goes into the bulk transport of fuel anywhere, let alone through a war zone. Convoys are subject to sneak attacks by insurgents; therefore if a truck breaks down and a delay is expected, the Army escorts have no other choice but to destroy the vehicle. IOTC earns every bit of their $1.08. The general could not have stressed the hazards of the job more. Mr. Roston and Congressman Waxman should be applauding rather than assailing IOTC.


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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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