By Aram Roston, NBC News Producer
A prominent fundraiser for Sen. John McCain's presidential campaign is facing a new legal challenge over a lucrative Pentagon contract that involved shipping oil to military forces in Iraq. A competing firm filed a federal suit under the Racketeer Influenced and Corrupt Organizations (RICO) Act this week against the fundraiser, Harry Sargeant III, and his company, International Oil Trading Company. The suit accuses them of a "bribery scheme" to pay officials in the Kingdom of Jordan, in an effort to keep competing firms out. Sargeant and his company deny wrongdoing and say no bribes were paid.
Sargeant is the Finance Chairman of the Republican Party of Florida, a key state in the upcoming presidential election. The federal lawsuit is the latest case to bring attention to him. NBC News first reported last May that Sargeant was awarded the Pentagon contract even though he was not the lowest bidder. NBC reported he was being sued in Florida state court by a former business partner who was the brother-in-law of the King of Jordan.
Sargeant, center, is seen in this photo from the official Jordanian Embassy Web site
This summer, Sargeant made headlines again. Senator McCain's campaign announced it was returning $50,000 in political donations that had been "bundled" by Sargeant, after the Washington Post brought attention to some of the "unlikely" donors. And just last week, U.S. Rep. Henry Waxman, D-Ca, called on the Department of Defense to investigate Sargeant, and accused him of "war-profiteering" for excessive profits in four successive contracts. A letter Waxman signed said “Mr. Sargeant’s personal gain from these four contracts may have been $70 million or higher.”
The latest suit was filed in federal court in Miami by Supreme Fuels, a contracting firm based in Dubai. The central allegation in the lawsuit is a "conspiracy since 2004 to bribe key Jordanian government officials to ensure that defendants would be the sole recipients of more than one billion dollars worth of U.S. government contracts for the supply of fuels to the U.S. military in Iraq."
The suit claims that, without the approval of the government of Jordan, companies were not able to get the contract from the U.S. military.
Sargeant and his firm have not yet responded in court. But in an email to NBC News, a spokesman said that there were no bribes and only a legitimate "fee" paid to the government of Jordan. "What Supreme [Fuels] calls a 'bribe' was a required fee for importing and transporting military fuel through Jordan," a spokesman for Sargeant and IOTC said. "The fee was paid to an official agency of the Jordanian state and thoroughly documented. This and any other related charge have been shared with the Department of Defense (and to Congress) as part of our transparent disclosure of any and all costs related to the fuel delivery process."
The spokesman said the allegations in the lawsuit amount to a "sour-grapes effort by a losing bidder, an attempt to shake down IOTC for a job well done."
The spokesman also said that "we have driven more than 51,000 fuel-laden trucks into some of the most dangerous areas in Iraq, under challenging, dangerous conditions -- to ensure our troops have an unimpeded access to fuel."
Bribes are banned under the Foreign Corrupt Practices Act, often called FCPA. "You are violating FCPA if you are paying money to a decision maker to obtain or retain business," explained Ethan S. Burger, an adjunct professor at Georgetown University Law Center. "The question is who is the money going to. If the money is going to the government for a transshipping fee, that's not unusual." But--without weighing in on the merits of this case--he also explained that "bribes are sometimes disguised as fees."
