Deep Background : Government waste

McCain fundraiser accused of "war profiteering"

Deep Background — Thu, 16 Oct 2008 17:21:00 GMT

By Aram Roston, NBC News Producer

A company that ships oil into Iraq for use by American forces there "appears to have engaged in a reprehensible form of war profiteering," according to a letter by Rep. Henry Waxman, D-Cal., Chairman of the House Committee on Oversight and Government Reform. The company, International Oil Trading Limited, is run by Florida-based businessman Harry Sargeant, a top fundraiser for the presidential campaign of Senator John McCain.

Waxman's committee launched an investigation earlier his year following a May 2008 report by NBC News that first reported on the oil contracts.

Sargeant, the McCain fundraiser, is the president of IOTC, which won massive Pentagon contracts to provide U.S. troops in Iraq with fuel. NBC first reported on the contracts in May. This summer, Sargeant came under the spotlight again after the Washington Post reported that he was at the center of campaign-contribution "bundling" involving tens of thousands of dollars in political contributions from "unlikely" donors. In August the McCain campaign said it was returning about $50,000 linked to Sargeant's fundraising. ...(read more)

Critics say bailout bill is stuffed with billions in pork

Deep Background — Fri, 03 Oct 2008 17:36:00 GMT

By Jim Popkin, NBC News Senior Investigative Producer

When House members today approved the $700 billion financial-industry bailout bill, they also voted to approve dozens of so-called "tax extenders." Fiscal watchdogs have another word for these "tax extenders"--pork.

You'd need to be a forensic accountant, or a CSI detective, to comprehend the bureaucratic language in the 451-page Senate bailout bill, called H.R. 1424. In tortured English, under the heading "Extension of Business Tax Provisions," the bill lists dozens of tax breaks for companies and industries large and small.

"Subpart F exception for active financing income," reads one section. "Extension of look-thru role for related controlled foreign corporations," reads another.

Watchdog groups including Taxpayers for Common Sense have been tracking some of these obscure tax breaks for years, and have published the most glaring examples. They say the small-print provisions represent billions in tax breaks for certain American industries, and were added as "sweeteners" to encourage reluctant House members to approve the bailout bill.

...(read more)

Scandal engulfs Interior Department

Deep Background — Wed, 10 Sep 2008 20:25:00 GMT

By NBC News

The reports authored by the Department of Interior's Inspector General are not usually, ahem, romance-novel material. Consider the recent barn-burning report that found that an Interior Department agency "circumvented the procurement process by improperly issuing two 15-year cooperative agreements, one for the construction and operation of compression units and one for construction and operation of a crude helium enrichment unit."

So imagine our surprise when the Inspector General released reports today on Capitol Hill alleging that government officials handling billions of dollars in oil royalties engaged in illicit sex with employees of energy companies they were dealing with, and received numerous gifts from them.

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New questions raised about top McCain fundraiser

Elizabeth Chuck — Wed, 06 Aug 2008 18:08:00 GMT

By Aram Roston, NBC News Producer

Harry Sargeant III is a top fundraiser for Sen. John McCain's presidential bid. As NBC News first reported, Sargeant was sued by a business partner over the lucrative profits from Pentagon contracts to ship oil to Iraq. It was a dispute that involved high profile characters, because the business partner happened to be the brother-in-law of the King of Jordan. The legal documents in the case were obtained by NBC News: the initial complaint from the brother-in-law, and the answer from Sargeant and his company.

The Pentagon contracts involved shipping oil through Jordan, and because of the way the bids were structured, Sargeant's company was one of the only ones that could bid, because it obtained a special letter from the government of Jordan.

Now the Washington Post has raised questions about how Sargeant raised more than $100,000 in political funds for different candidates from "a collection of ordinary people, several of whom professed little interest in the outcome of the election." ...(read more)

The 'worst' reconstruction case in Iraq

Elizabeth Chuck — Mon, 28 Jul 2008 14:39:00 GMT

Update: The contracting company that built the Iraqi prison detailed in this blog has issued a statement in response to the Inspector General's audit. Scroll to the bottom of the post to see the response.

By Aram Roston, NBC News Producer

Even for troubled reconstruction efforts in Iraq, this case stands out. Sprawled out in the Iraqi desert in Diyala Province is an abandoned and incomplete prison compound built of reinforced concrete, ringed by a fence and unmanned watchtowers. It cost the U.S. government $40 million to build over three years, before the entire complex was left unattended in 2007, to the wind and sand.

"This was the worst project we've seen!" said Stuart Bowen, the Special Inspector General for Iraq Reconstruction, whose office released a report on the site, known as the Khan Bani Sa'ad Correctional Facility. Much of the anticipated reconstruction in Iraq following the 2003 U.S. invasion has been hampered by the violence of war, as well as by mismanagement and corruption, as Bowen's office and other investigations have documented in the past.

The report lays out a withering critique of what happened. It was meant to be the first phase of a 3,600-bed prison - with space for 1,800 prisoners as a first step. And it was conceived during the days of the "Coalition Provisional Authority," about a year after the U.S. invasion, when Ambassador Paul Bremer presided over the U.S. occupation.

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Congress probes McCain fundraiser's Iraq contract

Elizabeth Chuck — Wed, 18 Jun 2008 19:49:00 GMT

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.

...(read more)