Audit: Pentagon overpaid oilman by up to $200 million

[Modbert]

Pentagon overpaid oilman millions, audit finds - The Washington Post

A Pentagon audit has found that the federal government overpaid a billionaire oilman by as much as $200 million on several military contracts worth nearly $2.7 billion.

The audit by the Defense Department’s inspector general, which was posted on the Pentagon’s Web site this week, estimated that the department paid the oilman “$160 [million] to $204 million more for fuel than could be supported by price or cost analysis.” The study also reported that the three contracts were awarded under conditions that effectively eliminated the other bidders.

Harry Sargeant III, a well-connected Florida businessman and once-prominent Republican donor, first faced scrutiny over his defense work in October 2008, when he was accused in a congressional probe of using his close relationship with Jordan’s royal family to secure exclusive rights over supply routes to U.S. bases in western Iraq.

Rep. Henry A. Waxman (D-Calif.), who led the probe, asserted in a letter to Defense Secretary Robert M. Gates that Sargeant had won the three jet fuel contracts, despite having among the highest bids, because he had an effective monopoly over the routes. Waxman accused Sargeant and his company of price gouging and “engaging in the worst form of war profiteering.”

Waxman said in a statement Thursday that the report “confirmed what we found in 2008: the International Oil Trading Company overcharged by hundreds of millions of dollars while the Bush administration looked the other way.”