WASHINGTON — A Pentagon audit has found that the federal government overpaid a billionaire Florida 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 website 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, a fundraiser for former Gov. Charlie Crist and onetime Florida Republican Party finance chairman, was implicated in the 2009 indictment of a foreign national who allegedly collected illegal contributions for Crist from California donors. Some of those donors said they never heard of Crist.
Sargeant also faced scrutiny over his defense work in October 2008, when he was accused in a congressional investigation 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 Waxman, D-Calif., who led the inquiry, said in a letter to Defense Secretary Robert 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."
Sargeant's company, in Boca Raton, did not return phone calls seeking comment. An attorney for Sargeant, Ron Uscher, declined to comment. In an interview with the Washington Post late last year, Uscher said that Waxman's investigation was politically motivated and that his client's company had done nothing wrong.
"A guy like Harry Sargeant has a lot of targets on his chest," Uscher said.
Waxman's concerns in 2008 prompted the Defense Department's inspector general to begin auditing Sargeant's company in 2009. Three days after the inquiry began, Sargeant secured another, $1 billion fuel contract from the department.
A Defense Department spokesman said fuel deliveries on that contract ceased in early 2010, coinciding with U.S. troop withdrawals from Iraq. The deal earned Sargeant's company $123 million.