Crossing Jordan: Iraq fuel deal sparks lawsuit

Latest contract worth $913 million
The latest IOTC contract is worth $913 million over two years. For 2007 the obscure company was the seventh-largest fuel provider to the U.S. military worldwide, sharing the list with such giants as BP, Exxon and Shell, according to Aviation Week’s Aerospace Daily and Defense Report.

The Pentagon confirmed to NBC News that IOTC was not the lowest bidder in 2007, but said it was the only company that had the required letter from the Jordanian government. In an e-mail, a DESC spokesman said "the decision was made on the basis of best value rather than low price. The award was made to a firm that had a higher price, but was rated higher from both a technical capability and past performance standpoint."

According to minutes of a company meeting in Amman attached to the lawsuit, Sargeant tried to exclude all rivals from the Pentagon contract and pushed for "maximizing profits by getting all the contracts and not leaving hope for the competitors."

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. That $1.08 "differential" includes costs, such as transportation and security and profit.

Company says risk merit reward
Ron Uscher, a lawyer for IOTC, would not confirm the profit margins, but he said it was an extremely dangerous contract to perform. "There are risks involved," he said. “There are mishaps and misadventures along the way — road accidents in Jordan, hostile acts once we cross the border and go to areas in Iraq."

Al-Saleh alleges in the lawsuit that after he arranged the deal, he was cut out in a scheme meant to defraud him. He claims that he and Sargeant and the third partner, Mustafa Abu-Naba'a, a Jordanian businessman, had invested in IOTC Jordan in 2004. But, he says, Sargeant and Abu-Naba'a committed fraud by forming another company called IOTC USA in Florida without informing him and by channeling the Pentagon contracts through that firm. Al-Saleh is suing Sargeant, Abu Naba’a and the company for $13 million as his share of the profit from the 2005 contract, plus an unspecified amount of profit from the 2007 contract.

The IOTC representative who spoke on condition of anonymity denied Al Saleh’s allegations. He says Al Saleh knew that Sargeant and Abu-Naba’a were running the contracts through a different company and had agreed to the arrangement.

Sargeant has been politically active in Florida, chiefly as a supporter of Gov. Charlie Crist. He is finance chairman of the Republican Party of Florida. In March he hosted a $2,300-a-seat fundraiser for Sen. John McCain in Florida, according to the Palm Beach Post.

McCain's office declined to comment.

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