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Sherman Calls on Department of Energy to Review Contract Awarded to Vitol

Press Release

Location: Washington, DC

Sherman Calls on Department of Energy to Review Contract Awarded to Vitol

Firm Pled Guilty to Criminal Act in Oil-for-Food Scandal

Last Friday, Congressman Brad Sherman and a group of colleagues sent a letter to Energy Secretary Steven Chu, requesting that he have the Department review a January, 2009 contract awarded to the energy firm Vitol to provide oil for the Strategic Petroleum Reserve. Vitol pled guilty to grand larceny in New York state court in November, 2007 in connection with the Oil-for-Food program.

Past criminal activity can be grounds for barring a firm from receiving federal contracting, an act known as "debarment." Sherman's letter calls on the Energy Department to determine whether Vitol should be barred from future contracting with the federal government, and whether the current contract should be terminated.

Specifically, Vitol pled guilty to paying kickbacks of $13 million to the Iraqi government, then under U.N. sanctions, effectively stealing from the United Nations and the Iraqi people.

"This contract, which was awarded by the previous Administration, should be reviewed to ensure that Vitol's criminal activity was made known to Energy Department officials and adequately reviewed during the contracting process," Sherman said. "If Vitol withheld information about this Oil-for-Food guilty plea, the Energy Department should probably debar the firm and possibly cancel existing contracts."

"Paying kickbacks to Saddam's Iraq goes beyond mere corruption - it is sanctions-busting activity in violation of U.S. and international law. It requires that the U.S. government seriously consider whether we should be doing business with this firm."

Sherman's letter also notes that Vitol is a major supplier of refined petroleum to Iran. Tehran, although oil-rich, must purchase as much as half of its refined petroleum from abroad. The letter was cosigned by Howard Berman (D-CA), Ileana Ros-Lehtinen (R-FL), Robert Andrews (D-NJ), Mark Kirk (R-IL), Edward Royce (R-CA), and Robert Wexler (D-FL). Sherman and others believe that firms which provide this vital fuel should be discouraged from doing so until the ongoing efforts to convince Iran to abandon its nuclear weapons program are successful.

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