US DOE should review Vitol SPR contract-lawmakers

WASHINGTON, March 2 (Reuters) - The U.S. Energy Department should consider canceling energy trading firm Vitol's contract to supply oil for the Strategic Petroleum Reserve because of past criminal activity by the company, U.S. lawmakers said in a letter sent to the Energy Secretary late last week.

The lawmakers said the department should review a January deal to buy oil from Vitol for the SPR and evaluate barring the company from future contracting with the federal government due to the company's involvement in the Iraq oil-for-food scandal.

Vitol pleaded guilty to grand larceny in November 2007 for paying $13 million in kickbacks to the Iraqi government, then ruled by Saddam Hussein and under United Nations sanctions.

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

Sherman and the other lawmakers who signed the letter also voiced concern that Vitol is a major trading partner and supplier of refined petroleum to Iran.

"While this is not grounds for denying a contracting opportunity under current law, it further demonstrates that this firm may not be the best business partner for the United States government," the letter said. (Reporting by Ayesha Rascoe; Editing by Christian Wiessner)