Sen. Mel Martinez's office repeatedly intervened in a 2007 legal dispute between the Defense Department and a company owned by a top Republican fundraiser who is now at the center of a campaign-finance investigation, according to records obtained by The Miami Herald.

In a series of phone calls and e-mails, a Martinez aide urged Pentagon contract officers to seek a ``fair resolution'' to $14 million in contract claims sought by the International Oil Trading Co., a fuel-supply company co-owned by Harry Sargeant III of Boca Raton.

At one point, Pentagon officials told the senator's office it was ``not appropriate'' to discuss any settlements while the company's lawsuit was pending in court, records show.

As Martinez's staffer was lobbying the Pentagon, Sargeant and his wife donated $50,000 to the Republican National Committee -- then headed by Martinez. At the time, Sargeant was the finance chairman of the Republican Party of Florida.

Martinez, who will step down from his Senate seat next week, did not respond to several interview requests made through his press secretary.

In the past, he has said the RNC donations were unrelated to Sargeant's contract dispute.

Sargeant's company ultimately received $3.2 million from the Defense Department -- settling claims the Pentagon had initially denied entirely. The Pentagon says Martinez played no role in the settlement.

EMPLOYEE INDICTED

Sargeant gained notoriety last year as a fundraiser for Republican presidential candidate John McCain, whose campaign returned $50,000 in suspicious donations solicited by a Sargeant business partner. In February, an employee of a Sargeant company was indicted on federal charges of funneling illegal contributions to several candidates, including McCain and Florida Gov. Charlie Crist -- a college buddy of Sargeant's.

The employee, Ala'a al-Ali, is accused of using straw donors in California to steer about $55,000 in illegal contributions to candidates.

Ali, who worked for a Sargeant shipping company in the Dominican Republic, later repaid the donors, avoiding contribution limits, the indictment says.

A month before the indictment, Sargeant stepped down from his role with the Florida GOP. He did not respond to requests for comment.

Sargeant first sought help from Martinez -- a member of the Armed Services Committee -- in 2006, dispatching lobbyist and former Bush administration official Otto Reich to the senator's office after the Defense Department initially denied IOTC's claims for alleged contract violations.

IOTC is one of the top fuel suppliers to American forces in Iraq, earning more than $1.4 billion, records show. Following a congressional inquiry last year, U.S. Rep. Henry Waxman, D-Calif., accused Sargeant's company of ``war profiteering'' and asked the Pentagon to investigate IOTC's contracts.

In an interview with The Miami Herald last year, Martinez said he offered only ``routine'' assistance to Sargeant's company. He said his office helped IOTC obtain information, but he did not try to sway the Pentagon's stance in the case.

``I do this for hundreds of people throughout the state of Florida,'' Martinez said last year.

But the e-mails -- obtained through a request under the Freedom of Information Act -- indicate that Martinez's office was more actively involved in the contract dispute than the senator has publicly acknowledged.

In a May 3, 2007, e-mail to a Pentagon official, Martinez aide John Goetchius said the senator ``wants to raise the level of attention in hope of expediting a fair resolution of these claims.''

A month earlier, Sargeant's company had filed a lawsuit in the U.S. Court of Federal Claims, seeking $10.1 million for contract violations -- claims the Pentagon had previously denied.

In another e-mail, dated April 19, 2007, Goetchius -- an expert on military and foreign affairs -- asked how the company's claims could be settled quickly. ``Is there precedent for doing a batch resolution and rounding the numbers up or down and saving time?'' he asked.

Goetchius also transmitted questions from IOTC to the Pentagon, and parroted the company's legal arguments, the records show.

``IOTC still wants to avoid costly, time-consuming litigation,'' the senator's aide wrote in one message to the Pentagon. ``If IOTC had known what to expect, IOTC would have considered bidding at a higher price.''

CAUTIOUS RESPONSE

Contract officers at the Defense Department responded carefully to Goetchius' queries. On two occasions, Pentagon aides refused to discuss details or a potential settlement with Martinez's aide, saying it was ``not appropriate'' to do so while IOTC's claims were pending in court, the e-mail records show.

``I just spoke to John Goetchius,'' one Pentagon staffer wrote to a colleague. ``He wants to avoid the perception of undue influence, but would like to sent [sic] the message that the parties should consider a settlement resolution.''

In September 2007, the Pentagon agreed to pay $3.2 million to settle two of IOTC's contract claims. The Pentagon agreed to the deal after IOTC provided more information to back up its damages claims, said Dennis Gauci, a Defense Department spokesman.

``It is not unusual for members of Congress or their staffs to inquire about issues involving their constituents,'' Gauci said. ``However, neither Senator Martinez nor any member of his staff was ever involved in the resolution process or settlement.''

IOTC also made a third claim demanding $3.8 million to cover the costs of fuel trucks destroyed or abandoned in combat. A military appeals board ruled last year that the Pentagon was not responsible for those losses. IOTC has not taken that claim to court.

Sargeant's company won two more Pentagon fuel contracts, earning a combined profit of $210 million through last year -- and drawing the scrutiny of congressional investigators, who concluded the company charged unreasonably high prices.

The company deploys a fleet of about 300 tankers shipping oil and fuel from Saudia Arabia to Jordan, where the fuel is trucked by convoy to Iraq. IOTC and a subsidiary won approval from the Jordanian government to ship across that country -- a specific requirement of the U.S. military.

Because of the company's agreement with Jordan, the Defense Department awarded the lucrative shipping contracts to IOTC even though its bid prices were more than 30 percent higher than its competitors' prices, congressional investigators found.

A rival contractor filed a federal lawsuit last year accusing IOTC of racketeering, saying the company made payoffs to the Jordanian government to effectively shut out competitors.

In court papers, lawyers for IOTC have called its competitor's claims ``slanderous,'' and said the lawsuit ``mischaracterizes legitimate payments made to the Jordanian government as bribes.''