Tuesday, June 07, 2005

Boeing "Bailout" - White House Role?

There hasn't been much news about the infamous Boeing tanker lease story since I started blogging back in March, so I hadn't mentioned it, but thankfully the Washington Post offers an update today, in grand style.

In a $30 billion proposal put forth back in 2002, the Air Force suggested leasing military refueling tanker planes (converted Boeing 767 passenger jets) from Boeing, rather than buying the planes outright (at what would have been a significant savings). As R. Jeffrey Smith notes in the Post article today, the Air Force has publicly described the leasing plan as "an efficient way to obtain aircraft the military urgently needs."

But not so fast, says the inspector general of the Air Force, in a new report to be released today at a hearing of the Senate Armed Services Committee. In a 256-page summary of the affair, the inspector general "conclude[s] that four top Air Force officials and one of Defense Secretary Donald H. Rumsfeld's former top aides, Undersecretary of Defense Edward C. 'Pete' Aldridge, violated Pentagon and government-wide procurement rules, failed to use 'best business practices,' ignored a legal requirement for weapons testing and failed to ensure that the tankers would meet the military's requirements."

And if that weren't enough, the report also includes transcripts of emails back and forth between Air Force and Boeing officials, as well as between Air Force procurers. In one such, an officer in the Pentagon comptroller's officer said of the plan "We all know that this is a bailout for Boeing," and suggested that the Air Force just buy the planes and not "screw the taxpayer in the process."

The hearing of the Armed Services Committee today ought to be very interesting. Senators Warner, Levin, and McCain have all strongly criticized the proposed lease as "one of the most significant military contracting abuses in several decades," according to the Post, and this report is unlikely to make them very happy campers. As well it shouldn't.

As Slate's "Today's Papers" notes of this story, the most interesting paragraph in the whole thing is the fourteenth: "In the copy of the report obtained by The Washington Post, 45 sections were deleted by the White House counsel's office to obscure what several sources described as references to White House involvement in the lease negotiations and its interaction with Boeing. The Pentagon separately blacked out 64 names and many e-mails. It also omitted the names of members of Congress, including some who pressured the Pentagon to back the deal."

If the unredacted version is made public, we may have an even bigger story on our hands. And if it's not, Senators McCain, Warner and Levin ought to demand it.

Thankfully Congress ultimately scuttled the lease plan, and two of those involved - former Air Force principal deputy assistant secretary Darlene A. Druyun, and a senior Boeing official, Michael M. Sears - have received prison time for their roles in the scandal. Additionally, Pentagon officials "have noted that the department is now conducting special oversight of Air Force weapons-buying, in part because of the problems with the Boeing deal," Smith writes. This report is an important finding, and its fallout will be most interesting. I don't know if I'll be able to tune into the hearing today, but I'll do my best to keep up with this story.


At 10:50 AM, Blogger EG said...

We may never know if the White House had anything to do with the Boeing bailout. However, we should not lose sight of who the biggest potential winners are in these programs: retired military officers and civilians.

For the past thirty years, DoD and Congress has attempted to stop the military-contractor revolving door. The current legislation requires a retired government employee not to work for the private contractor on the same program after three years of service. That doesn't stop the pro bono aspects of the government employees getting a contract for contractor X and working for contractor X as a consultant, lending his name/creditials for subsequent bids.

Chaney as Secretary of Defense, Halliburton CEO, Vice President and Halliburton's no-bid contracts are typical of this activity.


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