• Boeing such a deal
Boeing such a deal
The KC-135 aerial tanker is a flying fossil from the era of Elvis. The average age of the planes in the Air Force fleet is 42 years. They’ll have to be replaced over the next few years, and Boeing is the logical choice to build the replacements.
That said, Deputy Secretary of Defense Paul Wolfowitz was right to declare a “pause” in the tanker contract while the Pentagon investigates the outrageous goings-on at Boeing.
Boeing’s chief financial officer, Michael Sears, dangled a job in front of a high ranking Air Force procurement officer, Darleen Druyun, at a time when she could influence the $21 billion tanker deal. Boeing subsequently hired her last January.
When that scandal came to light, it cost Mr. Sears and Ms. Druyun their jobs, as well as that of Boeing chief executive Phil Condit. The obvious question is whether Boeing got a sweetheart deal by promising a job to an Air Force official.
The tanker deal was a little squirrelly to begin with. Although its tanker fleet is aging, the Air Force hadn’t planned on replacing it right away. Then Boeing walked in with a unique proposal. The Air Force could get 100 new tankers based on Boeing’s 767 airliners. But instead of buying them, the Pentagon could lease them. The lease payments would be tame at first, which would help the Air Force ease its budget through Congress. But over the life of the lease, the taxpayers would pay perhaps $5.7 billion more than if the government bought the planes outright.
That huge number prompted howls from members of Congress who smelled a back-door bailout of Boeing’s lagging commercial airline division. After a major round of horse trading, Congress approved a deal to buy 80 planes and lease 20. That deal is now on hold. Last week, Sen. Jim Talent, R-Mo., urged the Pentagon to “move forward and implement the compromise reached by the Congress,” adding that the Boeing 767 is the only aircraft that can meet the needs of the Air Force.
Darleen Druyun helped negotiate the deal for the Air Force and later took a job heading Boeing’s missile unit in St. Louis. Republican Sens. Peter Fitzgerald of Illinois and John McCain of Arizona produced e-mails between Boeing officials in which they seem happy with Ms. Druyun’s stance in negotiations. “Darleen will make the actual contract favorable and is willing to go to the financial market with us to stress the low risk in such a lease,” said one e-mail from 2001.
That’s hardly a smoking gun. And Ms. Druyun had a reputation as a “dragon lady” in bargaining, says Steven Schooner, co-director of the Government Procurement Law Program at George Washington University. Boeing may well have wanted a tough female negotiator in its management. But even if Boeing’s motives were pure, the timing of the job discussion violated procurement rules. It was also profoundly dumb, given the appearance of shenanigans.
It’s time to clear the air. The Pentagon’s inspector general should take all the time he needs to investigate. If the deal was dirty, then Boeing should pay a stiff financial penalty and be forced to implement internal reforms.
That said, the Air Force still needs tankers, and Boeing, as Mr. Talent says, has the right airplane.
Boeing’s competition for the deal was from Airbus, a European consortium. American taxpayers aren’t about to send $21 billion and a couple of thousand jobs off to Europe.
St. Louis Post-Dispatch
