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This article was Originally Published on Mar 16, 2005 in Volume: 4  Issue: 1

View From the Hill

Where is the honesty and honor in Air Force leadership’s conduct regarding the tanker lease proposal and related congressional probes?

By Senator John McCain, R-AZ

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Three years ago, behind closed doors, appropriators slipped a $30 billion rider in the fiscal 2002 defense appropriations bill. This rider authorized the Air Force to lease from Boeing up to 100 767s for use as aerial refueling tankers. Before the rider appeared in the bill, Air Force leadership never came to the authorizing committees about it. In fact, tankers have never come up in either the president’s budget or the Department of Defense’s unfunded priority list. The Air Force’s tanker lease program was borne of a virgin birth.

The rider was in fact the result of an aggressive behind-the-scenes effort by Boeing, with considerable assistance from senior Air Force procurement official Darleen Druyun and others. After the president signed that bill into law, the Air Force embarked on negotiating with Boeing on a lease that would have cost taxpayers about $6 billion more than buying them would have.

Soon after, then-Air Force Secretary Jim Roche submitted to the four defense committees a report on plans to lease these tankers from Boeing, three out of the four summarily approved the lease—without even looking at the contract. Two did so without even holding a single hearing. Much to his credit, Senate Armed Services Committee Chairman John Warner held the line and refused to authorize the proposal. Through the hearings and investigations that followed, we unearthed a crushing body of evidence on how much a folly the proposal actually was.

Throughout 2002 and the beginning of 2003, even agencies within DoD and the Air Force, including Program, Analysis and Evaluation, the Office of Management and Budget, and even the Air Force’s own General Counsel’s Office, raised salient concerns about aspects of the proposal. These concerns, however, would not get in the way of Air Force leadership. Rather than resolve these concerns, Air Force proponents continued to aggressively push the deal in the press. A Wall Street Journal editorial, entitled “John McCain’s Flying Circus,” published on the very same day as my tanker hearing in the Commerce Committee, is particularly notable. It was obviously drafted with considerable help from the Office of the Air Force Secretary. In it, tanker proponents accused me of “trying to prevent approval by running up my own ‘Jolly Roger’” and brazenly exaggerated the Air Force’s need for tankers by describing how, during Secretary Roche’s visit to Tinker Air Force Base, he “peeled back the skin of a tanker being refurbished and found the metal underneath disintegrating before his very eyes.”

Press Campaign

By this time, Air Force leadership’s aggressive press campaign was well underway. On April 25, 2002, Roche special assistant William Bodie told Roche that he “saw Rudy deLeon [who heads Boeing’s Washington Office] at the Kennedy Center and politely asked the Great White Arab Tribe of the North [which is what these folks called Boeing] to unleash their falcons on our behalf for once. And, I talked to [defense analyst] Loren [Thompson], who is standing by to comment to this reporter about the national security imperatives of tanker modernization. [Editor of Defense News and Air Force Times] Vago [Muradian] is also standing by. I will get with [Assistant Air Force Secretary for Acquisitions Marvin] Sambur first thing to rehearse talking points. We will get with you before we talk to the reporter.”

Among the falcons that Boeing “unleashed” was an op-ed that subsequently appeared in Vago Muradian’s Defense News. This piece, which strongly endorsed Boeing’s tanker lease, was supposedly written by former Commander-in-Chief for U.S. Pacific Fleet, Admiral Archie Clemins. However, Clemins has admitted, and Boeing’s e-mails reflect, that it was, in fact, ghostwritten and placed by Boeing.

As this indicates, rather than address salient concerns regarding the tanker deal raised by their own staff, Air Force leadership focused on using the press, which Bodie described as “3rd party support at its best” to perpetuate the fiction that “the lease was the exact opposite of a Boeing ‘bailout.’” Among the spin that lease advocates fed the press were statements like, “[McCain] will not succeed in blocking a 767 lease because tanker replacement is critical and [McCain has] offered no alternatives to leasing.”

While Air Force leadership was focused on pushing the deal in the press, analyses from several independent bodies, including the DoD Office of the Inspector General, Government Accountability Office, Congressional Budget Office, Congressional Research Service, National Defense University, Center for Naval Analysis, Institute for Defense Analyses and others criticized almost every aspect of the program. Perhaps most notably, a Defense Science Board Task Force, vetted for conflicts with industry only after my insistence, concluded that the need to replace the current tanker fleet was not urgent. The Task Force’s finding debunked the numerous representations Air Force leadership made to the contrary. Indeed, the Defense Science Board suggested that the Air Force’s case on corrosion was virtually cut from whole cloth. Air Force leadership repeatedly cited this case as the biggest reason for having taxpayers pay Boeing billions more than necessary.

A few months ago, Druyun was sentenced to nine months in prison on public corruption charges. Her crime: negotiating the $30 billion deal with Boeing while negotiating with Boeing for a job. Druyun’s sentencing occurred months after Boeing’s board of directors fired her and former Chief Financial Officer Michael Sears for misconduct arising from the tanker negotiations. Boeing’s Chief Executive Officer Phil Condit soon left the company under a cloud of suspicion.

In court papers accompanying her sentencing, Druyun admitted to overpricing Boeing’s 767s as a parting gift to Boeing. She admitted that she did this to ingratiate herself with her future employer and help secure employment for her daughter and future son-in-law at the company. Astonishingly, Druyun also admitted that she similarly harmed the United States on behalf of Boeing on several other major defense programs, including the NATO AWACS, C-130 AMP and the C-17 programs. How much taxpayers were fleeced remains unclear. But this matter remains under investigation by the Justice Department and other authorities. The scope of these investigations seems to widen almost weekly. Ultimately, it is likely that Druyun’s misconduct cost taxpayers an astronomical sum.

Systemic Failure

Over the past few weeks, Air Force leadership has tried to delude the American people into believing that all of this happened because of one person, and that because no one else has been hired for her position, the problem has been solved. I don’t buy it. I simply cannot believe that one person, acting alone, can rip off taxpayers out of possibly billions of dollars. This appears to be a case of either a systemic failure in procurement oversight, willful blindness or rank corruption. Either way, full accountability among Air Force leadership is in order.

Roche and Druyun’s old boss, former Assistant Secretary of the Air Force for Acquisitions Marvin Sambur, have resigned. But, among Air Force leadership, no one has assumed responsibility for this debacle. Druyun is, perhaps grudgingly, accepting responsibility for her role. To some extent, Boeing has accepted responsibility for its. The Justice Department and others are continuing to ferret out others who may be responsible. However, accountability among Air Force leadership has been inadequate. It seems that it is business as usual. Air Force leadership remains content laying all the blame at the feet of a single individual, Darleen Druyun. I’m not buying it.

Just on the tanker lease proposal, the conduct of Air Force leadership has been unacceptable. First, Air Force leadership was never interested in doing a formal analysis of alternatives (AOA) for the multi-billion dollar tanker program. Such AOAs are typically always done for major defense programs.

Second, Air Force leadership misrepresented to Congress how bad corrosion afflicted the current tanker fleet. They did this to devise a reason why taxpayers needed to lease new tankers from Boeing, rather than simply buy them at a much lower cost.

Third, according to independent analyses, Air Force leadership overstated operation and supply cost-growth estimates for the current tanker fleet. This too was done to artificially bolster the case that the current fleet needed to be replaced immediately, at a dramatically higher cost.

Fourth, Air Force leadership repeatedly misrepresented that its proposal was merely an operating lease. Their plan was to slip the program in the budget at a relatively modest initial cost, only to have actual costs balloon in the out-years. We now know that this was done to conceal the tanker lease proposal’s real budgetary impact.

Fifth, according to the DoD inspector general, the commercial procurement strategy that Air Force leadership used in the tanker proposal (and, incidentally, the C-130J program) placed the department at high risk for paying excessive prices, and precluded good fiduciary responsibility for DoD funds.

Sixth, the inspector general found that, when the specifications for the tanker were being developed, Air Force leadership let Boeing tailor those specifications to Boeing’s proposed tanker. They were not tailored to the operational requirements of the warfighter. They should have been. Yet, Air Force leadership allowed an Air Force briefer to tell the Joint Staff that the tanker operational requirements document was not tailored to Boeing’s aircraft. The DoD inspector general, however, found that it was.

One thing is for sure: The final chapter on the tanker lease proposal cannot be closed until all the stewards of taxpayers funds who committed wrongdoing are held accountable. In order to get a full accounting of what happened on the tanker lease proposal, I will continue to insist that all the documents that the Senate Armed Services Committee has asked for be produced—no matter how long it takes.

Senator John McCain, R-AZ, is chairman of the Senate Commerce Committee and a member of the Senate Armed Services Committee. This was excerpted from a speech on the Senate floor.

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