09 March 2008

Bogus Charges Fly Against McCain

In the last few days, Democrat and Republican lawmakers have jumped on the decision to buy future air-to-air refueling aircraft from Northrop Grumman and EADS. They say that Senator McCain is behind the decision to not award the contract to Boeing, with the net result, they claim, of “outsourcing” American defense industry jobs to Europe. While the latter part will, to some extent, be true (60% of the aircraft is reported to be made in the US), there are other considerations in play here.

First, it cannot and should not be ignored that in the not so distant past, Boeing, along with help from an Air Force person who later worked for Boeing, attempted to lease the Air Force refueling jets at an inflated price. To boot, the Air Force would have to pay more to buy the jets at the end of the lease. According to a report from the Seattle Post-Intelligencer from September 2003:

McCain cited one estimate provided to the Air Force by an independent consulting firm that concluded that the price of each plane should be between $59 million and $95 million. Under the lease, the Air Force agreed to pay Boeing $131 million for each plane. That number jumps to $161 million per plane when interest costs are added along with the cost of buying the planes at the end of the six-year lease.

From the point of view of someone who was in the Air Force at the time, it seemed like a bad deal back then, too. Leasing warplanes is just counterintuitive. The idea that it would save money also made little sense as, at the same time, money was being poured into the F-22 and Joint Strike Fighter (JSF) programs with diminishing returns (on what was promised and on numbers of aircraft – if I remember correctly). In the final analysis, it appeared to me that the lease was a way to not spend money on the un-sexy need of tankers in order to fund sexy fighter programs – regardless of the old saying, “You can’t kick ass without tanker gas.”

In the end, Boeing got a new CEO over the deal and some folks went to prison over the deal. There’s little doubt that the lease deal was improper, underhanded, and just plain bad on many levels. Just because it happened some time ago doesn’t make it important.

Second, it is highly suspect that anyone would jump on this subject at this time. The only reason they’re doing this is because Senator McCain is the Republican nominee. They (Speaker Pelosi and DC Republicans and Democrats alike) appear to have wanted a closed tender deal with Boeing instead of competing the contract in order to get the best jet at the most competitive price. One wonders if, had Boeing been given the contract out-of-hand, there would be calls for investigation and accusations of kowtowing to the industrial-military complex thrown at the Bush administration. Those calling for an investigation (besides Speaker Pelosi) might have been different, the target would have been different, but the whole situation would smell the same.

So, with that in mind, here’s my counter-charge to those badmouthing Senator McCain’s past – and proper – scrutiny of Boeing: would you, oh lofty lawmakers, have the US military beholden to companies based on the special interests of your specific electoral geography? Must the men and women who protect this country do so only with equipment built in your specific electoral geography? It is accurate to say that this conflict of interest – awarding defense contracts based on job creation and geography – would be more damaging than anything Senator McCain has done, past or present, regarding the Air Force tanker procurement contract.

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