Costly aircraft lease stirs ire in Congress

Air Force says deal for in-flight refuelers makes sense. Critics see $5.7 billion giveaway to Boeing.

Critics call it the "iron triangle" - the powerful combination of defense officials, industry lobbyists, and lawmakers. Together, they're able to push through laws and budget items to their mutual benefit. Often the nation is more secure as a result. But sometimes the means mainly justify ends measured in billions of dollars in business, campaign contributions, and election results.

The flap in Washington this week over the Boeing Company may be a classic case.

At issue is a replacement for the Air Force's aging KC-135 aerial tankers, those gas stations in the sky that enable bombers and fighters to attack targets halfway around the world (Afghanistan, for example) and return home without having to land.

A lease ... and a loss?

Boeing and the Air Force are pushing a deal to convert 100 of the aircraft company's 767-model airliners into tankers. The controversy starts with an agreement to lease - rather than buy - the big jets. This puts less of an initial dent in the Air Force budget, and it gets newer tankers into the fleet sooner. Also, Air Force officials figure buying the planes outright would save only $150 million over the life of the lease - spare change at the Pentagon.

But according to studies by the General Accounting Office, the Congressional Budget Office and the Congressional Research Service, if the Air Force buys the tankers at the end of the six-year lease (which very likely would happen), the added cost of leasing instead of buying pencils out to at least $5.7 billion. Even in Washington, that's real money.

The Air Force and Boeing dispute those figures, and they argue that the newer KC-767 could carry more fuel, troops, or cargo over longer distances than the older KC-135.

"I believe this is a good deal for the Air Force and the US government," John Sams, Boeing's program manager for the new tanker proposal, told a Senate Commerce Committee hearing this week. It's also "fair and equitable to the taxpayer," Mr. Sams said.

Private government watchdog groups, such as the Project on Government Oversight, Common Cause, and Taxpayers for Common Sense, have been highly critical of the proposed deal.

Critics see too-cozy relationship

So too has Senator John McCain (R) of Arizona, no slouch on national defense but also a key congressional targeter of budgetary pork. Over the weekend, Senator McCain released thousands of e-mails and other communications between Boeing and the Air Force documenting what he says amounts to inappropriate coziness in putting together an expensive deal that may not serve the best defense interests of the country.

"In all my years in Congress, I have never seen the security and fiduciary responsibilities of the federal government quite so nakedly subordinated to the interests of one defense manufacturer," says Senator McCain.

In particular, McCain and others want to know whether a senior Air Force civilian shared proprietary information about another aircraft manufacturer with Boeing. Both the Air Force and Boeing deny that. But the official - Darleen Druyun, former principal deputy assistant secretary of the Air Force for acquisition and management - has since gone to work for Boeing.

The Pentagon's inspector general this week began a formal investigation of the charge. Whether or not wrongdoing is confirmed, the appearance is one of inappropriate behavior at the expense of taxpayers. "As you read the recent stories detailing the efforts to seal this $30 billion deal, it becomes increasingly hard to figure out where the blue Air Force uniform ends and the pin stripe of Boeing executives begins," says Steve Ellis, vice president of Taxpayers for Common Sense, a nonprofit, nonpartisan group in Washington. "In effect, the Air Force officials became the silent business partners of Boeing."

Sen. Ted Stevens (R) of Alaska says the arrangement is needed because it would take 30 years to replace aging KC-135 tankers by purchasing them outright. He rejected claims by critics who say he was swayed by campaign donations from Boeing. "I challenge anyone about any backroom dealing, or anything else," he said, according to an Associated Press report.

Key jobs for Washington State

The controversy does not break down along party lines. Several Republicans have joined McCain in questioning the deal. But many Boeing supporters are Democrats - especially those from Washington State, where the 767 is built.

Washington State has one of the highest unemployment rates in the country, and Boeing has been hard hit by a sluggish economy and the drop in air travel that followed the terrorist attacks of Sept. 11, 2001. The war in Afghanistan and Iraq has highlighted the need for aerial tankers as well.

"Put simply, without a modern tanker fleet, our nation's air power could be crippled," says Senator Maria Cantwell (D) of Washington. "If we do not replace these aircraft now, we are facing skyrocketing maintenance and modification costs."

For many others, the question is: Should new tankers be acquired in a way that may add substantially to the cost?

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