McCain Intentionally Cost Boeing the Air Force Tanker Deal and sealed it for Europe's Airbus

[stevenleser]

http://www.opednews.com/articles/opedne_steven_l_080323_mccain_intentionally.htm
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March 23, 2008

By Steven Leser


An examination of the links of Senator and presumptive Republican nominee for President John McCain and his campaign staff to the debacle where Europe's Airbus won a bid for an Air Force tanker project over Boeing produces some startling conclusions. The interference by McCain and key McCain for President staff cost Boeing the contract.


At a time when our economy is in a tailspin, unemployment is edging higher and the dollar is getting beaten up by the Euro, the loss of this contract to EADS/Airbus will be a severe blow to the US in general and the state of Washington in particular. According to an April 2007 article in the Seattle Post Intelligencer 'At the time Boeing submitted its bid, a Boeing executive said "The tanker program would support about 9,000 jobs in Washington State and contribute about $400 million a year to the state's economy. The job numbers include Boeing 767 commercial airplane workers in Everett as well as jobs with 767 suppliers in Washington."' Ultimately, the contract will provide an estimated $20-$40 Billion dollars to the company and economy that lands it.

Senator McCain is the ranking Republican member of the Senate Armed Services Committee so he was in a position to put pressure on the individual deciding to whom to award the contract. As described by Wikipedia, the Senate Armed Services Committee is "empowered with legislative oversight of the nation's military, including the Department of Defense, military research and development, nuclear energy (as pertaining to national security), benefits for members of the military, the Selective Service System and other matters related to defense policy... Considered one of the most powerful Senate committees, its broad mandate allowed it to report some of the most extensive and revolutionary legislation during the Cold War years, including the National Security Act of 1947." The committee's own website describes it as having jurisdiction over "the development of weapons systems or military operations ... pay, promotion, retirement, and other benefits and privileges of members of the Armed Forces, including overseas education of civilian and military dependents"


Department of Defense personnel ignore or thwart the desires of the members of the Senate Armed Services Committee at their peril. Thus, when Senator McCain sent this September 2006 letter http://www.ifpte.org/Downloads/Archives/In%20the%20News/McCainTanker/McCain_to_England_2006.pdf to the Deputy Secretary of Defense, it resulted in a number of things happening. First, McCain successfully obtained the removal from the RFP of a fairness clause with regard to international trade. EADS/Airbus is known to have a significant amount of financial support and subsidies from several EU member countries. That puts EADS/Airbus at an unfair advantage versus its competitors like Boeing. This issue of unfair advantages for EADS/Airbus is already the subject of WTO (World Trade Organization) litigation regarding competition for commercial aircraft contracts. Second, the attention from a senior member of the Senate Armed Services Committee and their apparent desire to remove an obstacle to EADS/Airbus obtaining the contract had to suggest to DOD and Air Force procurement personnel that there was a possibility that McCain had an interest in seeing EADS/Airbus obtain the contract. This suggestion would be strengthened later as I will explain. However, getting back to McCain's letter of September 2006, he shows concern that the Air Force get the best planes, which is admirable, but he does not also show concern that an American firm have a level playing field in developing and obtaining a huge contract for supplying those planes.


This above letter by itself could be forgiven. But Senator McCain sent a second letter three months later that almost certainly made it clear what he wanted. The letter http://www.ifpte.org/Downloads/Archives/In%20the%20News/McCainTanker/McCain_GatesLtr.pdf criticized the Tanker RFP for "including an overly restrictive invocation of the Berry Amendment and a questionable extension of ITAR regulations" The Berry Amendment, according to this entry in Wikipedia http://en.wikipedia.org/wiki/Berry_Amendment "requires the Department of Defense to give preference in procurement to domestically produced, manufactured, or home grown products". ITAR or International Traffic in Arms Regulations are "a set of United States government regulations that control the export and import of defense-related articles and services" according to this Wiki http://en.wikipedia.org/wiki/ITAR .



EADS/Airbus has no less than four previous and one current Lobbyist working on the McCain for President Campaign. These lobbyists are not of the small time variety. As this page shows http://www.ifpte.org/Downloads/Archives/In%20the%20News/McCainTanker/McCainandAirbus.pdf :



Former Texas Rep. Tom Loeffler: lobbied for EADS while serving as McCain's National Finance Chairman. He is a former Republican member of the United States House of Representatives from central Texas. A key account he worked on for the Group was the Kingdom of Saudi Arabia.


Susan Nelson: left the Loeffler Group to become McCain's Campaign Finance Director. Previously she was the finance director of the Republican Governors Association. In the 1990s, Nelson served as finance services director for the National Republican Senatorial Committee.


John Green: was on the Ogilvy EADS lobbying team, took a leave of absence from the firm to volunteer as McCain's campaign congressional liaison. Green, a Mississippi native, has strong ties in the Senate after his years of work for former Senate Majority Leader Trent Lott (R-Miss.), a vocal McCain supporter who left Congress late last year to set up his own lobbying shop.


Wayne Berman: also a founding partner of Ogilvy, described on the company website: "one of Washington's quietly influential insiders on both domestic and foreign policy." He was formerly an Assistant Secretary of State under George H.W. Bush. He was a senior advisor to the Bush/Cheney transition in 2001, the vice presidential campaign director for Dole/Kemp and deputy director of the Republican National Convention in 1996, director of congressional relations during the Bush/Quayle campaign in 1988 and a deputy director of the Bush/Reagan transition team in 1981. He has served in a variety of fundraising capacities in every Republican presidential race since 1992.


His wife Lea is the current White House Social Secretary.


Charlie Black: Currently a principal at BKSH but is also working for the McCain campaign. BKSH is owned by Burson-Marsteller (whose CEO is Mark Penn). ThinkProgress recently reported on Sen. John McCain's (R-AZ) long friendship with Iraqi exile leader Ahmad Chalabi, who drummed up claims that Saddam Hussein had WMD and helped lead the United States into war. But Sen. McCain isn't the only one on his campaign with ties to Chalabi. Charlie Black serves as Sen. McCain's chief political adviser. He is also an uber-lobbyist, "chairman of one of Washington's lobbying powerhouses," BKSH and Associates.


It is impossible to imagine that these ties between the former and current EADS/Airbus lobbyists and McCain, the ranking member of the Senate Armed Services Committee did not heavily factor into the decision to award the tanker deal to Airbus. Former Rep. Tom Loeffler actually was McCain's National Finance Chairman at the same time he was lobbying for EADS. If you think that in his lobbying efforts he didn't mention his association with McCain, you don't understand the way the lobbying game is played in Washington.


This still isn't as bad as this gets. There are extensive contributions to the McCain campaign for President from the above various lobbying companies and from EADS/Airbus' US employees.


• Executives for the clients of Ogilvy Government Relations gave at least $271,000 for McCain's presidential bid.

• Loeffler Group client employees donated $118,500, according to a Washington Post analysis.

• BKSH clients' executives gave $24,000 to McCain's Campaign.

• EADS/Airbus employees have donated $12,600 to McCain's campaign.


By the way, when you read through all of the evidence of what happened with the awarding of this contract, it is clear that the Air Force Generals wanted an aircraft in the medium large category like what Boeing proposed with its 767 class of aircraft. This was specified in the RFP. So the fact that the contract was awarded to EADS/Airbus when they submitted their Airbus 330 which is a monster sized aircraft only leads more credence to the idea that something nefarious happened with the awarding of this contract to EADS/Airbus. If the RFP had called for an extremely large aircraft, Boeing would have proposed its larger 777 aircraft, not the 767.



So, we have letters from McCain that vigorously oppose items in the RFP that would try to penalize EADS/Airbus for having unfair governmental subsidies and letters where McCain opposes items in the RFP asserting existing US legislation and guidelines that give preference to US companies in awarding defense contracts. We have several lobbyist powerhouses from EADS/Airbus in the McCain campaign and we have massive contributions from those lobbyists and from EADS/Airbus employees to the McCain Campaign. Finally, we have a contract that was awarded to a company that proposed a larger, more expensive and less fuel efficient plane versus the company that proposed the specified size, and a more affordable and fuel efficient plane Those dots are not hard to connect and I feel confident in asserting that none of it was accidental. McCain, who tries to tout himself as being above earmarks and pork, has really pulled a whopper here. I don't know what has to happen to fix this, but the contract needs to be awarded to Boeing and a complete investigation initiated into how this all happened.

[bluestateguy]

1. I guess he isn't planning on carrying Washington in the fall

nt

[Diane R]

3. You're right...McCain has no chance her in the GE.

[stevenleser]

6. Washington is normally a swing state. It will be good if Obama can win it

without having to spend significant $ there.

[opihimoimoi]

2. McBush gonna get his ass kicked it for that one...

[upi402]

4. Can it possibly be real that he's out-polling both Obama and Hillary?

I know we are brainwashed and distracted by the propaganda mill (TV news), but SERIOUSLY!

[stevenleser]

5. With our two candidates kicking the snot out of each other, I believe the polls

the nomination was really decided several weeks ago but one candidate and her supporters refuse to accept it. Oh well.

[K-W]

24. It really doesnt matter who people say they will vote for in March. EOM

[Sen. Walter Sobchak]

7. I still don't have a problem with this,

Boeing should have been banned from the competition and far more people should have gone to prison. And America gets another widebody aircraft assembly facility.

If Boeing won this contract the message to corporate america would have been that there are no consequences for defrauding the government provided you have some assholes lined up to throw under the bus.

[stevenleser]

10. I would have had no problem if that was the case

but it wasnt. Boeing was not banned and a fair RFP should have been conducted. That was not what happened.

[MaryCeleste]

13. What makes you think it was not fair?

Given the prior issues with the new tanker program, there is no doubt in my mind that the acquisition process run by the USAF was clean and above board. Those people are not stupid. They knew going in it would be given the highest scrutiny and that no matter who won there would be screams and protests. They would have made sure everything was done by the numbers.

So far nothing is has come out that shows the process was rigged. Boeing's biggest gripe is the Gov ICE. Given the Frankenstein nature of the platform they proposed and the commercial data they supplied, that was foreseeable. Boeing failed to make their case there. It may well have been the deciding point.

Again, lets see what the GAO has to say before we start gnashing our teeth.

[Sen. Walter Sobchak]

15. no credible source disputes the process

And in light of the last fiasco you can be certain the competition was being conducted in such a way that it would stand up to any scruitiny.

The Boeing 767 Tanker has not won a single competition against the KC30 anywhere on earth, why should have won this one?

And with Boeing seemingly incapable of building their 787 the American Airbus A330 factory could be getting very busy as the one in Toulouse is sold out for years.

The only people getting outsourced here are the French as a factory that would have otherwise been built in France or Germany is being built in the US.

[MaryCeleste]

8. The article is so clueless its hard to know where to start

- NGC, not EADS won the competition, with a 60% domestic bid
- He is all wrong on the requirements
- No mention of the acquisition and review process
- He completely misconstrues the Berry Amendment

Bottom line is that GAO is doing an independent review. Intelligent people will wait to see what it says.

[stevenleser]

11. Oh sure, its a 60% domestic bid with a foreign designed aircraft

The slight of hand in international contract bidding that has a Domestic company essentially as a front for a foreign bid happens all the time. But it is still a foreign company winning the contract. And no, I am not wrong on the requirements. If you are familiar with what happened, at the last minute, there was arm twisting that caused a change to the RFP that made the Airbus 330 appear more attractive but this is completely against what the Air Force Generals wanted for their mission requirements. I didnt bother to go into this because it wasnt necessary. It is beating a dead horse. This last minute change to the RFP did not allow Boeing the opportunity to alter their bid to propose the 777.

And if I misconstrued the Berry Amendment, why did McCain want to have it stricken from the RFP? The reality is, the Berry Amendment has been construed by the Aerospace industry as having a serious restriction on the use of non-domestic components in Aircraft and other Aerospace deliverables. https://www.aia-aerospace.org/pdf/berry_infosheet.pdf . This would have been a real problem for EADS in construction of the 330 for the Air Force. I think the Berry Amendment should be adhered to in its strictest interpretation for all bids. I want American companies with American workers to receive the benefits from DOD contracts.

[MaryCeleste]

12. The change in the draft RFP were far from last minute

The 777 could never have made MTOW and Balanced Runway Requirements
Berry Amendment is being waived all over the DoD right now, especially in regards to metals. For 5 points, tell us why.
If the 330 did not meet mission requirements, it would not have been the winning platform
The 767 being proposed is actually a hybrid of several variants, and has never flown, the Airbus practically unchanged
The last Boeing 767 hybrid had issues that were not found until test flights
60% domestic is achievable when you consider engines and systems. You are aware NGC is using US engines?

Given Boeing's prior bad acts, the Druyan meltdown, and the prior taxpayer screwing on the proposed leasing, this procurement would have been as clean as possible from the acquisition viewpoint. Lets all wait until the GAO report comes out before leaping to conclusions.

[stevenleser]

18. The term "Last Minute" is relative, is it not?

When your response to an RFP is 7000 pages with hundreds of pages of diagrams and charts, as was Boeing's response to the Tanker RFP, "Last Minute" can mean several months. If someone wants me to add a comma to a page, "Last Minute" can mean 30 seconds. Boeing had less than six weeks to completely revamp its response to the RFP in the face of changes made that can only be described as having the express purpose of accomodating EADS/Airbus and its Airbus 330 offering http://www.flightglobal.com/articles/2006/12/12/211044/usaf-issues-fairer-tanker-rfp.html

Of course, since the revamping of the RFP was made to specifically accomodate the Airbus 330, EADS/Airbus didnt have to do anything in those six weeks so we dont know if they would have been able to alter their response in time.

Nice try with your vague "It wasn't last minute" but it doesn't wash. From the moment McCain got involved, his every action was intended to screw Boeing and award the contract to EADS/Airbus.

[Sen. Walter Sobchak]

19. Screw Boeing?

Giving this contract to Boeing would be akin to the State of California giving a contract to Enron!

And even if you want to talk jobs, should Enron have been allowed to continue its rape of my state just so that the employees of Enron could keep their jobs?

Had Boeing not developed an elaborate plot to defraud the American taxpayer the 767 Tanker would already be in service. Well maybe not, seeing as the 767 tankers built for Japan and Italy have been a disaster. But the contract would have been theirs.

Boeing is 100% responsible for this outcome, hopefully Boeing and other corporations will learn their lesson from this experience and not repeat it in future.

[MaryCeleste]

20. Nice Conclusions, how about some evidence?

Boeing has nothing else to answer other than the untried hybrid 767 and did it without adequate cost data. Scream McBush all you want, but that doesn't impact the ICE or other evaluation criteria. If you actually read what was posted, all changes were made prior to release of the final RFP.

Do you have any clue how the DoD acquisition system actually works?

[stevenleser]

23. LOL, I am former USAF and was involved in DoD acquisitions and contract managment, so, yes

any other questions?

[MaryCeleste]

25. Clearly you are not current or up to date

No APC member would make any of the comments you have made.


Any thoughts on the ICE issue?

[starroute]

9. I want to know more about the Alabama/Gov. Riley connection

Given all the crap that's been coming out about the Don Siegelman case, I've become very suspicious of anything having to do with Alabama's Governor Bob Riley -- so I was struck by the fact that he seems to be a primary beneficiary of this EADS/Airbus contract:

http://www.wkrg.com/news/article/gov_riley_kc_30_will_be_built_by_most_patriotic_people/10924/

February 29, 2008

News 5 spoke with Governor Bob Riley just a few minutes after he learned Alabama, Mobile, EADS, and Northrop Grumman won the KC-30 Tanker Project.

Here is a statement released by the Governor's Office:

“There are only two places in the world where large airplanes are built: Seattle, Washington and Toulouse, France. Now, there will be a third: Mobile, Alabama.

“To say this is a great day for Alabama is a monumental understatement. This will go down in history as one of our greatest days.

I also found a site connecting Riley and McCain in events from a year ago:

http://havenworks.com/flying/

"On January 15, 2007, McCain appeared at Alabama Gov. Bob Riley's gubernatorial swearing in ceremony and formally called for multiple bidders in the tanker deal. The push for an open process had only one true beneficiary, however, and that was the Northrop Grumman/EADS consortium, which was poised to be Boeing's sole competitor." ... "A day after McCain made his proclamation, the contributions began to flow. John Green, a lobbyist for EADS donated $2,100 to the senator's presidential campaign. Ten days after that, Michelle Lammers, the "Chief of Staff" for EADS North America, gave $250 to the McCain campaign. It was her first political contribution ever. Less than a month later, the long-time head of EADS' government affairs program, Samuel Adcock, made a $2,100 donation to McCain. And eleven days later, Ralph Crosby, the head of EADS North America, donated $2,300 himself."

Moreover, the Ogilvy Group -- the lobbying firm mentioned in the OP -- has its own Alabama connection, by way of a lobbyist named Stewart Hall, who was formerly an aide to Sen. Richard Shelby (R-AL) and then was tied in with Karl Rove and Gov. Riley's son Rob. According to whistleblower Jill Simpson's testimony before the House Judiciary Committee:

http://www.speaker.gov/blog/wp-content/uploads/2007/10/jillsimpsoninterviewwithexhibits.pdf

Q Okay. And the Karl that is referenced here -- well, let me ask about Stewart. Who is the Stewart referenced here?

A Stewart is a lobbyist that works for the Federalist Group.

Q Here in Washington, D.C.?

A Yes. And they've now been bought out by Ogilvy.

Q This matter was an effort to collect on a FEMA contract?

A That is that's correct.

Q And the Karl that is listed here, do you know who that is?

A I believe that is Karl Rove.

Q And why do you think that's Karl Rove?

A Rob -- what Rob would do for us occasionally, he would ask me to do little odds and ends for him, such as follow Don Siegelman and stuff. And then he for me occasionally would -- if I needed somebody to write a letter to speed up a client getting a check or whatever, he would see if he could find somebody that would help me with that. And it was not uncommon for him to talk to Karl Rove and Stewart Hall about that because he would make reference to it.

It's not clear to me how all these relationships line up -- but my best guess at this point is that a year ago McCain made a devil's bargain with the Riley/Ogilvy axis to get that contract for Alabama. In any case, it could use looking into.

[stevenleser]

14. Very interesting stuff. The plot thickens...

... we have not heard the last of this I am sure!

[Voltaire99]

16. Yawn. I don't give a rat's ass about the empire's military contracts.

And it's pathetic that warrior Democrats do.

Your sort is no different to the Republicans -- war, war, war, war. You and your war economy disgust me.

[stevenleser]

17. Oh brother. Pontificate somewhere else, please...

this has nothing to do with whether or not it is right to build the tankers or other weapons systems. It has to do with whether someone influence peddled and engaged in corruption or not, and it is particularly relevant since the person in question claims they never do that.

Sorry this flew so far over your head.

[MaryCeleste]

21. Take you own advice, you lack any substantive evidence of corruption in the selection process

McCain did not set the KPPs, evaluation criteria, or the timelines. That is all handled inside the DoD, which knew which ever offer it chose there was going to be a mess. The process was as clean as possible.

Boeing has just as many lobbyists as NGC, more of them former flag officers than any contractor I know. They are also the company with the track record for corruption.

You really don't have a case for corruption or even a bad conclusion until GAO gets done.

[stevenleser]

22. I think you do not know what the word Pontificate means...

[MaryCeleste]

26. I do, which is why I suggested you follow your own advice

[stevenleser]

28. No, you clearly dont.

I didnt pontificate. I wrote an opinion piece based on 2 pages worth of facts and links I provided. You can disagree with my opinion or dispute the facts but you cannot say I was pontificating. The user in question to whom I addressed that comment did not in any way address the point of the OP and went off on their high horse about war and such.

Next?

[JPZenger]

27. Delays Put US Personnel at Risk

McCain killed the original Boeing tanker deal many years ago. If that deal had gone through, US air force personnel would be using reliable modern aerial tankers, instead of planes that are older than the pilots. Aerial refueling is extremely dangerous, and should not be done with 30 or 40 year old aircraft.

Also, the production line at Boeing that makes the aerial refueling planes will now shut down, and cannot be restarted without a huge effort. That makes us overly dependent on other countries for an essential part of our air defense.

[Sen. Walter Sobchak]

29. so the fact the Boeing bid was a fraud doesn't bother you?

and given the Japanese and Italian Boeing 767 tankers are only now limping into the air what makes you so confident?

What is it about Boeing that is making people here overlook their severe ethical lapses?
Where is the paranoia about everything military or corporate that comes into every other issue?

John McCain shut down a fraudulent program, it is simple as that. The question should not be about John McCain - but why the Democrats didn't attempt to shut down the obviously fraudlent program themselves.