McCain blocks runway as Boeing begins approach to air force deal [ 100 air-to-air refuelling planes?

The Watcher

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Another one from Enjoy guys!
What the hell is US going to do with 100 air to air refuelling planes??? So many!
McCain blocks runway as Boeing begins approach to air force deal
By Marianne Brun-Rovet and Peter Spiegel
Published: September 3 2003 5:00 | Last Updated: September 3 2003 5:00

For more than two years Boeing, the aerospace giant, has been waging a carefully calibrated campaign to secure a $21bn (€19bn, £13bn) contract to build 100 air-to-air refuelling planes for the US air force. But just inches from the finish line, they appear to have run into an immovable object: Senator John McCain.

The powerful chairman of the Senate's commerce committee, a well respected voice on military matters, has launched an equally aggressive campaign to block the deal, arguing that it is a"military-industrial rip-off" intended to bail out Boeing's ailing 767 line by ordering aircraft that the air force does not need.

Today, Mr McCain will get his first chance to face the administration officials who approved the deal in public, in what will be the first of two congressional hearings on the contract this week. Although three of four congressional panels have already approved the plan - including the House and Senate armed services committees - it must be approved by the full Congress.

Ahead of today's hearings, the senator released hundreds of pages of memos, e-mails and other documents he requested from Boeing, the air force and the White House budget office, which show the stunning breadth of Boeing's lobbying efforts.

Some of the documents could come back to haunt the aerospace giant. A letter from Norman Dicks, a Democratic congressmen from Washington - the state where Boeing will build the aircraft - to President George W. Bush urged the White House to back the deal in order to increase Boeing's business in the wake of the September 11 2001 attacks.

"It is both appropriate and necessary to consider ways to boost the aircraft manufacturing sector," Mr Dicks wrote a month after the terrorist strike.

"We have a unique opportunity to address the problems affecting Boeing while also meeting urgent requirements to modernise air force and navy aircraft."

The e-mails have also raised the issue of whether Boeing was privy to proprietary information of arch-rival Airbus, which had also bid for the tanker contract with an offering of converted A330s. An internal Boeing e-mail shows that a key air force official told Boeing executives "several times" that Airbus's price on an A330 was $5m to $17m cheaper than the 767.

Another internal Boeing e-mail, dated March 29 2002, indicates the air force guided Boeing through the proposal process. A senior air force official told company executives that "only Boeing can meet the requirements of the fy02 approps [full year 2002 appropriations] language" and that their rival "lacks the tanker experience and appropriate refuelling technologies", according to the e-mail. The air force also told Boeing that "net present value analysis" favoured its bid, the e-mail said.

Mr McCain is not the only chairman who will have his chance to grill administration officials. The Senate armed services committee will have similar hearings tomorrow, featuring James Roche, the air force secretary, and Michael Wynne, the Pentagon's procurement chief. The hearings could be crucial to Mr Roche, who has been nominated by Mr Bush as the new secretary of the army. Mr McCain has held up Mr Roche's confirmation because of the tanker controversy.

The e-mails released show Boeing working very closely with the air force and Mr Roche to get the deal through Mr McCain and the Congress.

On February 19 last year Gerald Daniels, then head of Boeing's military aircraft and missile systems, told chairman Phil Condit he had "excellent discussions" with Mr Roche and Gen John Jumper, the air force chief of staff, a week earlier.

"Question is the terms of the deal, not if there will be a deal," Mr Daniels wrote. "All are willing to fight for this."