Boeing tanker deal put on hold
BLUMENTHAL; The News Tribune
Dec. 3, 2003
WASHINGTON - Just a day after Boeing's chief executive resigned,
the Pentagon announced Tuesday it's putting a hold on the $23 billion
Air Force deal to lease and buy 100 of the company's 767s for use
as aerial tankers.
Deputy defense secretary Paul Wolfowitz, in a letter to various committee
chairmen on Capitol Hill, said he had ordered a "pause in the
execution of the contracts to lease and purchase tanker aircraft."
Wolfowitz also said he had asked the Pentagon's inspector general
to provide an independent assessment of allegations that a Boeing
official might have improperly offered a job to the Air Force's procurement
official who oversaw the negotiations for the tanker contract.
Last week, Boeing fired Michael Sears, its chief financial officer,
and Darleen Druyun, who took a job with the company after leaving
the Pentagon. On Monday, Phil Condit, Boeing's chief executive and
"The department remains committed to the recapitalization of
our aerial tanker fleet," Wolfowitz wrote. "Nonetheless,
I believe it is prudent to reassess this matter before proceeding."
The Air Force had hoped to sign the contract to lease 20 Boeing 767s
and buy an additional 80 as early as next week. Through intense congressional
negotiations, the price had been pared by several billion dollars
to about $17 billion, with an additional $6 billion for maintenance
The latest twist comes more than two years after a tanker deal was
first proposed and against a backdrop of mounting congressional criticism.
Sen. John Warner (R-Va.), chairman of the Senate Armed Services Committee,
plans to hold hearings in January.
Sen. John McCain (R-Ariz.), the leading congressional critic of the
tanker deal, said he was "pleased" with Wolfowitz's decision
to suspend the signing of any contracts, adding he hoped the inspector
general's review would be a "thorough independent investigation
of the facts wherever the evidence takes you and however long it takes."
One of the top congressional proponents of the deal, U.S. Rep. Norm
Dicks (D-Belfair), said it was "time to clear the air" of
the allegations of impropriety. But Dicks said the tanker proposal
was still a good deal for the Air Force, with Boeing agreeing to cap
profits at no more than 15 percent, offering rebates if it sells 767s
to anyone else cheaper and picking up all the research and development
Dicks also said the final contract was reached seven months after
Druyun left the Pentagon.
"It's hard for me to believe they will find anything wrong,"
Dicks said. "If they do, we can renegotiate."
Dicks also said he was "disappointed" with Boeing's apparent
"They just imploded," he said. "Their credibility as
a company is on the line."
U.S. Sen. Maria Cantwell (D-Edmonds) said Wolfowitz's decision to
put the tanker deal on hold while the inspector general investigates
"may be just what is needed to give taxpayers the confidence
in the process needed for this agreement to move forward. I want a
contract, but I want it done right."
Washington's other senator, Patty Murray (D-Shoreline), said she hoped
any new reviews would be done quickly.
"This tanker deal had already faced unprecedented scrutiny from
Congress, government agencies, the Pentagon, and outside interest
groups," Murray said. "I'm confident that another round
of scrutiny will prove that this is still a good deal."
Les Blumenthal: 1-202-383-0008
• Everett assembly line might not survive long inquiry into tanker
(Published 12:01AM, December 3rd, 2003)