Corporate Welfare

Pentagon Official Called Proposed Lease of Tankers a 'Bailout,' Report Finds: WaPo.

For the past three years, the Air Force has described its $30 billion proposal to convert passenger planes into military refueling tankers and lease them from Boeing Co. as an efficient way to obtain aircraft the military urgently needs.

But a very different account of the deal is shown in an August 2002 internal e-mail exchange among four senior Pentagon officials.

"We all know that this is a bailout for Boeing," Ronald G. Garant, an official of the Pentagon comptroller's office, said in a message to two others in his office and then-Deputy Undersecretary of Defense Wayne A. Schroeder. "Why don't we just bite the bullet," he asked, and handle the acquisition like the procurement of a 1970s-era aircraft -- by squeezing the manufacturer to provide a better tanker at a decent cost?

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Besides documenting precisely who was responsible, the new report details the Air Force's vigorous efforts on Boeing's behalf. It also shows how Air Force leaders and Boeing officials jointly manipulated legislation to authorize the deal and later sought to suppress dissenting opinion throughout the Pentagon.

After interviewing 88 people and reading hundreds of thousands of pages of e-mails, the inspector general's office concluded that four top Air Force officials and one of Defense Secretary Donald H. Rumsfeld's former top aides, Undersecretary of Defense Edward C. "Pete" Aldridge, violated Pentagon and government-wide procurement rules, failed to use "best business practices," ignored a legal requirement for weapons testing and failed to ensure that the tankers would meet the military's requirements.

The report also connects Rumsfeld to policymaking on the lease, recounting a statement by former Air Force secretary James G. Roche that Rumsfeld had called him in Newport, R.I., in July 2003 to say "he did not want me to budge on the tanker lease proposal," despite criticism.

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n the copy of the report obtained by The Washington Post, 45 sections were deleted by the White House counsel's office to obscure what several sources described as references to White House involvement in the lease negotiations and its interaction with Boeing. The Pentagon separately blacked out 64 names and many e-mails. It also omitted the names of members of Congress, including some who pressured the Pentagon to back the deal.

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... Boeing executives later pressed subcontractors to call the White House, and met with Andrew H. Card Jr., the White House chief of staff, who backed the deal.