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Sen. Patty Murray, D-Wash., tours the Peace Arch port of entry while members of the National Guard search a car Monday in Blaine. Murray is credited with brokering a deal between the U.S. Air Force and Boeing that could be worth more than $20 billion.

Boeing deal slammed as wartime pork

$20 billion deal a 'win-win situation,' Sen. Murray says

GREG BARRETT GANNETT NEWS SERVICE

WASHINGTON -- In the charged days following Sept. 11, with America spoiling for a fight and Congress demanding muscle, the mood was ripe for military spending.

So when Sen. Patty Murray, D-Wash., stressed the "immediate need" for 100 midair-refueling Boeing 767 jets, it didn't seem to matter where her concern was most directed: the U.S. Air Force or the beleaguered Boeing Co.

"It's a win-win situation," said Murray, a second-term Boeing booster who had long been shopping a deal for her homegrown company. "Boeing has the planes, and the Air Force has the need."

In the name of war, Murray's legislation flew through -- and around -- conventional channels and landed at the last hour in the $318 billion defense appropriations bill. It could eventually tap taxpayers for about $20 billion in rental equipment that the Pentagon did not initially request.

As late as Oct. 22, 16 days into the air war in Afghanistan, the Boeing 767 tanker did not warrant mention on the Air Force's list of its top 60 unfunded needs.

Regardless, the Air Force today is well on its way to securing a lease that no one defines as a bargain, not even Murray.

But with the nation at war and with the promise of work for about 10,000 Boeing employees in 38 states -- some 2,400 in Washington state -- there was scant opposition in Congress.

"There was something in it for everyone," Sen. John McCain, R-Ariz., said of the defense bill. "It's called war profiteering."

How the Boeing deal unfolded is not so much an indictment of the players involved, McCain said, as it is of a system that expects provincial lawmakers to divvy the spoils of taxes. McCain, one day after his victory with campaign finance reform, said it is this sort of pork-barrel politics that will be the focus of his next crusade.

"I have been on it for a long time already," he said, noting that special interest earmarks have increased nonetheless, fourfold in the last five years. "What we have to do is get the American people riled up over this the way we did over campaign finance reform."

The Boeing deal, which he calls the "mother of all pork projects," is a start.

Budgetary sleight

The sticker price for a Boeing 767 converted to a refueling tanker is $150 million to $225 million, depending on options, said Bob Gower, vice president of Boeing's tanker program. An outright purchase then of 100 of these jets, which keep all other military jets aloft during war, would cost no more than $15 billion to $22.5 billion, assuming no bulk discount.

Boeing has presented lease and purchase options to the Air Force, but neither Boeing nor the Air Force will discuss the deals while negotiations are going on. Last year, Italy and Japan each purchased four of the Boeing 767 tankers for about $175 million and $225 million apiece, respectively.

But the deal massaged by Murray was based on a 10-year lease in a sort of budgetary sleight of hand. There was not enough money under the defense-spending cap for an outright purchase of 100 new tankers, so the expense must be projected into the murky ebb and flow of future budgets.

The White House Office of Management and Budget, which advised Congress against the lease deal, estimated the overall cost would be $26 billion, including construction of larger hangars. Under this plan, taxpayers would pay about full price for a tanker during the term of the lease, then either return it to Boeing in its youth or pay an additional lump sum to purchase it.

The life span of a Boeing 767 can be 70 years with proper maintenance, Gower said. There was little mention of that fact in congressional testimony. There was frequent talk, however, of the average age (41) of the current fleet of Boeing-built KC-135 tankers, a plane with a life span similar to the Boeing 767.

Alternately describing the tanker needs as critical and urgent, Murray, Air Force Secretary James Roche and Air Force Chief of Staff Gen. John P. Jumper have cited the time and expense required for the upkeep of the KC-135. Roughly one-quarter of the fleet of 546 tankers is grounded by maintenance and repairs at any given time.

Yet when Congress questioned Jumper's predecessor, Gen. Michael Ryan, in June about the KC-135, two years after Ryan led the air campaign over Kosovo, Ryan sounded unconcerned.

"This airplane is eventually going to have to be replaced," he said. "So we're looking out in about the next 15-year time frame to begin that replacement."

What happened when

During congressional testimony in February, Roche said the "ongoing war on terrorism" and its drain on tankers had motivated the Air Force to seek the Boeing 767.

But Murray's own timeline shows that discussions were initiated at least four days prior to the start of the air war. On Oct. 3, she coordinated a meeting between several lawmakers, Boeing and the Air Force for the specific purpose of replacing the KC-135.

Written into the defense bill now is unusual legislation awarding the job to a specific company (Boeing) before a contract was bid. If a competing company were to now make a better bid than Boeing, it would literally take an act of Congress to pry the business away.

"It is an egregious example of corporate pork justified under the guise of national security," said Frank Clemente, director of Public Citizen's Congress Watch, a nonprofit consumer advocate group. "Special interests getting things from Congress is bad enough, but exploiting tragedy for the purpose of increasing the profit margin is worse."

Boeing, which moved its headquarters from Seattle to Chicago last year, was already hurting when four of its commercial jets were hijacked Sept. 11. Rival Lockheed Martin defeated Boeing last year for the Pentagon's $200 billion contract to build a state-of-the-art military aircraft, and Boeing has announced the layoffs of 30,000 workers by the end of this year.

To Murray's credit -- or perhaps Boeing's -- there apparently was no quid pro quo at work. In February, Murray told union members at a Boeing parts plant in Spokane: "We'll do everything we can to make sure the plant stays here."

In March, Boeing announced it planned to sell the Spokane plant.

Base closings

One week before Congress passed Murray's legislation, lawmakers had agreed to a new round of military base closings beginning in 2005, the fifth such order since 1988. The Pentagon plans to cut 20 percent to 25 percent of the nearly 400 U.S. bases for an expected savings of about $3 billion annually.

Among the top 60 unfunded Air Force priorities leapfrogged by the Boeing legislation were requests for additional base maintenance, furnishings and firefighting equipment. There were others, such as ROTC pay, combat training, recruitment and retention.

Soon after the tanker deal survived McCain's mercurial objections, McCain was having lunch with Defense Secretary Donald Rumsfeld. He was on the edge of his seat and still on simmer.

"I am appalled by this Boeing thing that could cost $26 billion," McCain told Rumsfeld.

There was silence, McCain said. A blank stare.

"You didn't know about it?" McCain asked.

"No," Rumsfeld answered, although his staff had been briefed.

Recalling this, McCain sounds uncharacteristically resigned.

"There's really nothing I can do, the fix is in," he said. Then in a pounding cadence, he added: "It stinks to high heaven."

Murray, meanwhile, continues to sell it as an immediate and necessary need.

On the Web:

- U.S. Senator Patty Murray

- Boeing

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