Lawmakers Miffed Over Boeing Tanker Deal Delay

Lawmakers who championed Boeing Co.'s unconventional deal to make air refueling tankers (search) for the Air Force were angry to learn the Pentagon will postpone the deal to review the company's conduct.

Mired in scandal involving the tanker arrangement, the aerospace giant has dismissed two executives and Phil Condit resigned Monday as chairman and CEO of the company.

Deputy Defense Secretary Paul Wolfowitz announced Tuesday there will be "a pause" for the Pentagon's internal auditor to examine whether the two executives' actions affected Boeing's government contract for the planes.

Regardless of the company's actions, supporters of the tanker program argue Boeing never drove the deal; Congress did.

"The need is real, and it affects my district, and anything that affects my district, I'm ready to fight for," said Rep. Todd Tiahrt, R-Kan.

"The fundamental problem here is, we have an aging tanker fleet," he said. "And all the hearings, all the investigations, have not solved the problem. The only way to solve the problem is, you get new tankers on the tarmac."

The idea of leasing tankers - unorthodox because government policy is to buy outright - was embraced early on by Tiahrt and Rep. Norm Dicks, D-Wash., both members of a key defense spending panel.

Boeing has laid off more than 40,000 workers, most in Washington state and Wichita, Kan., and the tanker deal holds the promise of creating jobs in both locations.

Lawmakers knew the Air Force didn't have the budget to swiftly replace the deteriorating Air Force fleet. The original plan was to lease all 100 of the tankers, which supporters considered an easier sell in Congress because it required less upfront money.

"That's why the whole lease deal is congressionally driven," Dicks said.

However, Congress also is where the delay originates.

Sen. John McCain, R-Ariz., and his supporters denounced the plan as wasteful and questioned company executives' conduct.

The result was a compromise to lease only 20 planes and buy the rest, a change expected to save billions of dollars. It also prompted a Defense Department investigation into the company's actions in securing the Pentagon contract despite a cheaper bid from French rival Airbus (search).

Despite McCain's criticism, supporters' ranks grew swiftly to include House Speaker Dennis Hastert of Illinois, where Boeing is now headquartered, and Democratic Sen. Patty Murray of Washington.

Hastert publicly took much of the credit for Boeing winning the contract.

Tiahrt swapped a vote on the White House's Head Start bill in exchange for a key committee's endorsement of the tanker deal.

Dicks played an influential role at a hearing on tankers last July, despite not serving on the committee and not being invited to testify.

"Congress took a more proactive role than it generally does," said Steven Kosiak, analyst for the nonpartisan Center for Strategic and Budgetary Assessments.

"It wasn't a priority of the Air Force (search), and certainly OMB had serious qualms about it up till the end, although they ultimately signed off on it," Kosiak said, referring to the White House Office of Management and Budget. "So somebody was pushing it. I would say Boeing (search) and Congress had a bigger role than is normally the case."

Wolfowitz explained the postponement in a letter to leaders of the House and Senate Armed Services committees. He said the Pentagon "remains committed to the recapitalization of our aerial tanker fleet and is appreciative of the compromise that will allow this arrangement to move forward.

"Nonetheless, I believe that it is prudent to reassess this matter before proceeding," he wrote.

Senate Armed Services Chairman John Warner called the pause "a prudent management step." He said the Pentagon should do nothing about the planes until Congress receives results of the internal review, and he said the review should include actions of all Pentagon and Air Force personnel involved in negotiating the lease contract.

Development of the tanker modifications is already under way at Boeing-Wichita.

Boeing announced Nov. 24 it had fired its chief financial officer, Mike Sears, and a vice president, Darleen Druyun, a former Air Force official, after a company investigation found Sears approached Druyun about joining the company while Druyun was overseeing Boeing contracts for the Air Force.

Boeing said Sears and Druyun were fired for violating company policies on hiring and they tried to cover up the misconduct.

Condit resigned unexpectedly Monday, saying "the controversies and distractions of the past year were obscuring the great accomplishments and performance of this company."