Friday, November 21st, 2014

McCain's Airbus ties

SUMMARY: A new attack ad goes after McCain's role in a lucrative defense contract being awarded to a European company over an American competitor.

In the mode of trying to turn a positive into a negative, an independent political group called Campaign Money Watch has begun airing a TV ad that paints Sen. John McCain as a bought-and-paid-for politician who swung a lucrative defense contract to a European company over an American competitor.

What's striking here is that McCain's role in this particular defense project has long been seen as one of taxpayer hero.

The issue is a highly contentious and much-publicized battle over a contract to build a fleet of air refueling tankers for the Air Force. Chicago-based Boeing has been at odds with a rival bidder, a partnership between U.S.-based Northrop Grumman and European Aeronautic Defense and Space Company (EADS), the parent company of Airbus.

To the surprise of many, Airbus was awarded the roughly $40-billion contract in March 2008, but the General Accounting Office upheld a protest from Boeing, concluding that the Air Force made a number of errors in the bidding process. The contract will now be re-bid.

Here's how an announcer in the Campaign Money Watch ad sums up the deal:

"A French company, Airbus, and an American company, Boeing, were competing for a contract worth up to 100 billion dollars.

"Seven of McCain's staff and fundraisers lobbied for Airbus.

"McCain got more money from Airbus' U.S. executives than any other politician.

"And guess what? John McCain intervened, which helped Airbus get that Pentagon contract.

"Tell John McCain to kick those lobbyists off the Straight Talk Express."

Similar claims have been made in chain e-mails.

We'll get into each of these points, but before we do, let's back up a little.

Back in 2004, McCain was at the forefront of a well-publicized effort that killed an Air Force plan to lease 100 Boeing 767s and use them for refueling tankers. Government investigations prompted by McCain's public outrage found that the Air Force vastly underestimated the cost of leasing by as much as $2-billion. The lease deal became one of the more notable Washington scandals in years. It resulted in prison terms for a top Boeing official and the Air Force's No. 2 weapons buyer, who admitted to giving Boeing preferential treatment and negotiating a $250,000-a-year job with the company while overseeing the deal.

McCain was hailed as a watchdog, and praised for his oversight by taxpayer groups — something McCain has occasionally touted on the campaign trail. See our previous ruling on McCain's role in uncovering this mess.

Now fast forward a couple years as the Air Force solicited bids for the manufacturer of a fleet of new refueling planes. The Campaign Money Watch ad is a little off-target when it states: "A French company, Airbus, and an American company, Boeing, were competing for a contract worth up to 100 billion dollars."

As stated before, Airbus had a U.S. partner, Northrop Grumman, a large defense contractor. And second, the contract was for about $40-billion. To back its "up to $100-billion" number, Campaign Money Watch cites a March 1, 2008, New York Times article that states, "The contract, one of the largest, at the Pentagon, is initially valued at $40-billion but has the potential to grow to $100-billion."

Keith Ashdown of the watchdog group Taxpayers for Common Sense said, "They (Campaign Money Watch) are making it seem a lot larger than it really is."

However, the ad is on target when it calls out McCain for having seven campaign staffers and fundraisers who lobbied for Airbus; and for accepting contributions from Airbus executives.

Former McCain finance chairman Thomas G. Loeffler's firm lobbied for Airbus parent company EADS. Loeffler's lobbying ties led to his departure from the McCain campaign in March. Susan E. Nelson left Loeffler's lobbying firm to be McCain's finance director. William L. Ball III, a former secretary of the Navy and frequent McCain surrogate, and John Green, who took a leave from Ogilvy Public Relations to serve as McCain's legislative liaison, also have lobbied for EADS. And three McCain fundraising bundlers — Kirk Blalock, Kirsten Chadwick and Aleix Jarvis — are with Fierce Isakowitz & Blalock, which has done lobbying work for EADS, according to campaign finance records at Opensecrets.org and Public Citizen.

As for political contributions, the ad states that "McCain got more money from Airbus' U.S. executives than any other politician."

The Center for Responsive Politics prepared a report for PolitiFact that backs that up. U.S. employees of EADS/Airbus have contributed $15,700 in this election cycle to McCain's campaign. The next highest recipient was Mark Warner, a Democratic candidate for the U.S. Senate, who has gotten $2,800. Sen. Barack Obama has gotten $2,650. Neither McCain nor Obama have gotten any money from Airbus PACs, which have spread around $123,000 to 22 congressional candidates this election cycle. See our ruling here.

Which gets us to perhaps the most damning allegation in the ad: "And guess what? John McCain intervened, which helped Airbus get that Pentagon contract."

In September 2006, McCain sent two letters to Defense Department officials about factors they should or should not consider in deciding the contract. Specifically, he urged them to ignore lawsuits currently before the World Trade Organization between the United States and the European Union about, in part, government subsidies for aircraft manufacturers. Boeing claimed government subsidies gave Airbus an unfair advantage. McCain argued that to include the lawsuits as an evaluation factor would detract from the competition by adding "an element of arbitrariness and capriciousness." It would also be unprecedented, he said.

So does that amount to intervening? Did it help Airbus get the contract? And did the promise of campaign contributions influence McCain?

Ashdown, of Taxpayers for Common Sense, doesn't think so.

"The word 'intervening' is not a word I would use," he said. "He was making sure there was a competition."

Remember, Ashdown said, McCain was integral in exposing "that Boeing had hoodwinked us on the original lease agreement," and so he was motivated to ensure there was a fair competition. The letters were aimed at that, he said.

Besides, he said, McCain didn't have a vote on who got the contract, so he didn't have the power to steer it to either company.

Given McCain's history with Boeing, Ashdown doesn't think $15,700 in contributions from Airbus execs affected McCain's decisions. But that doesn't excuse taking campaign contributions from them after the award.

"That was boneheaded," Ashdown said. "They should never have taken a dime from Airbus."

The same goes for having former Airbus lobbyists playing prominent campaign roles.

"They should not have let anyone from Airbus near his campaign," Ashdown said.

The McCain campaign did not respond to an inquiry from PolitiFact about the issue, but at a town hall meeting in March, McCain said, "I think my record is very clear on this issue, including a paper trail of letters that we wrote to the Department of Defense during this process saying clearly and unequivocally we just want a fair process and we don't want a repeat of the previous process."

Taken in parts, most of what Campaign Money Watch states in the ad is accurate. But it is misleading in its totality, in that it implies Airbus contributions — a mere $15,700 — somehow persuaded McCain to back a French company, at the expense of thousands of U.S. jobs.

That wasn't McCain's call. And two letters arguing against subsidy disputes not being included in the bid competition don't rise to the level of interference implied in the ad. Our ruling is Half True.