"I saved the taxpayers $2-billion on a bogus Air Force Boeing tanker deal where people went to jail."
John McCain on Wednesday, November 28th, 2007 in St. Petersburg, Fla.
He uncovered a wasteful mess
Indeed, McCain was front and center in a well-publicized effort that killed an Air Force plan to lease 100 Boeing 767s and use them for refueling tankers. The plan eventually led to one of the more notable Washington scandals in years, resulting in prison terms for Mike Sears, a top Boeing official, and Darleen Druyun, the Air Force's No. 2 weapons buyer. Druyun admitted to giving Boeing preferential treatment and negotiating a $250,000-a-year job with the company while overseeing the deal.
It is well-documented in media and government reports that McCain was quick to identify the $23.5-billion deal as a bad one for taxpayers. He found it in December 2001, tucked into a little-noticed amendment to the 2002 defense budget.
Earlier that year, shortly after the 9/11 attacks, Boeing had convinced the Air Force that it could start replacing its aging fleet of refueling tankers more quickly by leasing the aircraft rather than purchasing them. Air Force officials acknowledged that leasing would be more expensive, but they said the estimated extra cost — $150-million — was worth it.
There were two problems. One, the Air Force previously expressed no great urgency to replace its tanker fleet. Two, government investigations prompted by McCain's public outrage found that the Air Force vastly underestimated the extra cost of leasing. In 2003, the Congressional Budget Office put the extra cost at $1.3-billion to $2-billion, which is where McCain gets his number.
Other senators and watchdog groups took up the fight against the deal, but only after McCain and his staff revealed the makings of a scandal. A 2005 report by the Defense Department's Inspector General found that the Air Force circumvented normal procedures, conducted no analysis of the alternatives to leasing and collected no pricing data to justify the deal.
"If it wasn't for Sen. McCain, the scrutiny that occurred about this deal would never have happened," said Keith Ashdown of the watchdog group Taxpayers for Common Sense. "It was probably the best example of oversight in the 108th Congress."
Boeing paid a record $615-million to settle the civil and criminal allegations that arose in the scandal. Since the tanker deal never went through, it's hard to say McCain saved taxpayers $2-billion. It might be more accurate to say he kept the government from entering into a deal that would have caused it to overspend by as much as $2-billion.
Despite that quibble, we find his statement True.
Published: Thursday, November 29th, 2007 at 12:00 a.m.
Subjects: Federal Budget
Sources:Congressional Budget Office, "Assessment of the Air Force's Plan to Acquire 100 Boeing Tanker Aircraft," Sept. 3, 2003
Department of Defense, "Management Accountability Review of the Boeing KC-767A Tanker Program," May 13, 2005
The Seattle Times, "McCain still stalks Boeing tanker deal," Dec. 26, 2004
International Herald Tribune, "Boeing official sentenced in Air Force Case," Feb. 19, 2005
U.S. Office of Government Ethics, "2004 Conflict of Interest Prosecution Survey — United States v. Darleen Druyun," Sept. 7, 2005
Interview with Keith Ashdown, Taxpayers for Common Sense, Nov. 28, 2007
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