McCain pro-military, but worries defense firms

By Andrea Shalal-Esa - Analysis

WASHINGTON (Reuters) - Sen. John McCain, the presumed Republican presidential nominee, strongly supports the war in Iraq and those in uniform, but his investigations of major weapons deals have defense industry executives uneasy.

Privately, some defense company officials say they are backing Sen. Hillary Clinton of New York, one of the two remaining contenders for the Democratic nomination, who they see as a better ally for the industry in the longer-term.

Barack Obama, the surging Democratic rival to Clinton, is more of an unknown to Pentagon suppliers, reflected in political donation data that shows the Illinois senator behind McCain, who in turn trails Clinton.

Both Clinton and McCain, an Arizona Republican, serve on the Senate Armed Services Committee. McCain has a far longer history on the panel and has aggressively dug into several big weapons contracts in recent years.

It was McCain's 2003 investigation that ultimately killed a $23.5 billion Air Force plan to lease and buy 100 Boeing Co (BA.N) aerial refueling planes. The probe also sent two former Boeing executives to prison and prompted the resignation of Boeing's chief executive and two Air Force officials.

McCain, the decorated Navy pilot and former Vietnam prisoner of war, often mentions the Boeing tanker scandal in his campaign speeches, boasting that halting the controversial deal helped save taxpayers about $6 billion.

His work investigating other defense deals has been little noticed in the mainstream media. But it is clearly on the minds of defense executives.

"We're not too excited about the prospect of a McCain presidency," said one defense company executive who spoke on condition of anonymity, citing McCain's aggressive approach to investigating the industry.

This executive said McCain also would come under pressure to reduce budget deficits, and defense spending, the largest area of discretionary spending, would be vulnerable to cuts.

Keith Ashdown at Taxpayers for Common Sense, a nonprofit watchdog group said the "Pentagon cash machine" would be much more difficult for companies to access. "If you're a defense company and McCain wins, you know that your free ride at the Pentagon is going to be ending."

Ashdown adds that McCain has no secret plan to cut the budget, but does want to end years of massive cost overruns and delays in virtually every big weapons program.

"...the folks who have perennial cost overruns are going to have trouble under a McCain administration," he said.

According to the Center for Responsive Politics, Clinton leads in receiving donations linked to the defense industry with $143,433, versus $129,350 to McCain and $70,502 to Obama.

The industry is a relatively small political contributor compared to the financial services, telecoms and legal industries.

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