McCain under Democratic fire for Air Force fiasco

WASHINGTON (Reuters) - Republican presidential hopeful John McCain is fending off charges that he pushed the Air Force into a botched $35 billion deal for midair refueling planes.

Presumptive Republican presidential candidate US Senator John McCain pauses while delivering a speech to the Economic Club of Canada in Ottawa June 20, 2008. REUTERS/Chris Wattie

On Wednesday, U.S. auditors sided with Boeing Co, which had protested the tanker contract awarded to Northrop Grumman Corp and Europe’s EADS.

The Democratic National Committee accused McCain of “mimicking” EADS, corporate parent of Airbus and Boeing’s commercial-jet rival, “every step of the way” in shaping the competition for the contract.

“In reality, Senator McCain intervened at key steps in the process, echoing the arguments of the EADS/Airbus consortium each time,” the Democratic party headquarters said.

The senator from Arizona, it charged in a follow-up statement, “helped steer a tanker contract to a European company for which seven of his campaign advisors and fund-raisers then lobbied.”

The Democrats weighed in after the Government Accountability Office, a nonpartisan arm of Congress, found the Air Force made “significant errors that could have affected the outcome of what was a close competition.”

McCain has argued that his actions were aimed exclusively at promoting a fair and open bidding process.

“My paramount concern in the tanker replacement program has always been that the Air Force buy the most capable aerial refueling tankers at the most reasonable cost,” he said in a statement after the GAO faulted the contract award process.

“Obviously they need to go back and redo the contracting process again, the awarding of it, and I hope that this time they will get it right,” McCain added during a Wednesday stop in Springfield, Missouri.

Presumptive Democratic presidential nominee Barack Obama, for his part, applauded the GAO recommendation and called for the Air Force to reopen the tanker competition.

McCain played a key role in killing an earlier, $23.5 billion Air Force plan to lease and buy, without competition, 100 Boeing 767s as tankers. He tarred it as a taxpayer “rip-off.”

Subsequently, two Boeing officials served prison terms for holding illegal job talks while one of them, Darleen Druyun, was still the Air Force’s No. 2 arms buyer, supervising billions of dollars of Boeing contracts.

McCain has voiced pride in foiling the lease deal, saying he saved taxpayers $6 billion. In a November 19, 2004, Senate floor speech, he called the fiasco “a case of either a systematic failure in procurement oversight, willful blindness, or rank corruption” on the part of the Air Force.

In 2006, McCain pressed the Pentagon to change a bidding process Northrop Grumman had objected to. McCain voiced concerns about plans to factor in World Trade Organization disputes over subsides for commercial airliners. Boeing and Airbus have accused each other of using illegal government subsidies to help peddle their wares worldwide.

“The WTO provision is inherently beyond the Air Force ability to judge or measure,” McCain wrote in a September 8, 2006, letter to Deputy Secretary of Defense Gordon England. “As such, it needlessly and, in my view, improperly injects into what should be a full and open competition an element of arbitrariness and capriciousness.”

McCain went on to question whether “any legal authority exists to support the inclusion of a WTO provision as an evaluation factor.”

In a second letter to England on September 18, 2006, McCain said he feared the inclusion of WTO proceedings could “eliminate competition even before bids are submitted.”

Michael Wynne, the outgoing Air Force secretary, told reporters on Friday the Air Force in effect had leaned over backward to keep Northrop from pulling out.

“I think getting a competitor to hang in there was one of our early-on responsibilities,” he said.

Loren Thompson of the Lexington Institute, an Arlington, Virginia-based research group, said McCain’s actions “put pressure on the Air Force to keep Northrop engaged.”

“The resulting concessions apparently skewed the selection process against Boeing,” added Thompson, a defense industry consultant with close ties to the Pentagon.

The Air Force has 60 days to respond to the GAO findings.

When pressed on what went wrong in the latest tanker deal, Wynne said, “I think we made it overly complex.”

“There’s going to be a lot of fear in the system,” Wynne added. The question, he said, would be “can we ever get this right?”

Editing by Richard Chang