Thread: McCain Advisers Lobbied for Airbus

McCain Advisers Lobbied for Airbus

Tuesday, March 11, 2008 3:30 AM

WASHINGTON -- Top current advisers to Sen. John McCain's presidential campaign last year lobbied for a European plane maker that beat Boeing to a $35 billion Air Force tanker contract, taking sides in a bidding fight that McCain has tried to referee for more than five years.

Two of the advisers gave up their lobbying work when they joined McCain's campaign. A third, former Texas Rep. Tom Loeffler, lobbied for the European Aeronautic Defence and Space Co. while serving as McCain's national finance chairman.

EADS is the parent company of Airbus, which teamed up with U.S.-based Northrop Grumman Corp. to win the lucrative aerial refueling contract on Feb. 29. Boeing Co. Chairman and CEO Jim McNerney said in a statement Monday that the Chicago-based aerospace company "found serious flaws in the process that we believe warrant appeal."

McCain, the Republican presidential nominee in waiting, has been a key figure in the Pentagon's yearslong attempt to complete a deal on the tanker. McCain helped block an earlier tanker contract with Boeing and prodded the Pentagon in 2006 to develop bidding procedures that did not exclude Airbus.

EADS retained Ogilvy Government Relations and The Loeffler Group to lobby for the tanker deal last year, months after McCain sent two letters urging the Defense Department to make sure the bidding proposals guaranteed competition.

"They never lobbied him related to the issues, and the letters went out before they were contracted" by EADS, McCain campaign spokeswoman Jill Hazelbaker said Monday.

According to lobbying records filed with the Senate, Loeffler Group lobbyists on the project included Loeffler and Susan Nelson, who left the firm and is now the campaign's finance director. Ogilvy lobbyist John Green, who was assigned the EADS work, recently took a leave of absence to volunteer for McCain as the campaign's congressional liaison.

"The aesthetics are not good, especially since he is an advocate of reform and transparency," said Richard Aboulafia, an analyst with the aerospace consulting firm Teal Group. "Boeing advocates are going to use this as ammunition."

McCain, a longtime critic of influence peddling and special interest politics, has come under increased scrutiny as a presidential candidate, particularly because he has surrounded himself with advisers who are veteran Washington lobbyists. He has defended his inner circle and has emphatically denied reports last month in The New York Times and The Washington Post that suggested he helped the client of a lobbyist friend nine years ago.

He has also cast himself as a neutral watchdog in the Air Force tanker contract, one of the largest in decades.

"All I asked for in this situation was a fair competition," he told reporters Monday at Lambert Field in St. Louis, home of a Boeing fighter jet plant.

On Friday, he defended his aggressive oversight: "I never weighed in for or against anybody that competed for the contract. All I asked for was a fair process. And the facts are that I never showed any bias in any way against anybody _ except for the taxpayer."

Last week, Air Force Secretary Michael Wynne told the Senate Armed Services Committee that the EADS-Northrop Gruman plane was "clearly a better performer" than the one proposed by Boeing.

It is unclear what EADS hired the lobbyists to do. Loeffler and Airbus officials did not immediately respond to phone and e-mail messages left late Monday.

A Boeing spokesman declined to comment Monday on the links between McCain and lobbying efforts on behalf of EADS.

But Boeing supporters already have begun to accuse McCain of damaging Boeing's chances by inserting himself into the tanker deal.

One of them, Rep. Norm Dicks, D-Wash., said the field was "tilted to Airbus" because the Pentagon did not weigh European subsidies for Airbus in its deliberations _ a decision he blamed on McCain. Everett, Wash., is where Boeing would perform much of the tanker work, and Dicks is a senior member of the House Appropriations defense subcommittee.

In December 2006, just weeks before the Air Force was set to release its formal request for proposals, McCain wrote a letter to the incoming defense secretary, Robert Gates, warning that he was "troubled" by the Air Force's draft request for bids.

The United States had filed a complaint with the World Trade Organization alleging that Airbus unfairly benefits from European subsidies. Airbus in turn argued that Boeing also receives government support, mostly as tax breaks.

Under the Air Force proposal, bidders would have been required to explain how financial penalties or other sanctions stemming from the subsidy dispute might affect their ability to execute the contract. The request was widely viewed as hurting the EADS-Northrop Grumman bid.

The proposed bid request "may risk eliminating competition before bids are submitted," McCain wrote in a Dec. 1, 2006, letter to Gates. The Air Force changed the criteria four days later.

Dicks said the removal of the subsidy language was a "game-changer" that favored EADS over Boeing.

"The only reason that they could even bid a low price is because they received a subsidy," Dicks said last week. "And Senator McCain jumped into this and said that (the Air Force) could not look at the subsidy issue _ which I think is a big mistake, especially when the U.S. trade representative is bringing a case in the (World Trade Organization) on this very issue."

EADS' interest in the tanker deal is evident in the political contributions of its employees. From 2004 to 2006, donations by its employees jumped from $42,500 to $141,931, according to an analysis by the nonpartisan Center for Responsive Politics. So far this election cycle, company employees have donated $120,350. Of that, McCain's presidential campaign has received $14,000, the most of any other member of Congress this election cycle.

McCain prides himself in the role he played blocking an earlier version of the tanker deal that gave the contract to Boeing. As chairman of the Senate Commerce Committee and of an Armed Services subcommittee, McCain led an investigation that eventually helped kill that contract in 2004. A former Air Force official and a top Boeing executive both served time in prison, and the scandal led to the departure of Boeing's chief executive and several top Air Force officials.

"I intervened in a process that was clearly corrupt," McCain said Friday. "That's why people went to jail."

While McCain has praised Boeing for fixing its practices, his campaign said the experience prompted him to demand "a full, fair and open competition." His letters _ one to Deputy Defense Secretary Gordon England in September 2006 and the other to Gates _ were sent with that spirit in mind, Hazelbaker said Monday.

Once the rules were in place, Hazelbaker said, bidders submitted proposals, the Air Force reviewed them and the contract was awarded.

"That is a process that McCain, appropriately, had absolutely no role in," she said.

http://www.newsmax.com/politics/mccain_ ... 79396.html

Boeing to Protest $35B Tanker Contract

Tuesday, March 11, 2008 5:58 AM

WASHINGTON -- The fate of a $35 billion Air Force contract is out of the hands of the military.

Boeing Co. said Monday it will formally protest the refueling tanker contract awarded to European Aeronautic Defence and Space Co. and Northrop Grumman Corp.

While that official protest, to be filed Tuesday, puts the contract under review of the Government Accountability Office, it doesn't take Air Force officials out from under intense pressure.

Those officials return Tuesday to Capitol Hill, where rhetoric and furor have accompanied the high-stakes deal since the Air Force late last month gave the job to a European company instead of an American one.

The backlash has been led by lawmakers from Washington, Kansas and other states that would have gained jobs had Boeing won. Air Force officials have said the impact on American jobs was not one of their criteria for awarding the contract.

The contract to replace 179 air-to-air refueling tankers is the first of three Air Force awards worth as much $100 billion to replace its entire fleet of nearly 600 tankers over the next 30 years.

Following a debriefing by Air Force officials Friday, Boeing questioned the fairness of the competition, citing "inconsistency in requirements, cost factors and treatment of our commercial data."

The Chicago-based aerospace company "found serious flaws in the process that we believe warrant appeal," Boeing's chairman and chief executive, Jim McNerney, said in a statement.

The company argued that the Air Force changed its method for evaluating the two tankers even after issuing a request for proposals. These changes allowed a larger tanker to be competitive even though the Air Force originally had called for a medium-size plane. Air Force officials have indicated that the larger size of the tanker offered by the EADS/Northrop team helped tip the balance in its favor.

"We didn't think they wanted a bigger plane," Jim Albaugh, head of Boeing's Integrated Defense Systems unit, said last week. Albaugh said this is why Boeing based its offering on Boeing's 767, noting that "we were discouraged from offering the 777," a bigger aircraft that would have been more comparable to the winning bid.

Once Boeing files its protest, the GAO will have 100 days to issue a ruling. A protest could delay execution of the tanker contract by nearly a year, according to Loren Thompson, a defense analyst with the Lexington Institute, a think tank.

In a statement, Northrop Grumman said the tanker competition was "the most rigorous, fair and transparent acquisition process in Defense Department history."

The Air Force selection of EADS, the European parent of Boeing rival Airbus, and Northrop Grumman of Los Angeles came as a major surprise. Boeing has been supplying refueling tankers to the Air Force for nearly 50 years.

With anger mounting on Capitol Hill, top Air Force officials - including Air Force Secretary Michael Wynne, Air Force Chief of Staff T. Michael Moseley and Sue Payton, the Air Force's assistant secretary for acquisition - are scheduled to testify this week at a series of congressional hearings.

"This is one of the worst decisions I've ever seen," said Rep. Norm Dicks, a Democrat from Washington State, which is home to many Boeing jobs. Dicks said he will work to block the decision or push for a new tanker competition.

The EADS/Northrop Grumman team plans to perform its final assembly work in Mobile, Ala., although the underlying plane would mostly be built in Europe. It would also use General Electric Co. engines built in North Carolina and Ohio.

Northrop Grumman estimates building the tanker would produce 2,000 new jobs in Mobile and support 25,000 jobs at suppliers nationwide.

Boeing would have performed much of the tanker work in Everett, Wash., and Wichita, Kan., and used Pratt & Whitney engines built in Connecticut. The company said a win would have supported 44,000 new and existing jobs at Boeing and more than 300 suppliers in more than 40 states. But even if Boeing had won the deal, critical parts of its tankers would have come from other countries, including Japan and Italy.

Sen. Richard Shelby, R-Ala., said he remains confident that the GAO will uphold the Air Force decision and added that he want to "keep the Congress out of the procurement business."

Thompson said Boeing will have a tough time overturning the Air Force decision. "This was the most rigorous and complete weapons award that the Air Force has done in modern times," he said.

According to data and reports reviewed by The Associated Press, corporate claims of contract irregularities and improprieties are rejected more often than not by the GAO. Of the 1,327 bid protests lodged with the GAO in 2006, just 249 got as far as an official decision. And in 71 percent of those cases, the office sided with the government and denied the complaint.

Boeing's shares fell $2.22 to $74.38 Monday. Northrop's shares fell 62 cents to $78.39.

http://www.newsmax.com/money/Boeing_con ... 79428.html

I can see it now . If the bit holds for EADS at 35 billion dollar . There will be cost over-runs with No accountibitly to the U.S taxpayer .
I knew this SOB (McAmnesty) was crazy , this is more proof . To put the knife in the back of American workers & Companys when the economy is flat tells me everything bout this creep i need to know . Support your Country or get out . I lean heavy on him (McEvil) getting out

No wonder...if you look at McLiar's Federal Election Commission (FEC) corporate campaign contributors, you will see that EADS, Northrup Grumman, and Park Air Systems, who are all connected, have all contributed to his campaign. Interestingly, Boeing isn't on the list! Also interesting is several contributions from UniVision, of which stock is owned by McCain.

Na...no conflict of interest here!!!

http://query.nictusa.com/pres/2007/Q2/C ... 30470.html

On the positive side, such an obnoxious sell-out of Americans, angering powerful people in the Armed Forces and government no less, may be just the wake-up call before the election. How could any patriot vote for this man now? Even the brainwashed ones must think he's a bad guy surrounded by bad guys after this.
Not that he isn't the least threat to this country of the 3 candidates in the MSM, unfortunately.

I don't know how anyone is going to vote for McCain after this fact find!

He's an American sell out and would continue to ruin AMERICA!!

I'm glad this information is being made known now before the election.