Supports CAGW Criticism of the Budget-Busting Scandal 

(Washington, D.C.) – Citizens Against Government Waste (CAGW) today heralded a 256-page report commissioned by the Senate Armed Service Committee and conducted by Department of Defense (DoD) Inspector General Joseph E. Schmitz (IG), which details how the Air Force worked directly with financially-troubled Boeing to illegally push through the most costly government lease in history, as vindicating for its members and allies that fought tirelessly to block approval of the budget-busting scandal.

In 2001, CAGW became one of the first critics to point out that buying planes outright would be far cheaper than leasing them initially.  Aggressive pummeling of Boeing helped fuel a firestorm of criticism in the media, and the movement to derail the plan won an important ally in Sen. John McCain (R-Ariz.).  Even after federal investigations shed light on the corporate misconduct surrounding the sweetheart deal, Boeing’s friends in high places lobbied hard to keep the tanker deal alive, which basically amounted to a taxpayer bailout for Boeing’s 767 production lines.   

“It is doubtful that Congress would have acted without sustained pressure from government watchdogs and a few bold legislators that exposed the deal as the most expensive, unnecessary, budget-busting, scandalous example of corporate welfare in recent memory,” said CAGW President Tom Schatz.

The new report—a result of conducting 88 interviews and reading hundred of thousands of pages of internal e-mails—concludes that four top Air Force officials and Undersecretary of Defense Edward C. Aldridge violated Pentagon procurement rules, ignored a legal requirement for weapons testing, failed to ensure that tankers meet stated requirements and did not use “best business practices.”

The report shows that Air Force and Boeing officials worked together to manipulate authorization legislation, and suppress dissention among Pentagon officials.  Additionally, an unnamed cost analyst confirms that “numbers were contorted a lot of different ways to sell the program.”  For example, the basis for the tanker-lease deal was that the current KC-135 planes were in urgent need of replacement; however, the IG report supports the Defense Science Board’s contention that the planes were usable until 2040.

Questioning was limited to the DoD, although the White House is rumored to have been involved.  Comments from Defense Secretary Donald H. Rumsfeld and former deputy defense secretary Paul D. Wolfowitz were not included in the report.  In fact, 45 separate sections of the report were deleted by White House counsel’s office to obscure references to White House involvement in the lease negotiations; additionally, the Pentagon blacked out 64 names and numerous emails, as wells as the names of Members of Congress who pressured DoD to back the deal.