Ethics Newsline®

WASHINGTON
The Defense Department’s inspector general last week issued a report exploring the machinations behind an improper lease arrangement with aerospace giant Boeing — a deal that was derailed after evidence of fraud and ethics violations came to light.

The deal called for the Air Force to lease 100 Boeing 767 tanker aircraft, refitted to serve as refueling craft, at a cost of more than $23 billion — and was negotiated over a period of three years. The arrangement went sour after a handful of senators, including Sen. John McCain (R-Ariz.), questioned the deal’s cost.

Former Air Force official Darlene Druyun is serving nine months in prison after admitting that she helped Boeing design the deal while also negotiating to become an employee of the company. Senior Boeing official Michael Sears is serving four months for his involvement.

While the Pentagon painted the Boeing deal as Druyun’s doing alone, Defense Department Inspector General Joseph Schmitz said the deal was engineered by military officials, Boeing executives, and senior White House staff.

Among the findings: Boeing worked with Druyun to draft the legislation awarding the company the lucrative contract; former Air Force secretary James Roche blocked a legally required analysis of alternatives to the lease deal; and Roche and others wrongly testified to Congress that the deal was needed to replace rapidly deteriorating aircraft when those planes actually are usable until 2040.

Former undersecretary of Defense Edward “Pete” Aldridge, who left the Pentagon to serve on the board of Lockheed Martin, was also criticized for improper behavior. Schmitz said his team did not interview Aldridge because he would not respond to phone calls or certified letters, reported the Chicago Tribune.

While the Senate Armed Services Committee welcomed the inspector general’s report at a hearing last week, it also took issue with the report’s extensive redactions and key omissions, noted the Washington Post.

Committee chairman John Warner (R-Va.) expressed incredulity that the Schmitz had delegated all 88 investigative interviews to underlings and that the report included no comments from either Defense Secretary Donald Rumsfeld or his former deputy Paul Wolfowitz, who now heads the World Bank.

“Generally speaking, we interviewed them and we did not find anything relevant to report to tell the story about the 767,” Schmitz told Warner, according to the Tribune.

“You found nothing in your interviews with the secretary of defense and the deputy secretary of defense that was relevant to this report?” Warner disbelievingly asked, calling the scandal “the most significant defense procurement mismanagement in contemporary history.”

Sen. Carl Levin (Mich.), the committee’s top Democrat, also criticized the report for its extensive redactions, noting that Schmitz blacked out 45 sections dealing with White House involvement in the lease negotiations, as well as the names and emails dealing with lawmakers and others involved in the lease.

White House spokesman Scott McClellan last week said the passages were blacked out, even from the classified version available to senators in a secure room, because Schmitz does not have jurisdiction over the White House.

“They only have jurisdiction over their particular agency,” McClellan told the Tribune.

“There is no legal authority that would conceivably justify the redaction of this material from the report,” Levin warned at the hearing. “Critical gaps in this report have placed a cloud over it — indeed, over the inspector general’s office.”