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<< Previous   of   Next >>   ADVERTISEMENT   CONTACT THE HERALD Mike Benbow, Business Editor benbow@heraldnet.com   Published: Wednesday, April 9, 2008 Tanker deal: Northrop had help of public interest group Citizens Against Government Waste tried to influence decision makers on the tanker, saying Northrop-EADS offered taxpayers the best deal. The Washington Post WASHINGTON -- It was billed as a coalition of public interest groups focused on the recent $35 billion contract award for a new Air Force refueling tanker. Officials at Citizens Against Government Waste, a quarter-century-old group founded as a good-government advocate, wanted other groups to join in speaking out in favor of the "open, fair and transparent" process that gave the award to Northrop Grumman and its partner, European Aeronautic Defence and Space. But as often happens in this town, the story was not so clear cut. It turns out Citizens Against Government Waste, or CAGW, was playing a more complicated advocacy role on the same side as the Northrop team, in an immense struggle over the deal with surprise loser Boeing. Welcome to that special place where business and Washington intersect, where things often are not what they seem and keeping track of the players and their motives is as hard as following aces in the hands of a cardsharp. In the weeks since the Feb. 29 decision, the winners, the loser and their proxies have worked nonstop to tilt the advantage their way. They have bought full-page ads in newspapers and trade magazines across the country. Boeing has spent about $3 million on ads in major papers since its loss, according to sources who spoke on condition of anonymity because they were not authorized to discuss the ad campaign. The companies have engaged top-shelf public relations specialists, opinion shapers and former military officials who now serve as their consultants. And they have enlisted vocal and sometimes stealthy support from policy and nonprofit groups, endorsements that carry the aura of integrity. Enter CAGW. In an e-mail recruiting support from the other groups last week, CAGW included a "fact sheet" spelling out why the award to Northrop was in the best interests of the American taxpayer. Parts of it were cribbed almost word for word from a Northrop document. The same e-mail said that CAGW would hold a meeting last Friday to explain the coalition. The man brought in to explain the effort was William Lauderback, a veteran lobbyist and communications consultant who has told multiple people that he is working on this issue for Northrop. Calls to Lauderback's office were referred to a Northrop official, who said it is company policy not to identify consultants or their activity on behalf of the company. Further confusing matters, officials at CAGW told a reporter they had no ties to Northrop, financial or otherwise. CAGW president Thomas Schatz declined to discuss whether his group has received contributions from Northrop. He said the fact that his group's interests are aligned with those of the Northrop team means nothing. "The beneficiaries of our advocacy are the taxpayers," he said. A Northrop spokesman said CAGW had approached the company with offers to help. And documents show they are working together on the issue. "This is yet another example of the way Washington, D.C., resolves issues. They don't rely on facts. They rely on lobbyists posing as analysts, and on hired guns," said Winslow Wheeler, director of the Straus Military Reform Project at the Center for Defense Information, and a former longtime Senate staffer. "It's standard behavior." There's typically no way to determine who is giving money to nonprofit groups, unless the groups decide to say. Danielle Brian, executive director of the Project on Government Oversight, said nonprofit organizations that advocate good government are taking sides on this contract in a way she has not seen before. "I can't remember a case where public interest groups have become such vocal, aggressive advocates on behalf of corporations," said Brian, adding that CAGW asked her group to join the effort, an offer she declined. "There's so much money flying around on this issue. I suspect it is playing a significant role in some cases." Much is at stake. The Air Force has called the deal to replace 179 of its refueling planes -- which have been in service for a half-century -- its top acquisition priority. And the $40 billion price tag is just a starting point. Over the next few decades, the deal could be worth up to $100 billion as the Air Force replaces its entire fleet of 500 tankers. It also means allowing a European company to play an unusually large role in U.S. defense. The reaction to the contract's award to the Northrop-EADS team -- and Boeing's unexpected loss of the contract -- has stimulated fervent, patriotic, even nationalistic rhetoric. Congressional leaders in Washington state and Kansas, where Boeing has major facilities and close ties to lawmakers, have demanded that the Air Force reconsider its decision. Rep. John Murtha, D-Pa., chairman of the Appropriations defense subcommittee, threatened to cut off funding for the tanker. "This is not a done deal," Murtha declared, opening the way for the unusual possibility of Congress overturning a contract decision by the government's procurement specialists. All eyes are now focused on mid-June. That's when the Government Accountability Office will rule on a contract protest by Boeing, which claimed there were flaws in how the Air Force selected Northrop's tanker. Last week, the Air Force and Northrop filed counter-motions for the GAO to dismiss Boeing's protest. The counter-motions were denied. "This is going to be with us at least until the November elections, if not beyond," said Richard Aboulafia, an aviation analyst with Teal Group, which is an aerospace consultant that says it has no stake in the fight.

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