Tanker terms may change

  • Bryan Corliss / Herald Writer
  • Tuesday, March 16, 2004 9:00pm
  • Business

Boeing’s backers in Congress were optimistic Tuesday about a news service report that a Pentagon investigation has found no reason to scrap the 767 tanker deal with the U.S. Air Force.

The report "contains what a lot of us already know," said U.S. Sen. Patty Murray, D-Wash. "It says we need this airplane, and there is no reason to stop it from moving forward."

It’s "good news for Boeing workers in Everett," Murray added.

Fellow Washington Democrat Sen. Maria Cantwell agreed.

"I continue to believe that there is no reason to slash the tanker program," she said. "Yes, some things still have to be worked out, but at least we’re moving forward in the debate."

The report by Bloomberg News was said to be based on a draft of a paper by the Pentagon’s inspector general. According to the news service, the report found "no compelling reason" to scrap the tanker deal, although it did suggest renegotiating the terms because of some "unsound acquisition and procurement practices" involved.

Boeing fired chief financial officer Michael Sears and former Pentagon weapons buyer Darleen Druyan last fall after determining that Sears had offered Druyan a Boeing job while she was negotiating on behalf of the Air Force.

On Tuesday, congressional staffers said they had been unable to track down copies of the inspector general’s report. That office is one of four within the Pentagon investigating the tanker deal. Their reports are expected to be released in May.

In addition, the federal Securities and Exchange Commission is investigating whether Boeing properly warned investors of the potential conflict of interest.

The draft report was one of the day’s hot topics around the Capitol.

But so far, "nobody’s seen it," said Abbey Blake, spokeswoman for U.S. Rep. Rick Larsen, D-Wash.

Analyst Richard Aboulafia, who works for the Teal Group in the suburbs of Washington, D.C., said the report seems to have all the earmarks of a political compromise.

A report like this would satisfy tanker deal opponents — namely Sen. John McCain, R-Ariz. — by suggesting that there have been missteps that need to be corrected. However, Aboulafia added, it still allows the deal to proceed.

"This would be a good point for everyone to declare victory and go home," the analyst said.

According to Bloomberg News, the report questions the logic of leasing the first 20 tankers and buying the remaining 80.

It also concludes that the Air Force tailored its specifications for the KC-767 so they closely matched the tankers Boeing is building for the Italian air force, because Boeing could supply them quickly. As a result, the planes would not meet the requirements for operating with U.S. Navy or Marine Corps planes, Bloomberg said, quoting the report.

A Boeing spokesman said the company had not seen the inspector general’s report or been briefed on it, and therefore could not comment.

Reporter Bryan Corliss:

425-339-3454 or

corliss@heraldnet.com.

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