McCain Seeks Pentagon Delay on Boeing Lease Agreement
Sen. John McCain (R-Ariz.) wants the Air Force to withhold approval of a $16-billion lease deal with Boeing Co. until investigations into the aircraft maker’s conduct in an unrelated missile program are finished.
“In order for the government to protect the taxpayer’s interest, it is appropriate for the Air Force to withhold the lease agreement until it and the Justice Department have concluded their current investigations,” McCain, chairman of the Senate panel that oversees airline regulation, wrote in a July 2 letter to Defense Secretary Donald H. Rumsfeld.
The Justice Department and Air Force are conducting separate inquiries into whether the No. 2 defense contractor illegally used documents from Lockheed Martin Corp. to beat its rival in 1998 for a majority share of military rocket launches in a new booster program. Lockheed Martin is the top U.S. defense contractor.
McCain’s letter is the latest complication for Boeing’s tentative deal to lease 100 aerial refueling tankers to the Air Force to bolster the service’s aging fleet. The deal had backing from Air Force and Pentagon officials, though the Defense Department hasn’t submitted it yet for formal approval by the Office of Management and Budget and by Congress.
Asked about McCain’s request, Boeing spokesman Doug Kennett said, “It would be inappropriate for Boeing to comment on a letter between a senator and senior member of the administration.”
Boeing has been relying on military sales to weather declines in commercial aircraft deliveries. The company has said commercial plane deliveries would fall by 27% this year to 280.
Under the agreement with the Pentagon, the Air Force will have the option to buy the refueling tankers for $4 billion, or $138 million per plane, after the leases expire. Boeing will lease each plane individually for six years starting from 2006 through 2011, with the final lease expiring in 2017. The company agreed to a 15% per-aircraft profit cap.
The Justice Department last month charged two former Boeing employees with illegally obtaining the Lockheed Martin documents that may have helped Boeing win a $2-billion contract to develop and provide the majority of launches in the new Evolved Expendable Launch Vehicle rocket program.
