Boeing Inquiry Ordered
Defense Secretary Donald H. Rumsfeld said Tuesday that he had asked for a review of an Air Force deal with Boeing Co. to lease tanker aircraft after the company’s dismissal of two executives for alleged misconduct, one of whom was closely involved in the deal.
“We have an obligation to see that things are done properly,” Rumsfeld said of the lease plan. He said he told senior staff members that “they ought to set about looking at it.”
“When something of that nature occurs, one has to step back and say, ‘What is it we ought to be thinking as responsible managers of this department about that, and does it have implications?’ ” Rumsfeld said at a Pentagon briefing Tuesday. “We are the custodian of the taxpayers’ dollar. We have an obligation.”
Boeing on Monday announced the firing of Chief Financial Officer Michael Sears for discussing the hiring of a U.S. Air Force official, Darleen Druyun, while she helped negotiate the proposal to acquire Boeing aerial-refueling tankers. Druyun left the Defense Department last year and later went to work for Boeing, the second-biggest U.S. defense contractor. Boeing fired her along with Sears.
President Bush on Monday signed legislation authorizing $400 billion in defense spending that included letting the Air Force lease 20 Boeing 767 aircraft with plans to buy 80 more through 2017.
Rumsfeld didn’t say how long the review would take or whether it would delay the Pentagon from signing a contract with Boeing. “You don’t say do that in 24 hours,” he said.
Boeing spokesman Douglas Kennett declined to comment on Rumsfeld’s remarks. Air Force spokeswoman Maj. Cheryl Law said the service had no comment.
Boeing shares dropped 63 cents to $38.26 on the New York Stock Exchange.
The lease-purchase plan was a modification of an earlier Air Force proposal that had come under criticism from Sens. John W. Warner (R-Va.) and John McCain (R-Ariz.), the chairman and ranking Republican respectively on the Senate Armed Services Committee.
“The committee will follow the department’s inquiries closely and likely will hold a hearing on the matter once they are completed,” Warner’s spokesman, John Ullyot, said.
The lease plan already is the subject of a Pentagon inspector general’s investigation into whether Druyun, then the Air Force’s No. 2 acquisition official at the time, gave Chicago-based Boeing information in April 2002 from the European Aeronautic Space & Defense Co. related to the lease proposal.
Boeing spokesman John Dern said Monday that Sears hadn’t followed company procedures for hiring government officials. Druyun left the Air Force in November 2002 and joined Boeing in January. The company said its inquiry also found that Sears and Druyun, deputy general manager of Boeing’s missile-defense business, tried to hide their misconduct.
The Air Force said it was “very concerned” with the firings of Sears and Druyun. The division is “examining options in this matter to include asking the Defense Department inspector general or other appropriate authority to investigate the alleged improprieties,” the Air Force said. Meanwhile, Sears on Tuesday resigned from the board at Sprint Corp., where he had served as a director.
The original Air Force plan called for leasing 100 aircraft. Warner, McCain and Sen. Carl Levin (D-Mich.) held up approval of that proposal, saying it was too costly and bypassed regular congressional funding procedures.
They came up with a $27.6 billion proposal that cut the number of planes being leased to 20. The Air Force will add money to its long-range budget to buy 80 more planes. The Pentagon will add $2.41 billion to its budget for fiscal years 2008-2010 and an additional $1.41 billion for 2012 and 2013 to purchase the 80 aircraft.
Boeing would deliver four planes in fiscal 2006, 16 in 2007, 11 in 2008, 12 in 2009, 13 each in fiscal 2010 and 2011. The rate drops to 12 each year in 2012 and 2013 and seven in 2014.
The basic 767 aircraft would be made at Boeing’s Everett, Wash., plant. They would be converted into tankers at Boeing’s plant in Wichita, Kan.
