Two U.S. senators seeking review of Boeing 767 deal

SEATTLE -- Two U.S. senators on Friday urged the Defense Department to postpone finalizing a contract with Boeing Co. to acquire 100 air-refueling tankers in light of the recent dismissals of two top Boeing executives.

In a letter to Defense Secretary Donald Rumsfeld, Sen. John McCain, R-Ariz., and Sen. Peter Fitzgerald, R-Ill., said "it would be irresponsible" for the department to go ahead without a full review into whether the Boeing executives, who were fired for alleged unethical behavior, improperly affected negotiations in the multibillion-dollar deal.

The letter also pointed to internal Boeing e-mails about the deal, which seem to suggest that Boeing was getting a good deal at the expense of taxpayers, the senators wrote.

The agreement, in which the Air Force would lease 20 Boeing 767 tankers and buy another 80, was authorized as part of the defense appropriations bill signed Monday by President Bush. But Boeing and the Pentagon still need to complete the contract.

McCain and Fitzgerald have long been critics of earlier proposals for acquiring the tankers. The initial agreement called for the Air Force to lease all 100 planes. The compromise to lease 20 and buy 80 is expected to cut as much as $5 billion off the $21 billion cost.

Rumsfeld himself said Tuesday the deal might be worth looking into in light of the recent firings. But the Defense Department has not yet received the senators' letter and could not comment, said spokesman Lt. Col. Barry Venable.

Not only would a review further delay the long-awaited deal, but it also comes at a tough time for the 767 jet production line. Orders from airlines for the widebody jet have dried up and Boeing's backlog of jets to be built had dropped to 26 as of October, according to Boeing's Web site. Production on the first of the tanker jets has been expected to begin in January.

The latest twist in the two-year-long effort to promote the 767 tankers to the Air Force stems from Boeing's sudden dismissal Monday of its chief financial officer, Mike Sears, and a vice president, Darleen Druyun.

Boeing said the two violated company policies by discussing a job for Druyun at Boeing while she was still employed by the Pentagon and was in a position to influence Boeing contracts, including the 767 deal. Boeing also contends the two tried to cover up their misconduct.

Separately, the Pentagon's Office of the Inspector General has been looking into allegations that Druyun acted improperly in giving Boeing financial information about a competing bid by Airbus. The senators said the Pentagon should reassess the tanker deal in conjunction with the results from the inspector general's inquiry.

The letter also cited e-mails between Boeing officials that the senators said suggest a conflict of interest on Druyun's part.

"(U.S. Air Force) wants us to support their language for an operating lease," said one e-mail dated Oct. 12, 2001, from a Boeing official to Sears. "Darleen will make the actual contract favorable and is willing to go to the financial market with us to stress the low risk in such a lease with the USAF. I think we should support her plan." Druyun was employed by the Defense Department until earlier this year, when she joined Boeing.

"Documents that we have reviewed suggest that while she was serving as the Air Force's chief negotiator for the tanker acquisition, Ms. Druyun may have advanced Boeing's interests to the detriment of our military needs and the interests of taxpayers," the senators wrote in their letter.

Sears has denied any misconduct. Efforts to reach Druyun on Friday by telephone were unsuccessful.

Boeing spokesman John Dern said the company has not yet seen the letter and declined to comment on its contents or the possible implications. "We continue to work hard toward an agreement," he said, referring to finalizing the contract with the Pentagon.

Todd Webster, a spokesman for Sen. Patty Murray, D-Wash., a longtime backer of the plan, said the deal has been analyzed enough.

"This deal has been looked at six ways to Sunday," Webster said. "It's been scrutinized, analyzed, picked over, picked through. There's little left to look at."

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