Making Money on Terrorism (Page 2)

On the desperation front, Boeing is head and shoulders above its rivals. After losing the highly touted "deal of the century"--the $300 billion F-35 Joint Strike Fighter program--to its rival Lockheed Martin in 2001, the company took a huge hit to its commercial-airliner business when air travel plummeted in the wake of the September 11 attacks. A bailout was in order, and the company pulled out all the stops to create one in the form of a deal that would have required the Air Force to lease 100 Boeing 767s for use as aerial refueling tankers. As initially crafted, the deal would have cost $26 billion over a decade, $5 billion more than it would have cost to buy the planes outright. Behind it was a group that included Senator Ted Stevens, who used his clout as chair of the Senate Appropriations Committee to insert an amendment into the Pentagon's budget specifically requiring the lease arrangement; Secretary of the Air Force James Roche, a former VP at Boeing's sometime partner Northrop Grumman; Boeing senior vice president of Washington operations Rudy deLeon, a former top official in Bill Clinton's Pentagon; and House Speaker Dennis Hastert. Like most pork-barrel projects, the deal was a mix of strategic thinking and self-interest. Roche made no bones about the fact that part of the point was to throw some money Boeing's way so that it would remain healthy. What you and I might call a "bailout," folks in the Pentagon call "maintaining the defense industrial base."

Boeing used every possible lever to get the deal done. It hosted a fundraiser in Seattle for Stevens at which Boeing executives threw $22,000 into his campaign coffers. It enlisted Hastert, who had wooed the company to move its headquarters to his home state of Illinois, to weigh in directly with President Bush. Representative Todd Tiahrt, whose Wichita district includes the Boeing plant that would retrofit the 767s for use as tankers, raised the issue so often with Bush that the President nicknamed him "Tanker Tiahrt." Members from Washington State, home of Boeing's main production complex, also lobbied vigorously. Defense Policy Board member and Rumsfeld pal Richard Perle wrote an op-ed in favor of the deal for the Wall Street Journal--but only after Boeing had invested $20 million in Trireme, a Perle investment firm. Boeing sponsored the 2001 annual dinner of the Jewish Institute for National Security Affairs, a neocon redoubt with which Under Secretary of Defense Douglas Feith was closely associated before joining the Administration. The honorees were the secretaries of the three military services: The Air Force's Roche, Navy Secretary Gordon England (formerly of General Dynamics) and Army Secretary Thomas White (formerly of Enron). The host for the evening was Boeing Washington office head Rudy deLeon.

For once all this influence-peddling may go for naught. The deal is on hold thanks to relentless questioning by Senator John McCain, who has denounced it from the beginning as "war profiteering," and persistent public pressure by good-government groups. The last straw was the revelation that Boeing offered Air Force acquisition official Darleen Druyun a job while she was negotiating the lease deal with the company.

Boeing isn't the only corrupt weapons company; it's just the one that was too desperate for a short-term payoff to cover its tracks. Rumsfeld's preference for industry executives and ideologues of the Perle/Feith variety has created an ethically challenged, politically tone-deaf environment that needs to be opened up to public scrutiny and reform. Some steps are under way. The Pentagon's Inspector General is investigating all Boeing contracts that Druyun was involved in. The Senate Armed Services Committee will hold hearings on the Boeing deal, and McCain has promised hearings on the Pentagon-industry "revolving door."

Much more needs to be done. At the height of World War II, Senator Harry Truman made a name for himself by uncovering profiteering and fraud at companies providing supplies for the war effort. Given the high political and economic stakes in the war on terror, a comparable investigation is in order now. Whether the work is being done in Iraq, Washington or points in between, contracts involving US national security should be opened to true competitive bidding. Profits should be limited, and the books of contractors doing the public's business should be open and available for inspection. Politicians and bureaucrats who are lining their pockets under the guise of fighting terrorism should face criminal penalties, not symbolic fines. The public should demand that all candidates for the presidency and Congress renounce campaign contributions from companies involved in the rebuilding of Iraq, the war in Afghanistan or any of the other far-flung outposts of Bush's war on terrorism.

The culture of cronyism that allows arms-industry executives to pull down multimillion-dollar compensation packages while wounded veterans are shunted into makeshift medical wards has to end. Getting rid of George W. Bush and his gang of neocon profiteers is an excellent place to start. But it's only a start.

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