Senate Panel Probes Boeing-Air Force Deal

The Senate Armed Services Committee receives a report from the Pentagon's Inspector General on a scandal involving the Air Force and Boeing. A deal between the two collapsed last year amid allegations of sweetheart deal-making — a Defense Department official went to jail as a result. Now, the Senate panel will look at the role of higher-ranking Pentagon officials.

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Today, the Senate Armed Services Committee receives a report from the Pentagon inspector general, the subject being the scandal involving the Air Force and The Boeing Company. The Air Force planned to lease mid-air refueling tankers built by Boeing. That deal collapsed last year following allegations of sweetheart deals. Now the Senate panel will look at the role of higher ranking Pentagon officials in this scandal. NPR's Peter Overby reports.

PETER OVERBY reporting:

The Pentagon and its friends have framed the scandal as essentially a one-person problem. That person was Darlene Druyun, once the chief procurement official for the Air Force, then hired as a Boeing executive and now serving a nine-month prison term. Her crime? Sweetening the tanker deal and others in exchange for personal favors including her job at Boeing. Here's how Defense Secretary Donald Rumsfeld put the case last November.

Secretary DONALD RUMSFELD (Department of Defense): Over time, I'm told what she did was acquire a great deal of authority and make a lot of decisions. And there was very little adult supervision above, below or on the side.

OVERBY: But in today's report, the Defense Department's inspector general makes it clear the scandal wasn't just about one person's actions. A Boeing executive also went to prison. At the Department of the Air Force, two top political appointees lost their jobs. Sources told NPR yesterday that the inspector general also turned up White House correspondences about the Boeing deal, but the names of the administration staffers have been blacked out. POGO, the Project On Government Oversight, is a watchdog group that's been critical of the Boeing lease deal. POGO Director Danielle Brian says that when Darlene Druyun was helping Boeing make the lease happen, she wasn't working in a vacuum.

Ms. DANIELLE BRIAN (POGO Director): This is a system that is really so open to abuse, including, you know, having congressional pressure to buy things that the military doesn't need.

OVERBY: In this case, congressional pressure came from three committees. Even President Bush said he supported the leases before the Senate Armed Services panel put the brakes on. The emerging analysis is that the Boeing lease deal moved ahead so easily for two reasons. First, cuts in Pentagon procurement oversight and, second, relaxed rules for procurement. Both the Clinton and current Bush administrations have promoted commercial purchases, acquisitions made just on price without the government's traditional examination of costs. Now critics say the commercial approach might work for T-shirts but not for weapons systems. At the Pentagon, Air Force spokesman Doug Karas says the department won't try to acquire any more weapons systems by lease.

Mr. DOUG KARAS (Air Force Spokesman): We are good stewards of the taxpayer dollar and that we will, you know, provide good value to the war fighters and to the taxpayer whenever we're acquiring a system.

OVERBY: The Senate Armed Services Committee is writing that reform and some others into next year's defense authorization bill. There are no plans for a big comprehensive military procurement reform bill, but the pendulum is swinging back towards more controls.

Peter Overby, NPR News, Washington.

INSKEEP: This is NPR News.

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