EADS Lobby May Have Assisted Senator In Original KC-X Bid
With Boeing's protest to the KC-X
aerial tanker contract award to EADS being sustained by the
Government Accountability Office (GAO) last Wednesday, eyes are
falling onto some recent correspondence from John McCain that may
turn around and bite the presidential candidate according to a
Newsweek article on June 21.
McCain (right) spearheaded the effort to originally block the
Pentagon contract with Boeing in 2003 after a probe led by him
uncovered cozy relations between top Air Force officials and Boeing
executives – later landing a top USAF officer and a Boeing
CFO in prison. McCain asserted his quest to create “good
government” saved taxpayers more than $6 Billion after the
Air Force cancelled the contract which he called a “rip
As reported by ANN, the GAO concluded
“the Air Force had made a number of significant errors”
when it rebid the tanker contract and awarded the $35 Billion
project to the EADS and Northrop Grumman team. The Air Force will
likely need to redo the bid for a second time, further delaying the
replacement for the aerial refueling fleet still using 1950’s
vintage KC-135 aircraft.
According to Newsweek, the GAO ruling has also cast light on an
aspect of McCain’s crusade many have overlooked: five of his
top presidential campaign advisers and fund-raisers were registered
lobbyists for EADS -- including Tom Loeffler, former finance
co-chairman, and Susan Nelson, his finance director.
Critics cite as evidence of the potential conflict, two strongly
worded letters from McCain to Deputy Secretary of Defense Gordon
England in 2006 and another to Robert Gates prior to his
confirmation as Defense secretary.
The first letter, dated September 8, 2006, McCain explained
hearing from “third parties” that the Air Force was on
the verge of redoing the tanker competition and factoring in
European government subsidies to EADS – an issue which would
seriously hurt the EADS bid. McCain urged the subsidy factor be
dropped from consideration and posed a series of specific technical
questions about the Air Force’s bidding process.
"He was trying to jam us and bully us to make sure there was
competition by giving EADS an advantage," said one senior Pentagon
official to Newsweek, asking for anonymity when discussing the
politically sensitive matter.
The official added, within the Pentagon, it was assumed
McCain’s letters were drafted by EADS lobbyists. "There was
no one else that would have had that level of detail” they
Newsweek adds, a Loeffler associate noted that he and Nelson
were retained by EADS after the letters were drafted.
Chris Paul, McCain's top aide on the issue, wrote in an e-mail
to the magazine that "the letters.. were absolutely not provided,
or drafted, by EADS or Northrop Grumman or.. submitted on their
behalf. Those letters arose from, and reflect, Senator McCain's
longstanding interest in... full and open competition." The McCain
camp further barred Paul from answering follow-up questions about
whether McCain had input from EADS lobbyists on the letters or
about the identity of the "third parties" he had mentioned.
McCain reinforced last week his "paramount concern" was "that
the Air Force buy the most capable aerial refueling tankers at the
most reasonable cost." Analysts question whether the controversy
over the rebid process, the subsequent replacement delay, and the
higher costs that will result make McCain’s efforts worth
"This shows how a sort of naive crusade for good government can
actually backfire," said Loren Thompson, of the Lexington
Institute, a defense think tank.