Calls for End to "Corporate Welfare Scam"

In advance of the September 4 Congressional hearing on proposed lease of Boeing tankers to the Air Force, a watchdog group is barking long and loud about "corporate welfare" to the aviation giant.

The Council for Citizens Against Government Waste (CCAGW) sent a letter urging the Senate Armed Services Committee to reject the wasteful and unnecessary arrangement. Excerpts from the letter, signed by CCAGW President Tom Schatz, follow:

"As the Senate Armed Services Committee prepares to hold a hearing on the recent Air Force contract agreement to give Boeing $17.1 billion to lease 100 767 re-fueling tankers, the more than one million members and supporters of the Council for Citizens Against Government Waste (CCAGW) urge you to oppose this arrangement.

"The tanker lease deal is expensive, unnecessary, budget- busting, scandalous, and the worst example of corporate welfare in recent memory. It also violates federal law and sets an ominous precedent for similar deals in the future. With the deficit at $480 billion and our troops facing danger around the world, the Armed Services Committee is the court of last resort to end this outrageous waste of tax dollars.

"Reports from both the General Accounting Office (GAO) and the Congressional Budget Office (CBO) reveal that the cost of leasing would be substantially higher than either upgrading the 127 existing KC-135E tankers or directly purchasing tanker aircraft. According to a May 2002 GAO report, the cost to upgrade, modernize and repair planes the Air Force already owns would be approximately $3.2 billion, a difference of $13.9 billion.

"An August 26 CBO report asserts that the lease plan could cost as much as $2 billion more than buying the planes outright, in contrast to the Air Force's grossly inadequate estimate of $150 million. CBO further states that this proposed leasing transaction would be no different from an outright purchase, only at a greater cost and with nothing to show for the investment because at the end of the lease the tankers will be returned to Boeing, unless the Air Force opts to buy the tankers at the end of the $17.1 billion lease at an additional $4 billion.

"That brings the total to $21.1 billion. If the Air Force truly deems these planes as necessary to its mission, it should procure them like any other major weapon system and reduce spending elsewhere in its budget in order to accommodate its priorities.

"Perhaps the most disturbing aspect of this lease arrangement is that it violates contracting and procurement rules. CBO has concluded that the proposal does not meet the conditions for an operating lease described in the Congressional Scorekeeping Guidelines, and in OMB Circular A-11. It therefore does not comply with the terms of Section 8159 of the Fiscal 2002 Department of Defense Appropriations Act, which authorized the pilot program to lease the aircraft. Should the Armed Services Committee agree to the lease, it would violate these laws and regulations and open the floodgates for similar questionable deals in the future.

"The Boeing lease deal undermines the integrity of the procurement process. By ignoring the findings from GAO and CBO, Congress will be exposing precious defense dollars to increased waste, fraud and abuse. Every dollar wasted at the Pentagon jeopardizes the safety and well-being of all our men and women in uniform. We urge you to oppose the tanker lease deal to protect the nation's fiscal health, and ensure that the integrity of the Defense Department and the procurement process remain intact."

The Council for Citizens Against Government Waste is the lobbying arm of Citizens Against Government Waste, the nation's largest nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, abuse, and mismanagement in government.

FMI: www.cagw.org