Rules Circumvented on Huge Boeing Defense Contract [View All]

Rules Circumvented on Huge Boeing Defense Contract

By R. Jeffrey Smith and Renae Merle, Washington Post Staff Writers

The Boeing Co.'s campaign to win federal backing for a lucrative new military airplane contract was in trouble in October 2002. The head of the Office of Management and Budget had just told the Air Force and Congress that the acquisition plan -- which featured the most costly government lease in U.S. history -- was not urgent and would squander billions of dollars.

Then White House Chief of Staff Andrew H. Card Jr., acting at what officials say was the direction of President Bush (news - web sites), told the Air Force and OMB to resolve their differences. Bush had been lobbied hard by House Speaker J. Dennis Hastert (R-Ill.) and Rep. Norman D. Dicks (D-Wash.), whose districts are in states that include, respectively, Boeing's headquarters and a key production facility.


Given the depth of the speaker's feelings about it, Bush really hoped something could be worked out, Card told others, according to a participant in the internal deliberations. And with Card's intervention, obstacles to the deal eventually fell away. Vehement objections raised by OMB and Pentagon (news - web sites) budget analysts -- that the planes were too expensive and that leasing would set a bad precedent -- were muted or withdrawn.


Card's intervention was but one fruit of a two-year lobbying campaign, mounted jointly by the Air Force and Boeing, that has brought the $21 billion to $25 billion deal within one congressional hurdle of being passed. An examination of that campaign, based on dozens of interviews and thousands of internal e-mails Boeing surrendered to the Senate Commerce, Science and Transportation Committee, shows how Boeing circumvented the usual route of Pentagon acquisitions -- and, with it, many of the rules and regulations enacted over the past three decades to forestall defense contracting abuses.


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