Rummy and Boeing

[Eubulides <paraconsistent@xxxxxxxxxxx>]

[Financial Times]
Rumsfeld orders Pentagon probe into Boeing
By Marianne Brun-Rovet in Washington and Peter Spiegel in London
Published: November 25 2003 23:19 | Last Updated: November 25 2003 23:19


Donald Rumsfeld, US defence secretary, on Tuesday asked Pentagon staff to
look into the dismissal of two senior Boeing executives and its impact on
an air force deal to lease and buy 100 Boeing 767 aircraft as air-to-air
refuelling tankers.

The probe may delay the air force plan to lease 20 and buy 80 aircraft,
although the deal is part of the defence spending bill that president
George W Bush signed into law on Monday.

But Mr Rumsfeld said at a briefing he had asked senior Pentagon staff to
ask themselves whether the contract should be delayed until the Pentagon
had reviewed it.

"Does it have implications in any way for things that we're doing or
thinking about doing?" Mr Rumsfeld said he asked staff. "We're the
custodians of taxpayers' dollars. We have an obligation to see that things
are done properly."

Boeing on Monday fired chief financial officer Mike Sears after
discovering he had tried to hire Darleen Druyun, a US Air Force official,
while she was responsible for Boeing-related business.

Ms Druyun had overseen the competition for the $22bn Pentagon deal to
lease 100 Boeing aircraft. Boeing won the contract and Ms Druyun became a
Boeing vice-president shortly after.

But the senate's armed services committee forced the Pentagon to modify
the deal after fierce criticism from John McCain, the Arizona senator. Mr
McCain's campaign helped to launch an investigation by the Pentagon
inspector-general into whether Ms Druyun gave Boeing proprietary
information about a rival's bid for the tanker contract. The US Air Force
on Monday said it was considering asking for a further probe.

Meanwhile, leaders of a consortium offering the British defence ministry
19 Boeing 767s yesterday sought to distance themselves from the scandal.

Keith Archer-Jones, head of the TTSC consortium, said the American deal to
sell the US air force 100 new Boeing 767s was a "radically different
proposition" from his proposal to the Royal Air Force, which calls for
revamping existing 767s owned by British Airways.

TTSC is owned in equal parts by Boeing, BAE Systems, and UK-based service
provider Serco, and - as in the US - pits Boeing-made 767s against
Airbus's A330.

The £13bn ($22bn) contract is the largest outsourcing deal in the defence
ministry's history.

Officially, the ministry insisted this week that the firing of Mr Sears
and Ms Druyun would have no effect on the outcome of the UK deal. But
privately, one government official acknowledged that the problems at
Boeing could complicate the decision-making process.