Northrop Tanker Deal Will Cost U.S. Taxpayers Billions

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• The contract to EADS could cost U.S. taxpayers as much as $30 billion in unneeded costs.
• Known as the KC-30, the aircraft EADS is less capable, can land in fewer bases and is more vulnerable to being downed by enemy fire.
• The KC-30 is being financed with illegal subsidies, according to a near-unanimous consensus of legal experts in the United States and leaders of both political parties.
• The Defense Department made questionable midstream changes in the procurement criteria that it has not explained to Congress to date.
• EADS won exemptions from key national security laws, including those that restrict the export of sensitive military technologies developed with U.S. funds.
• EADS has very questionable relationships with Iran, Russia and others that should be of concern to policymakers tasked with protecting our national security.

Compared with the model EADS would build, the Boeing version produces 25 percent less carbon dioxide-reducing greenhouse gases and offers a 24 percent fuel savings—costs borne by taxpayers.

At a meeting in Everett, Wash., where more than 300 Boeing workers joined with the state’s congressional delegation, Gov. Chris Gregoire and other elected officials to call on the Air Force to take another look at its decision, Rep. Rick Larsen (D-Wash.) told the crowd the only way EADS operates is with subsidies the United States says are illegal. In fact, even as the $40 billion contract is being handed over, the federal government is aggressively pursuing legal action against EADS at the World Trade Organization for getting grants and loans at unfairly favorable rates.

The contract also raises national security issues. Workers at Boeing—members of the Machinists (IAM) and the Society of Professional Engineering Employees in Aerospace/IFPTE Local 2001 (SPEEA)—undergo security checks and rigorous background clearances. But it is unclear if the European workers, as well as immigrants who are hired to build the scattered parts of this crucial piece of military equipment prior to its final assembly, will be vetted in the same way.

IFPTE Secretary-Treasurer Paul Shearon nicely summed up the situation.

No one is arguing that this decision should be made because of domestic economic considerations alone. But every sober analysis of the tanker award shows that after considerable lobbying by this foreign contractor, its minority U.S. partner, and Senator John McCain, the DoD buckled to their pressure and made decisions that will leave U.S. workers, taxpayers and soldiers out in the cold. We are confident that upon closer reflection, the Congress will reverse this ill-fated decision.

As Christy has shown here, the senator from Arizona, John McCain, played a crucial role in blocking the deal to build air tankers from going to U.S.-based Boeing. Citing Sam Stein over at the Huffington Post, Christy writes:

In January 15, 2007, McCain appeared at Alabama Gov. Bob Riley’s gubernatorial swearing in ceremony and formally called for multiple bidders in the tanker deal. The push for an open process had only one true beneficiary, however, and that was the Northrop Grumman/EADS consortium, which was poised to be Boeing’s sole competitor.

A day after McCain made his proclamation, the contributions began to flow. John Green, a lobbyist for EADS donated $2,100 to the senator’s presidential campaign. Ten days after that, Michelle Lammers, the “Chief of Staff” for EADS North America, gave $250 to the McCain campaign. It was her first political contribution ever. Less than a month later, the long-time head of EADS’ government affairs program, Samuel Adcock, made a $2,100 donation to McCain. And eleven days later, Ralph Crosby, the head of EADS North America, donated $2,300 himself.

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