At Boeing, Pay-to-Play is the Rule of the Day
“Boeing is the world’s top manufacturer of commercial airplanes, including the 767 and the 747. The company is also a leading military supplier, making fighter bombers, transport planes and the Apache helicopter. The company regularly lobbies Congress to increase defense spending and to win military contracts, although it lost the $300 billion Joint Strike Fighter contract to rival Lockheed Martin in 2001. Boeing has also supported expanding free trade, especially in Asia, where it hopes to sell more commercial aircraft. The company also pushed for Congress to reauthorize the Export-Import Bank, which gives loan guarantees to businesses. In 2001, Boeing got $2.5 billion from the bank.”
“Defense aerospace contractors concentrate their political donations on members of the House and Senate Appropriations subcommittees that allocate federal defense money. Prime targets of defense aerospace money also include members of the Armed Services committees, who influence military policy and have the power to create demand for this industry’s commodities… During the 2008 election cycle, the industry donated more than $7.5 million to federal candidates, splitting their contributions almost evenly between Republicans and Democrats… Boeing placed a close second to Lockheed in campaign contributions for the 2008 cycle, at more than $2.1 million. Of that, 56 percent went toward Democrats and 43 percent to Republicans.
“The federal government’s selection of Boeing to build the next generation of Air Force aerial refueling tankers comes after years of contentious fighting that’s resulted in sky-high lobbying spending and accelerated campaign contributions to key politicians…. [ In 2010 alone, ] Boeing spent more than $17.8 million on lobbying expenditures, placing it first among companies in the defense aerospace industry… During the 2010 election cycle, Boeing’s political action committee spent more than $2.91 million, donating more than $2.1 million of that amount to federal candidates… Much of this money has gone toward members of Congress who stand to benefit politically from the KC-X tanker program:”
This is not the first time Boeing used payola to pocket an Air Force tanker contract. But thanks to the United States Supreme Court “Citizens United v. FEC” decision, corporations can now make grease payments over the table that used to slide under. Consider, for example, how Boeing won and lost its previous tanker contract:
“In May 2003, the United States Air Force announced it would lease 100 KC-767 tankers to replace the oldest 136 of its KC-135s. The 10 year lease would give the USAF the option to purchase the aircraft at the end of the contract. In September 2003, responding to critics who argued that the lease was vastly more expensive than an outright purchase, the United States Department of Defense announced a revised lease. In November 2003, the Air Force decided it would lease 20 KC-767 aircraft and purchase 80 tankers… Buying one KC-767 outright costs $150 million. The contract called for 100 aircraft being purchased or leased at an aggregate price of $26b, or $260m per plane. Therefore, the contract, if it had been executed, would have forced the DOD to pay Boeing much more money for each plane than it would have had to if the aircraft were purchased individually… In December 2003, the Pentagon announced the project was to be frozen while an investigation of allegations o!
f corruption by [Pentagon purchasing agent] Darleen Druyun (who had moved to Boeing in January 2003) was begun. Druyun pleaded guilty to inflating the price of the contract to favor her future employer and to passing information on the competing Airbus A330 MRTT bid (from EADS). In October 2004, she was sentenced to nine months in jail for corruption, fined $5,000, given three years of supervised release and 150 hours of community service. She began her prison term on January 5, 2005. She was released from prison on September 30, 2005. The ramifications extended to Boeing CFO Michael M. Sears, who was fired from Boeing, and Boeing CEO Phil Condit resigned. On February 18, 2005, Sears was sentenced to four months in prison. Boeing ended up paying a $615 million fine for their involvement. According to The Federal Times, Darleen Druyun will still be receiving a federal pension.”
CBS News called this “the biggest Pentagon scandal in 20 years”, but for Boeing it was just one of many:
And as far as Pentagon scandals go, this one was a drop in the bucket compared to Donald Rumsfeld’s adeptly timed confessions of 10 September 2001: