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Pentagon Admits Tanker Lease Costs $5.5 Billion More, But Defends the Boeing Handout Anyway

September 23, 2003 


A September 22, 2003 letter from Defense Undersecretary Paul Wolfowitz to Senate Armed Services Chairman John Warner (R-VA) and Ranking Member Carl Levin (D-MI) defends the Boeing tanker lease as being a good financial deal, even though he admits that purchasing rather than leasing the tanker "saves 5.5 billion dollars." The letter attaches analyses of the costs of five lease/purchase alternatives, concluding leasing all 100 tankers "balances the urgent needs of the warfighter with the demands of our other vital programs, while staying within our budget."

The letter avoids addressing the highly critical independent analyses by the Congressional Budget Office, The White House Office of Management and Budget and the Institute for Defense Analysis, all of which have overwhelmingly found the leasing deal to be significantly more costly. The letter also avoids directly addressing the Congressional request for a study documenting the need for these tankers based on possible widespread corrosion of the existing tanker fleet.

Sources tell POGO that the Department of Defense Inspector General (IG) is expanding its investigation into the possible inappropriate influence exerted by former and current government officials to broker this deal. The investigation started with Darleen Druyun, former Air Force Acquisition Chief who retired and went to work for Boeing. Now, the IG is reportedly expanding its inquiry into whether retired Navy Admiral David Jeremiah and former Air Force Chief of Staff General Ronald Fogleman, both of the Defense Policy Board, applied undue pressure to seal this deal for Boeing.

"The Pentagon's letter is a slap in the face of Senators Warner and Levin," said POGO Executive Director Danielle Brian. "They offered a reasonable compromise to allow the lease of 25 planes after an independent study of alternatives to the Boeing 767 has been completed. If there is a need for these tankers, Congress should appropriate the money to buy them. The bottom line here is, this lease deal is good for nobody except Boeing. It comes as no surprise that the Inspector General's inquiry is growing. There must have been some sleazy backroom dealing to keep such a bad deal alive." 

Founded in 1981, the Project On Government Oversight (POGO) is a nonpartisan independent watchdog that champions good government reforms. POGO's investigations into corruption, misconduct, and conflicts of interest achieve a more effective, accountable, open, and ethical federal government.

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