McCain took the initiative in fighting off the bogus Boeing deal, calling it a corporate bailout and the worst, sleaziest rip-off of the taxpayers that I have ever seen in my 21 years here. McCain vigorously investigated the deal before and after he became chairman of the Airland Subcommittee of the Senate Armed Services Committee. He spent two years trying to obtain incriminating internal e-mails from the company, and its unions launched vicious attacks on him in Arizona during what proved to be an easy 2004 re-election campaign.
When McCain finally received the e-mails, the Boeing tanker deal exploded. The investigation revealed malfeasance, resulting in a $615 million fine for the company. Boeings CEO, Phil Condit, was forced to resign. The companys CFO was sent to prison. Darleen Druyun, who had served as the second-ranking civilian official for Air Force procurement, also went to prison. She pled guilty in 2004 to steering the tanker contract and other deals toward Boeing in the hopes of later securing lucrative jobs with the company for herself and her family members.
After the Air Force announced Feb. 29 that the tanker deal would go to Boeings chief rival, Airbus, Democrats decided to make this an election issue. They are not only faulting McCain for highlighting Boeings wrongdoing, but also turning their own ideological world upside down. Normally incensed by outrageous no-bid military contracts, top Democrats like Rahm Emanuel (D., Ill.) are attacking McCain for stopping a deal that would have needlessly enriched a major corporation at the expense of taxpayers. We are sending the jobs overseas, all because John McCain demanded it, Emanuel told the Associated Press.
Yet Airbus, a foreign company, will still be building most of these tankers in the U.S. in Mobile, Ala., to be precise, and in partnership with the Los Angeles-based Northrop Grumman. The deal with Airbuss military arm (the European Aeronautic Defence and Space Corp., or EADS) will come at a savings of $6.2 billion for taxpayers over the attempted Boeing deal. This raises the question: Are these complainers more interested in helping American companies, or in propping up a company that is long on campaign contributions and lobbying power, but short on economic competitiveness?
Its not as though Boeing doesnt get a lot from the government already which is no surprise, considering that Boeing routinely spends more than $8 million lobbying Congress each year (last year it spent more than $10.6 million), part of it on lobbyist Linda Daschle, wife of the former Senate Majority Leader. Congresss decision to bail out flagging airlines after 9/11 was a guarantee that cash and contracts would keep flowing Boeings way. And Boeing still receives an enormous share of military contracts a 2004 report from the Center for Public Integrity identified Boeing as the second-largest military contractor, with $82 billion in deals between 1998 and 2003.
In addition to the Department of Defense, there exists an entire government agency whose main purpose is to subsidize Boeing. The United States Export-Import Bank made 53 percent of its loans and loan guarantees (in dollar terms) to Boeing between 1998 and 2004, to the tune of $32.7 billion.
Boeing complains, correctly, that Airbus also receives subsidies from both France and the European Union. And because of the contorted methods by which the U.S. government subsidizes Boeing, they argue that their subsidy meets the standards of the World Trade Organization, whereas most European subsidies to Airbus do not. Yet when the taxpayers money is being spent, such technicalities are less meaningful than the bottom line.
The final refuge of those whining over Boeings loss is the fact that Airbus is a foreign corporation, and that the U.S. military is now relying on foreigners to produce necessary military equipment. But for the most part, Americans will be building these planes. Boeing had estimated that it would have created 9,000 American jobs and supported 35,000 others had it received the contract. Airbus is estimating that it will create 2,000 American jobs and support 25,000. Even taking these assumptions at face value, Democrats are trying to convince American taxpayers that it is worth their while to fork over $886,000 for each of the additional 7,000 jobs that Boeing would have supposedly created, or $316,000 for each extra job created or supported.
McCain was not the one who awarded the contract to Airbus, but its a good thing he stopped it from going to Boeing in 2001. If 2,000 American workers not to mention all American taxpayers can benefit from subsidies provided by European governments, then why in the world should we not take advantage?
David Freddoso is an NRO staff reporter.
They should have bought Boeing.
Good find.
Actually a good story about McCain. Yay!
I live in the Seattle area and Boeing is still a major part of our economy. That said, I like to let the chips fall where they may on these stories. If Boeing is wrong, they are wrong.
As more and more stories emerge on this story, it appears that Boeing SHOULD HAVE lost this contract.
McCain is like Jimmy Carter. Every intention is good,
yet the end result is a godawful mess.
Then, with this new information before me, I must re cant and take back my criticism of Johnny on this issue. The other stuff still stands. (McCain-Feingold,McCain-Lieberman gas tax bill, McCain-Kennedy and the Path to citizenship, etc..)
I can’t understand the DemocRATS. Isn’t this a great deal for our European Allies that we need to get respect from again? You’d think the RATS would be lauding Bush for trying to mend the ties with our European Allies. Instead they are more worried about getting their palms greased by Boeing.
To David. Good story. What worries me is the money Boeing and EADS spend on lobbying. Boeing $10 million in 2007 and EADS paid to two lobbying firms, employing prominent supporters of McCain, that is $220.000 to the Loeffler Group, $240.000 to Ogilvy Government Relations and $320.000 to Fierce, Isakowitz & Blalock.Lobbyists can play a useful role to help a company understand how a government operates. But the situation in Washington has gone completely out of hand. The future president of the USA should initiate and pass legislation limiting the activities of lobbying firms. What do you think?