Pentagon investigations stir the pot on Capitol Hill

The Pentagon’s announcement this week that eight additional Air Force contracts are under investigation has watchdogs on Capitol Hill clamoring for more intense congressional scrutiny of defense deals. A small band of lawmakers led by Sen. John McCain (R-Ariz.) has been pushing for Pentagon acquisition reform for more than three years, after uncovering illegal and unethical contract negotiations between the Air Force and Boeing over a $23 billion deal to lease aerial refueling tankers.
The Pentagon’s announcement this week that eight additional Air Force contracts are under investigation has watchdogs on Capitol Hill clamoring for more intense congressional scrutiny of defense deals.

A small band of lawmakers led by Sen. John McCain (R-Ariz.) has been pushing for Pentagon acquisition reform for more than three years, after uncovering illegal and unethical contract negotiations between the Air Force and Boeing over a $23 billion deal to lease aerial refueling tankers.
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An Air Force plan to lease Boeing jets and use them as refueling tankers is among several controversies under investigation.


Monday’s announcement is just the latest in several investigations under way in the Defense Department and Congress. The Pentagon inspector general will now review all eight contracts, on top of seven others already under scrutiny.

Aside from deals with Boeing, the latest list includes two contracts awarded to competitor Lockheed Martin, and one each to Andersen Consulting and Systems & Electronics Inc.

For Pentagon officials, the announcement marked a complete scrub of 10 years of contracting conducted by Air Force acquisition chief Darleen Druyun, who is serving nine months in jail for violating federal conflict-of-interest laws. She left the Air Force in 2002 to take a senior-level job with Boeing.

The long saga of corruption between Boeing and the Air Force is considered one of the biggest procurement scandals in the Pentagon’s history, sparking a slew of government and industry resignations, including Boeing Chief Executive Phil Condit and Air Force Secretary James Roche.

On Feb. 18, a former Boeing chief financial officer, who has pleaded guilty to violating the same conflict-of-interest laws as Druyun, will be sentenced in federal district court in Arlington, Va. And by Friday, the Government Accountability Office will decide whether the government should overturn two multibillion-dollar contracts — one for a C-130 cockpit upgrade, the other for the small-diameter bomb — awarded to Boeing over Lockheed Martin in 2001 and 2003.

But the string of events this week likely will not silence critics in Congress, who plan to push for more reform.

“Where there’s smoke, there’s fire,” one congressional source said. “The end is not near.”

The additional investigations “will likely be welcomed as a sign that the department is taking the matter seriously and wants to rectify any past wrongdoing,” said Christopher Bolkcom, an aviation analyst at Congressional Research Service. “However, because this investigation suggests that contract malfeasance was not an isolated incident, it will almost certainly fuel DoD [Department of Defense] critics on Capitol Hill and elsewhere.”

Early Monday morning, Pentagon officials contacted the four companies to alert them that their contracts — among 407 reviewed by the Defense Contract Management Agency — appeared to be suspicious. By noon, Congress had been notified and acting Pentagon acquisition chief Michael Wynne had met with reporters.

During his 35-minute media briefing, Wynne stressed that the contracts were only under investigation and no wrongdoing had been confirmed. They only appeared to “violate standard processes,” he said.

“Some of the contracting issues may have been OK and very innovative,” Wynne said.

But on Capitol Hill, the very suggestion that the corruption could be widespread got the attention of two senior members of the Senate Armed Services Committee.
“It would be astounding if the [inspector general] determined serious misconduct in awarding the contracts could have been so freely perpetrated by one individual, resulting in an unprecedented series of fraudulent decisions,” McCain said in a statement. “Congress must also do its oversight job in determining whether the extent of the apparent failures and oversight in procurements at the Air Force and Defense Department are systemic in nature.”

McCain, who is expected to be named chairman of the Senate Armed Services Airland Subcommittee later this week, said he intends to hold further hearings on the issue. The panel is charged with overseeing roughly $41 billion in Pentagon programs.

Sen. John Warner (R-Va.), Armed Services chairman, issued a similar release Monday, reiterating that the Air Force has not yet shared with Congress all of the information on the corruption within the Air Force’s weapons-buying shop.

“We must establish full accountability for past actions to help the Air Force move on,” Warner said. The committee, he said, “will continue to look into this atrocious mismanagement and waste top to bottom.”

The eight contracts total more than $3 billion and range in value from $42 million for Lockheed’s F-16 Mission Training Center to $1.5 billion to Boeing for depot maintenance on the KC-135 tankers.

But the issue of defense acquisition reform has not become a mainstream one on Capitol Hill, several defense observers said, in part because it can be a somewhat obscure and highly technical issue that doesn’t generate a lot of sizzle for constituents back home.

“It hasn’t been a topic on the tip of everybody’s tongues lately,” said Eric Miller, senior defense investigator at the Project on Government Oversight. “There doesn’t seem to be a lot of impetus on the Hill right now to look into it, but there should be.”

A general feeling of wartime support for the Pentagon — and defense spending — makes drumming up support for the issue more difficult.
“I don’t think this is resonating with constituencies. These are pro-defense times,” said Richard Aboulafia, an aviation analyst at the Teal Group in Fairfax, Va. “There is a broad agreement on a higher level of defense spending. That removes some of the panache.”

For the most part, members of the Senate Armed Services Committee have led the way on the issue, with their counterparts in the House lending more tepid support, said Keith Ashdown, vice president of policy at Taxpayers for Common Sense.

“Throughout the whole process, we haven’t seen real interest in oversight except from the SASC,” or Senate Armed Services Committee, Ashdown said.
But a House Armed Services Committee spokesman said the panel will continue to watch developments on the issue.

“Anything Druyun was involved with probably deserves extra scrutiny,” Harald Stavenas said. “This committee will continue its oversight role and monitor the investigations.”