“Maverick” McCain is Right on Boeing Scandal

by Sara Kirsch and Leah Grothe

Presidential hopeful, Senator John McCain spoke on CNBC’s "Squawk Box" September 16 about the need to control excess government spending. When asked how he would promote change in the current Republican party on this issue, he responded,

"I fought against spending and I think the problem has not been taxes, the problem has been out of control spending . . . I broke a scandal on Boeing that was going to cost taxpayers an additional $6 (billion), $7 billion where people went to jail."

Is McCain exaggerating his role in the Boeing scandal? Or is he telling the truth?

In 2003, the New York Times reported that the Air Force presented Congress with a $20 billion plan to lease 100 Boeing 767’s as replacements of Vietnam war-era airplanes currently used in Iraq. The Air Force claimed that this was the fastest way to acquire new and updated aircrafts. They made this claim despite the fact that the Vietnam-era tankers could be upgraded for a lower cost.

The lease deal between the Air Force and Boeing was extremely lucrative for Boeing. Leasing 100 Boeing tankers was equivalent to the profit of selling approximately 1000 commercial airliners. Senator McCain was an opponent of this deal from the beginning. He led the Senate Commerce Commission in a hearing where he acquired important documents from Boeing that clearly showed Boeing, not the Air Force, controlled the acquisition. McCain stated that the committee’s review showed,

"an extremely aggressive sales pitch not only by a company whose mission is to protect its shareholders and to make profitable deals, but by the United States Air Force whose mission is very different."

The interests of Boeing clearly differed from those of the Air Force; Boeing’s interest was self profit, while the Air Force’s aim was to increase national security.

McCain went on to release the documents to the Senate in hopes that the revelation would kill the deal between Boeing and the Air Force. Instead, he hesitantly voted for the National Defense Authorization Act for the 2004 Fiscal Year, which allowed the Air Force to lease only 20 tankers from Boeing and buy the other 80. The bill in effect did save taxpayers approximately $6.7 billion, the committee concurred. This would make McCain’s claim about saving taxpayers between 6 and 7 billion dollars true.

As to McCain’s claim about people going to jail, this was in effect true but underlined with exaggeration. Two top Boeing executives did go to jail; Vice President of Missile Defense Systems Darleen Druyun was sentenced to nine months in prison, while Chief Financial Officer Mike Sears was only sentenced to four. While information uncovered by John McCain may have proven beneficial to the company, the two employees were arrested for negotiating Druyun’s possible employment at Boeing while she was still considering the contract. The two faced no hard time and McCain overstated his role in the arrests.

Lesson: Do not take everything at face value. While Senator McCain’s claim was mostly true, he discussed the facts in a way that place himself in a better light, and as the "law and order," anti-corruption candidate.