Boeing hit by new blow in USAF tanker deal David Gow Wednesday December 3, 2003 The Guardian
Boeing suffered a further reverse yesterday when the Pentagon froze a controversial $20bn contract to supply the US Air Force with 100 air-to-air refuelling tankers. The aerospace and defence group, whose chief executive, Phil Condit, resigned just 24 hours earlier, is being investigated by the defence department after firing two executives connected with the deal for unethical conduct. Paul Wolfowitz, deputy defence secretary, told leaders of the Senate armed forces committee he was ordering a pause in the "execution" of the contract to lease 20 and buy 80 converted Boeing 767 aircraft. He said his decision was prompted by Boeing's dismissal of its chief financial officer, Mike Sears, last week for discussing potential employment at the group with Darleen Druyun while she remained the USAF's head of procurement in charge of the tanker deal. Boeing also sacked Ms Druyun last week. The Pentagon has come under strong pressure from senators such as John McCain, former Republican presidential challenger to George W Bush, to reconsider the contract in the light of the Sears and Druyun sackings. It is already investigating allegations that Ms Druyun, who sold her home to a Boeing attorney, passed on sensitive price data from rival Airbus to the US group. The European company has been trying to break into the US tanker market and is widely believed to have undercut Boeing's offer. Amid accusations that the Pentagon awarded the tanker contract to Boeing as compensation for losing the $200bn contract for the new joint strike fighter two years ago, the latest move puts added pressure on Harry Stonecipher, Mr Condit's successor, to restore the group's US reputation. On Monday he said his main priority was to reassure the Pentagon that Boeing was an "exemplary" customer and he planned early meetings with both senior officials and Congress members. But he insisted the deal would go ahead. The contract, which initially would have seen the Pentagon lease all 100 aircraft, has been mired in controversy for two years and this threatens to spill over to the UK. The government is considering whether to award a £13bn contract over 27 years for about 20 tankers to a team led by Boeing or one offering Airbus.
