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A Tale of Two Senators
by Geov Parrish
Defense contract cheating will continue until more political leaders demand
Pentagon accountability.
Boeing CEO Phil Condit has now fallen on his sword--or been pushed. The
widening scandal around Boeing's revolving door jobs and other ethically
dubious inducements in exchange for a lucrative new defense contract
threatens to become the biggest US arms industry scandal since Lockheed
tried to buy Japan. In the end, it took the pressure of two Senate
Republican hawks, John McCain of Arizona and Peter Fitzgerald of Illinois,
to force Boeing to face serious consequences for its latest unethical
assault on taxpayer dollars.
Where were the other 98 senators? See no evil, hear no evil, smell no evil.
The Lockheed scandal occurred during the Reagan era of military spending
largesse. It's a different, even more generous world today for military
contracts, a world where taxpayer money flows like a rampaging river and
the dam sluices are wide open. Even though Boeing executives fled Seattle
for Chicago last year, Washington state still offers a telling case study
of the political culture in which the corruption that accompanies such
fortunes has been thriving of late. It's hardly an isolated example.
Boeing's headquarters is now in Peter Fitzgerald's state--but there are no
Fitzgeralds in most states and congressional districts where one or another
military base or contractor brings home the pork.
In this past year's most notable farce, Washington's state legislature
convenes again next month to wrestle with still more budget cuts--after
enacting, with a strong push from Democratic governor Gary Locke, a deal
last spring that lavished money on Boeing regardless of whether it locates
a coveted new 7E7 final assembly plant in the state. Even though most of
that project's components will be made overseas, the Locke deal could
ensure state deficits for decades. It's estimated that even if the 7E7's
promised 900 or so jobs do go to the Evergreen state, the state will
collect at least $3.5 billion less in taxes than it otherwise would over
the next 20 years. The package was so laden with gifts from our
cash-strapped state that one provision even gave the company a $20 million
tax credit for computer equipment it bought years ago. In some countries,
that's called a bribe. Here, and in countless locales trying to lure the
7E7 project, it's yet another way Boeing makes money.
In Washington state, Boeing's original home, in exchange for decades of
such fealty, the late Mr. Condit and other Boeing execs have steadily
stripped many tens of thousands of jobs away from the Puget Sound, often
outsourcing them to other countries. The company has also steadily moved,
since the mid '90s, to reliance on military contracts; a good deal of
Boeing's potential profitability now comes from its effectiveness in
sucking at the federal taxpayer teat.
That's why the latest fiasco has struck so close to the company's bone--and
why it's such a telling commentary on who our country's politicians are,
and are not, looking out for when the Pentagon and truckloads of cash are
in the house. Condit's forced resignation came two days after a letter from
McCain and Fitzgerald urged the Pentagon to postpone a multi-billion dollar
contract to lease and buy 100 new air-refueling tankers, a contract given
the force of law by a defense appropriations bill signed by Pres. Bush last
week.
Fitzgerald and especially McCain have been criticizing the tanker deal for
months. Meanwhile, Washington state's senior senator, Patty Murray, was
whimpering that the deal was already the "most scrutinized ever"--why look
at it further? Only a month ago, in early November, Murray, Sen. Maria
Cantwell, and Reps. Norm Dicks and Dick Larsen--all Washington state
Democrats--were climbing over each other trying to claim credit for having
"won" the tanker deal for Boeing--a company that no longer lives in their
state and, increasingly, doesn't work there, either. When the scandal was
revealed last week and two senior Boeing executives, Mike Sears and Darleen
Druyen, were fired, Murray--ever the voice of accountability--weighed in:
"I'm not part of Boeing's employee policies."
It's been years since Boeing was a Seattle hometown-boy-made-good story;
its annual income now rivals GDPs of Eastern Europe's larger countries. But
for its enthusiastic reliance on R&D, marketing, financing costs and
military contracts paid for by American taxpayers, Boeing owes little
loyalty to any country, let alone any state or metropolitan area. A
relatively minor investment--a few dozen DC lobbying firms, a phalanx of
former Congresspeople, DoD officials, and generals on its board and
lobbyist rolls--gets the company a whole lot of our money, plus a few dozen
Senators, several score of US Representatives, and more politicians in the
37 or so other states where Boeing has facilities of some sort. The
military contractor world's other behemoth, Lockheed Martin, has the same
sort of infrastructure of corruption. What's amazing is not that all the
politicians become and stay bought--it's that they sell themselves so
cheaply and faithfully.
In large part, this happens because we let it. Murray, Locke, and the rest
face almost no organized public outcry when they give our future away based
on an "it will create jobs" mantra that does not even come close to
penciling out. The days of a "Senator from Boeing" should be long gone,
vanished with offset deals and global outsourcing, with state and local
fiscal crises caused in part by years of lavish corporate welfare, and with
a post-9/11 spending environment in which vast fortunes are being slipped
into military spending bills while nobody's looking.
The cost to us is the money Boeing doesn't pay in taxes, the money
Boeing--and Lockheed Martin, and Raytheon and Northrup Grummon and all the
rest--get from our taxes, and all the other ways that governments can't
spend the lost money as a result: education, say, or health care, or job
training for all those laid-off aerospace workers. For years, these
companies have been successfully getting laws rewritten for their benefit;
Boeing's collapsing tanker deal, like some of these companies' other
fiascos in recent years, is less an aberration than a measure of such
companies' ambition and willingness to push the envelope for the sole
benefit of stockholders and stunningly overpaid executives like Condit.
It's not just the tanker deal that reeks--it's the entire military budget,
top to bottom, all of it a product of the same oversight-free culture.
As that envelope got shoved, it's a shame only two out of 535
Congresspeople cared enough to pursue Boeing's transgressions. Boeing
doesn't need politicians like Patty Murray or Gary Locke looking out for
them--but we do. It's time our elected officials decide whose side they're
on.
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