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New Doubts Over Pentagon Proposal to Lease Boeing 767s

The aircraft would be less expensive to buy outright, according to congressional research.

October 02, 2003|Jim Wolf | Reuters

WASHINGTON — The nonpartisan U.S. Congressional Research Service raised new doubts Wednesday about a fresh Pentagon push to acquire Boeing Co. 767 aircraft for use as midair refueling tankers through a lease.

The research service said the Defense Department's latest proposal bolstered the case for purchasing the aircraft outright, rather than leasing them first in a deal valued at about $22.4 billion.

Earlier this month the Senate Armed Services Committee put off what was to have been a final vote on the lease proposal.

Chairman John W. Warner (R-Va.) and the committee's top Democrat, Carl Levin of Michigan, asked the Pentagon for data on leasing no more than 25 Boeing 767s.

That's a reduction from the 100 the Air Force has been seeking.

They said the service could buy the other 75 later amid claims by many experts that the proposed 100-tanker lease would cost almost $6 billion more than buying them straight out.

Deputy Defense Secretary Paul D. Wolfowitz replied with a proposal to buy 26 of the aircraft before their leases run out, between 2008 and 2010 -- a move he said would trim about $1.2 billion in total program costs.

In his Sept. 22 reply to the panel, Wolfowitz also cited the "unforeseeable effects" of corrosion on the Air Force's aging fleet of KC-135 tankers as a key reason to move ahead quickly.

But the research service said the Navy, among others, did not consider corrosion to be unpredictable. Rather, the Navy deems it a "known problem" that it takes "proactive steps" to mitigate.

In addition, it cited a 224-page Federal Aviation Administration advisory saying corrosion could be prevented through "a constant cycle of cleaning, inspection, operational preservation and lubrication."

Neither the Defense Department nor the Air Force had any immediate comment on the research service's report, prepared for the staff of Sen. John McCain (R-Ariz.), who has denounced the lease proposal as a sweetheart deal for Boeing at the expense of taxpayers.

Warner has asked the General Accounting Office and the Congressional Budget Office -- audit arms of Congress that criticized the original lease proposal -- for their analyses of the modified Pentagon plan.

McCain, who serves on the armed services panel, has urged Warner to postpone a vote until after Pentagon Inspector Gen. Joseph Schmitz wraps up his investigation into possible improprieties in the negotiations.

Defense officials said that process could take months.

Warner believes that the Pentagon watchdog's investigation is not an "absolute block" to moving forward with committee action once the two requested analyses are done, said spokesman John Ullyot.

The pending analyses were expected by late October or early November, a Senate staff member said.

Schmitz, in charge of rooting out waste, fraud and abuse, told lawmakers last month that he had concluded that "sufficient credible information" existed to warrant a formal probe of lease negotiations.

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