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Pentagon Submits Budget, And Services Ask for More
Air Force Lobbying for C-17s Raises Questions

By Josh White
Washington Post Staff Writer
Tuesday, October 16, 2007

The Pentagon not only left new C-17 transport planes out of its budget request this year, it set aside half a billion dollars to halt the planes' production. Officially, the Air Force took the same view, swearing off any more C-17s, which cost $250 million apiece.

Behind the scenes, however, Air Force officials and Boeing, which makes the C-17, have been lobbying Congress to get more of the planes built, key lawmakers said. Seven House members have responded by inserting into the defense bill one of that chamber's largest single earmarks -- a demand that the Air Force give Boeing $2.42 billion for new C-17s.

The Air Force "made it very clear to me that they needed the C-17 and could use the aircraft," said Rep. Todd Akin (R-Mo.), a fiscal conservative and one of the seven sponsors. "But we were going to have to stick it into the budget" because the Air Force was not going to allocate the money itself.

Congress has often padded the military's budget with demands for weaponry that the Pentagon says it does not need -- ranging from refueling tankers to artillery cannons and helicopters. But the C-17 case illustrates how individual military services sometimes lobby quietly to resurrect pet projects that wound up on the cutting-room floor in Defense Department budget deliberations.

"This has been going on probably since the Revolutionary War," said Dina Rasor, chief investigator with the Follow the Money Project, which tracks military spending on the wars in Afghanistan and Iraq. "There's a wink and nod here. The Pentagon will get what they want and the Congress will get what they want. Earmarking is a way for them to sneak it in the budget.

"Everyone keeps voting the money, and everyone's happy," Rasor said. "As a result, the defense budget is now beyond comprehension."

This is the second consecutive year that 10 unbudgeted C-17s have made their way into the defense bill, prompting three senators to question the Air Force procurement process and sparking concerns on Capitol Hill that more multibillion-dollar earmarks could be coming soon.

The Air Force and Boeing previously collaborated to lobby Congress for $30 billion to lease modified Boeing 767 civilian aircraft for use as military tankers. That effort was conceived by Boeing as the 767, like the C-17, was about to go out of production. It was blocked after a Senate investigation found evidence that Pentagon officials viewed the tanker lease as a politically influenced bailout for Boeing.

In that case, the Air Force secretary and his top acquisitions deputy resigned, an Air Force procurement officer was sent to prison, Boeing's chief executive was replaced and the company agreed to pay $615 million in large part to settle liability for the tanker mess. Air Force officials said the episode has led to an abundance of caution in procurement matters.

But the C-17 earmark -- the largest in the $507 billion defense bill -- is now at the center of a controversy over funding for the Air Force's strategic airlift fleet of about 300 planes, a group of aircraft that are used to ferry heavy equipment, supplies and troops into and around Iraq and Afghanistan.

Although the Pentagon has officially decided it would be cheaper and more effective to shut down the C-17 assembly line and upgrade an older fleet of C-5 transport aircraft, Air Force officials have been consistently saying behind the scenes that it would make more sense to retire 30 of the older planes and buy 30 new C-17s.

That option, which the Air Force deputy chief of staff for policy and the head of the Air Mobility Command have explained in briefings to House and Senate staff members and lawmakers, would require a shift in existing policy and cost $8 billion that the Air Force has officially said it is not prepared to spend.

"The Air Force doesn't have the money for the C-17s," said a senior Air Force official familiar with the issue, adding that "if someone wants to give it to us, we'll certainly take it." Said another senior Air Force official: "If we had the money, we would retire the C-5s and build C-17s."

The Air Force instead has already started upgrading the C-5, at a multibillion-dollar cost, but Air Force officials say the work, by Lockheed Martin, is now under review because it is well over budget.

Boeing has also been lobbying for the C-17s. The company and its employees gave more than $72,000 in campaign contributions over the past two years to the six Republicans and one Democrat who sponsored the earmark, according to federal campaign finance records. In total, nearly 50 members of Congress wrote letters supporting the 10 additional C-17s.

Despite the Pentagon's decision to close the production line, Boeing said this year that it was prepared to risk millions of dollars to keep its C-17 line open because the company was getting indications from Capitol Hill that orders for 30 C-17s would be coming. The company made that decision without receiving an official response from the Air Force to its unsolicited proposal for the additional planes.

"Boeing's decision was also based on public statements by Air Force officials that they might consider procuring additional C-17s if Congress allowed the Air Force to retire a number of older, unreliable C-5s," said Boeing spokesman Douglas Kennett.

The C-17, the smaller of the two planes, first flew in 1991. The plane has a crew of three, a maximum range of 2,400 nautical miles without refueling and a maximum payload capability of 170,900 pounds. The C-5, in contrast, first flew in 1970, has a crew of seven, a range of 2,650 nautical miles without refueling and a payload capability of 270,000 pounds.

Akin said Congress was put in the position of playing a "high-stakes poker game" to prevent Boeing from shutting down the C-17 assembly line -- it would cost taxpayers far more to restart it in the future -- while also figuring out the Air Force's needs.

He said the Air Force has traditionally preferred to spend money on planes that control the skies -- such as the F-22 fighter jet -- rather than those that transport supplies, vehicles and people, such as the C-17.

Rep. Russ Carnahan (D), Akin's colleague from Missouri, also sponsored the earmark, in part to protect the jobs of about 2,000 St. Louis workers who produce C-17 parts. "There was a general belief out there that they didn't request these at a time when they clearly are needed and wanted because they were confident that Congress would do it," Carnahan said.

So far, no similar language has been added to the Senate version of the bill. Moreover, Sens. John McCain (R-Ariz.), Edward M. Kennedy (D-Mass.) and Thomas R. Carper (D-Del.) wrote to the Air Force in July alleging that the service may have inappropriately encouraged Boeing to keep the C-17 line open as part of a ploy to build them outside normal budgetary processes.

Carper, a supporter of upgrading the C-5, said that if C-17s are the Air Force's priority, the service should put them in the budget. He said that the military services like new weapons systems more than they like old ones because they "like to have new toys."

In September, McCain urged the Defense Department's inspector general to investigate, writing in a letter dated Sept. 11 that he is "troubled by the Air Force's apparent disregard for proper acquisition policy, practice and procedure and seeming eagerness to further contractors' interests," particularly when dealing with a program that is not part of the president's budget.

Air Force Secretary Michael W. Wynne responded in late August that there are reviews underway to determine whether some of the C-5s should be replaced with C-17s. "This review is preliminary only and my staff has not reached any conclusions regarding its suitability or affordability," Wynne wrote in the letter. "I am aware of no commitments that the Air Force or the Department has made to the prime contractor regarding future C-17 production."

Danielle Brian, executive director of the Project on Government Oversight, said the congressional sponsors are "not ashamed of the earmarks, they're proud of them." She said that "it's part of the fellowship between the service, the contractor and their patrons in the Congress, and they work very hard not to leave anyone hanging out to dry."

While such a large earmark might help protect thousands of jobs at Boeing and its subcontractors, it could easily pull money away from more important weapons needs, Brian said.

Staff researcher Madonna Lebling contributed to this report.

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