Boeing's $17bn USAir Force lease hangs in the balance

The survival of the US Air Force's $17 billion lease/purchase deal for 100 Boeing tankers is in doubt due to accusations of unethical conduct.

US deputy secretary of defense Paul Wolfowitz ordered the USAF to freeze the programme five days after President George Bush signed the authorisation bill. The signing coincided with revelations of misconduct in Boeing's boardroom, the subsequent firings of two executives, and the resignation of former Boeing chief executive Philip Condit.

The delay has undermined support for the programme in Congress as opponents called for fresh scrutiny next year. The Department of Defense's open-ended review may also complicate a decision on the UK's Future Strategic Tanker Aircraft competition between the Boeing 767 and Airbus A330. The Pentagon is probing whether an air force official supplied Boeing with proprietary pricing data on the Airbus tanker bid, leaving the UK contest open to charges of unfairness. UK Ministry of Defence sources insist, however, that a decision is planned before 18 December.

Wolfowitz wants to find out if the 767 deal was influenced by the hiring of air force acquisition official Darleen Druyun by Boeing chief financial officer Michael Sears. Both were dismissed in November.

The timing of the delay and the nature of Wolfowitz's review has raised alarms in industry and government circles, where it had been almost unanimously believed that a compromise lease/buy proposal had secured the deal's future. A senior legislative staffer says it is conceivable "this deal could be scrubbed if Druyun unethically influenced the decision to such a degree that the air force believes this is a deal that they can't stand by".

JSA Research market analyst Paul Nisbet disagrees the deal is in jeopardy. "It's 90% through. It's what [the air force] wanted. I don't think that will change because of a rogue government employee that decided to do things considered unethical."

Source: Flight International