posted 12-02-2003 08:49 PM            

Pentagon Delays Plans to Acquire Tankers

By KEN GUGGENHEIM, Associated Press Writer

WASHINGTON - The Pentagon (news - web sites) will delay plans to acquire 100 air refueling tankers from Boeing in light of a scandal at the aerospace giant that has led to the dismissal of two executives and the resignation of Chairman and CEO Phil Condit.

Deputy Defense Secretary Paul Wolfowitz said the Pentagon's internal auditor will examine whether the conduct of the two executives had any negative impact on the contract to lease 20 tankers and buy another 80.

The Air Force initially proposed leasing all 100 tankers in an attempt to quickly update its aging fleet. Sen. John McCain, R-Ariz., and other lawmakers had criticized the proposal as wasteful and lawmakers worked out the compromise to lease only 20 planes and buy the rest. The change was expected to save billions from the original plan, estimated around $21 billion.

In a letter Monday to leaders of the House and Senate Armed Services committees, Wolfowitz described the delay as "a pause." He said the Pentagon "remains committed to the recapitalization of our aerial tanker fleet and is appreciative of the compromise that will allow this arrangement to move forward."

"Nonetheless, I believe that it is prudent to reassess this matter before proceeding," he said.

Senate Armed Services Chairman John Warner responded to Wolfowitz on Tuesday, saying the Pentagon should take no action on the planes until the findings of the Pentagon inspector general have been made available for review by Congress, said John Ullyot, a spokesman for Warner, R-Va.

Work on development of the tanker modifications already is under way at Boeing's Wichita, Kan., facility. Boeing-Wichita spokesman Dick Ziegler said he would not characterize the Pentagon's actions as a disappointment but called it "merely a pause" as Wolfowitz described in his letter.

"We have been given no change in direction. We are merely waiting until the actions can be completed," Ziegler said. "We are ready, willing and quite able to begin work."

Congressional advocates of the tanker plan stressed the urgency of updating the tanker fleet. Most of the planes are more than four decades old.

"Further delay of the tanker program, beyond the two years that have already elapsed since Congress first approved this plan, could result in greater costs to taxpayers and to our defense capability," said Sen. Patty Murray, D-Wash.

A spokesman for House Speaker Dennis Hastert, John Feehery, said "the bottom line is we don't have enough tankers to do the job for national security." Hastert is from Illinois, where Boeing's headquarters is based, and Boeing's commercial airplane division is headquartered in Washington state.

Boeing announced Nov. 24 it had fired its chief financial officer, Mike Sears, and a vice president, Darleen Druyun, a former Air Force official. A Boeing investigation found that Sears approached Druyun about joining the company while Druyun was overseeing Boeing contracts for the Air Force.

Boeing said Sears and Druyun were fired for violating company policies on hiring and they tried to cover up the misconduct.

Condit resigned unexpectedly Monday, saying "the controversies and distractions of the past year were obscuring the great accomplishments and performance of this company."

On the day that Sears and Druyun were fired, President Bush (news - web sites) signed a $401.3 billion defense bill that authorized the plan to lease and buy the tankers. But pressure quickly mounted to reconsider the plan. Defense Secretary Donald H. Rumsfeld said the next day that he had asked senior Pentagon officials to examine whether it should be delayed.