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Illinois friend in high places helped pilot Boeing-Air Force deal

By Katherine Pfleger
Seattle Times Washington bureau

	TED S. WARREN / AP Rep. Norm Dicks, D-Bremerton, praises the first model of the Boeing 767 Tanker Transport aircraft to roll off the line in Everett in July. The plane was destined to become a refueling tanker for Italy's air force.
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Yesterday, legislation cleared Congress letting Boeing begin the replacement of an Air Force workhorse, the KC-135 refueling fleet. It's up to the Air Force and Boeing to negotiate a final contract.

The deal would breathe new life into Boeing's struggling 767 line and preserve thousands of jobs in Washington. In coming years, it's expected to mean up to 100 planes and be worth billions. The state's congressional delegation has spent roughly two years lobbying to make it happen.

But so, too, has Hastert. And without him, the deal may not have happened.

Often quietly, the Republican from northern Illinois has prodded Boeing, military leaders, administration budget officials and members of Congress to keep the deal alive. He's tapped White House Chief of Staff Andy Card and at times has gone all the way to President Bush.

"He is the man," said Rep. Norm Dicks, D-Bremerton, whose work with Hastert included a visit to some KC-135s in the Mediterranean. "This deal does not happen without his clout and influence with the administration."

But don't mistake the deal for a favor to Boeing or a parochial interest, Hastert's spokesman John Feehery said. Boeing's corporate headquarters is not in his district, and not a single plane will be built in Illinois.

"The speaker has been pretty focused on this because he really saw it as a threat to national security if we don't have these planes. His highest priority was to improve national security," Feehery said.

Motivations aside, the new relationship can only mean good news for Boeing.

Since assuming the House's top slot in 1999, Hastert has become one of the most powerful people in Washington. He's in line for the presidency behind Vice President Cheney. He can push legislation through and has an even easier time stopping it.

Hastert also has proved loyal to Bush — on issues such as the president's tax cuts — and has secured his access to the White House. Yet the former high-school teacher and wrestling coach also cares about parochial issues, such as maintaining good relations with Illinois companies.

His relationship with Boeing warmed after the company announced in the spring of 2001 that it was considering three states for a new headquarters. Hastert was on the promotion team for the Windy City, a group called by one local paper a "Who's Who of Chicago."

To be sure, Hastert knew Boeing before Chicago's courtship began. He toured facilities, including a Boeing site in Macon, Ga., in 2000, and his campaign committees have accepted about $26,000 in contributions from the company's political arm since 1998.

However, with those dollar figures, "you would not say that Boeing is one of the major contributors to Hastert," said Larry Noble, executive director of the D.C.-based watchdog group, the Center for Responsive Politics.

	Dennis Hastert

Hastert's enthusiasm for the tanker deal — one of Boeing's most important issues before Congress — is undeniable. That's good news for the company, because the military work will provide the 767 line with a significant infusion of business following a drop-off in commercial-jet sales.

Aides to Sen. John McCain, R-Ariz., the deal's most vehement opponent, obtained stacks of Boeing and Air Force documents about how the plan came together. They indicated Hastert had at least two conversations with Bush.

In one internal message, Boeing's top defense executive, Jim Albaugh, says Hastert was fuming over a column about the "Boeing boondoggle" written by nationally syndicated newspaper columnist Robert Novak.

"Our contacts with the speaker indicate that he is ballistic over the article and that he takes it as a personal affront. The speaker met with the president earlier this week and directly raised the tanker issue and the need to get on with the deal," Albaugh wrote in December 2002.

The deal started to jell the last week in October, following a meeting with Hastert's chief of staff, his defense aide, Dicks and three of Dicks' aides. They huddled just before 8 p.m. in Dicks' office to consider their options to get final congressional approval for a 100-plane tanker fleet.

Within days, Hastert had White House Chief of Staff Card schedule a meeting with budget officials and others to get the deal moving.

Yesterday, the defense-authorization bill containing the deal cleared Congress, allowing the Air Force to lease 20 planes and buy up to 80 later.

"The big thing here is the speaker has played a major role in terms of keeping the administration focused like a laser beam on this," Dicks said.

But the deal didn't come down as planned. Originally, Hastert, Dicks and other proponents wanted the Air Force to lease the entire 100-plane fleet, giving Boeing assurances up front of a sizeable order.

The 20-80 lease-purchase was a compromise to quell criticism from Senate Armed Services Committee members — including McCain — who complained that leasing the planes would cost over $6 billion more than buying them. Under the revised plan, Congress has to spend money each year toward the 80-plane purchase, giving lawmakers more oversight and creating some uncertainty.

Still, Richard Aboulafia, an aircraft analyst with the Teal Group, dismisses any suggestions that Hastert didn't come through because the deal changed.

By focusing on details, "you lose sight about the bigger picture, which is Boeing got what it wanted. Boeing was selected to be the next-generation tanker provider, which is probably good for at least 400 planes in the long run," said Aboulafia, who does consulting work for both Boeing and the parent company of its rival, Airbus.

"You are looking at adding at least a dozen wide-bodies per year to your books, almost in perpetuity," Aboulafia said.

Hastert, too, has looked at the deal in context of launching a new program and, more subtly, at the role he and Illinois can play in the future. In May, he told The Associated Press that the most important thing was to get the deal done.

"That means not just 100 planes, but probably, long term, it'll be 500 tankers," he said. "And that probably when Boeing looks to expand, or do anything, they'll look back right here for their headquarters in Illinois."

Aboulafia and others say it's impossible to know what Hastert promised he'd do for Boeing — if anything — when it moved its headquarters.

But the friendship could come in handy in the future, perhaps by early next year.

Congress is facing a deadline to comply with a World Trade Organization ruling prohibiting specific tax benefits for U.S. exporters, chief among them Boeing and Caterpillar.

If Congress fails to act, the European Union could impose $4 billion in tariffs on agricultural and manufacturing products. However, any rejigger creates winners and losers across the U.S. business community.

What, if anything, Hastert will do for Boeing is unclear.

Kevin Hassett, a tax expert at the conservative American Enterprise Institute think tank, said the debate puts Hastert in an unenviable spot. As speaker, he wants to do what's best for the country. But he also wants to take care of companies he represents.

"Perhaps that explains why part of his strategy has been to lay low, at least in the public eye. I'm sure he's had a big impact on what's happened," Hassett said.

Katherine Pfleger: kpfleger@seattletimes.com or 206-464-2772

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