Air Force should give Boeing a fair shake on tanker contract this time

LAST December, as many of our most important financial institutions were crumbling in a kind of Wall Street Tower of Babel, hotshot money manager Bernard Madoff was arrested for operating the largest-ever Ponzi scheme, a $50 billion shell game that wiped out his biggest investors.

Amazingly, a whistle-blower has since testified that he presented overwhelming evidence of Madoff's scam to the Securities and Exchange Commission for nine consecutive years — but the agency refused to investigate. The Madoff case raised a serious question: Which other government bureaucracies are neglecting to protect the American people from cheaters?

Unfortunately, recent history suggests the worst offender is the biggest agency of all: the Pentagon.

Last year, the Defense Department attempted to outsource 44,000 jobs — and a defense contract worth as much as $100 billion to build the Air Force's new aerial refueling tanker — to French company EADS. Our own U.S. trade representative has sued EADS before the World Trade Organization for violating international trade laws.

Experts noted that EADS' aircraft was also less fuel efficient and less flexible than the one offered by Boeing. The Government Accountability Office found "significant" flaws in the decision, ultimately overturning the contract award.

Why did the Pentagon tilt the scales in favor of a foreign company with a trade-outlaw reputation and a less capable aircraft? That question is about to take center stage, as the Pentagon prepares to rebid the tanker contract this summer.

In the Wild West of international commerce, EADS is a modern-day Jesse James. EADS has received tens of billions in illegal subsidies since 1969 from European governments whose explicitly stated purpose is to help EADS take business from U.S. companies and has, in the past decade alone, redirected 65,000 good-paying jobs from the U.S. to Europe.

While underwriting EADS' pursuit of Pentagon contracts, European governments have barred U.S. companies from bidding on European Union military contracts. As if that weren't enough, EADS repeatedly has been implicated in bribery of procurement scandals in an array of countries, from Saudi Arabia to Switzerland.

Equally frustrating, the Pentagon clearly chose the inferior refueling tanker. Compared with Boeing's KC-767, EADS' KC-30 is too large to land at key air bases and will allow fewer refueling props to be launched at any one time. It's also more vulnerable to attack and will cost taxpayers at least $30 billion in additional fuel costs.

The Air Force's own analysts previously stated that the KC-30 airframe would be too big to serve as an effective tanker. Increasingly, neutral industry experts have weighed in on Boeing's behalf.

The tanker contract is only the worst example of a Pentagon procurement process that seems blind.

Defense Secretary Robert Gates is taking steps toward acquisition reform, but the proof will be in the pudding. Will this summer's Air Force tanker procurement process be Exhibit 1 for a better, cleaner Pentagon — or the latest evidence that when it comes to defense dollars, cheaters continue to prosper?