Thursday, February 3, 2011

Moneytanker, Part 1

(Yet another series that I begin...)

There have been some recent developments in the ongoing dispute about who will provide the new tankers for our Air Force. The ones we currently fly are generally relics of the Cold War, dating back to Eisenhower's time. In the wake of 9/11, with an eye towards not only modernizing US capability, but also to helping US business, the idea arose to lease some tankers, which would have substantially helped a major US aerospace defense contractor, Boeing.

However, Air Force Tanker Program Flies Into New Political Storm (January 31, 2011) gives a nice overview of the whole situation. A key excerpt:

If you find this confusing, join the crowd. Perhaps a bit of history will help explain how we got to this point. Shortly after the 9-11 attacks, as the airline business was tanking, some Boeing supporters in Congress got the bright idea to jump-start replacement of aging Air Force tankers by leasing a hundred widebody airliners modified for the refueling mission. Boeing's commercial aircraft operations were struggling, so the lease was a way of helping the company at a time when it was likely to offer a good price. Leasing is a common practice in the airline business, and Boeing agreed to give the Air Force the same terms extended to its biggest commercial customers. But some members of Congress such as Senator John McCain thought the lease sounded like a give-away to Boeing, so they pushed for a tanker competition rather than a sole-source award.

The net result is that EADS got into the act, bidding on the contract.

There is a great deal of controversy, with each side (EADS and Boeing) being accused of unfair advantages due to subsidies by their respective governments (EADS by European governments, and Boeing by the US government, including NASA).

Would we not normally assume that US military tanker aircraft would be made by a US aerospace defense contractor, someone home-based here in the US?

Of course, competition is a good thing, right? Free trade? :)

The respective sides of this are presented by the corporations involved - Boeing: Boeing Response to WTO Rulings and Boeing Response to Public Reports Regarding the WTO's Final Ruling in DS 353; and EADS/Airbus: WTO ruling: Billions in Boeing subsidies distort competition.

Of course, I am always interested in money. :)

Both Boeing and EADS have PACs involved in the US political process. You can see on the FEC website (see sidebar under US Government) who is contributing to whom. Here are quick links for your immediate reference: EADS North America Americans for Competition in Aerospace PAC ["EADS PAC" - EL] Committees and Candidates Supported/Opposed and Boeing Company PAC Committees and Candidates Supported/Opposed.

Boeing's PAC has been involved in the political process for some years, and John McCain, mentioned in the excerpt above as a key figure opening up the competition to EADS/Airbus, has been a notable recipient.

However, in recent years - roughly corresponding to the time frame that this issue has erupted - EADS PAC has also become involved, and, again, Senator McCain has been a big recipient of EADS money.

(EADS PAC to Senator John McCain 2009-10-26, EADS PAC to Senator John McCain 2010-10-20)

Of course, interestingly enough, Senate Majority Leader Harry Reid has also received some of their money.

(EADS PAC to Senator Harry Reid 2009-10-08, EADS PAC to Senator Harry Reid 2009-10-28)

It is interesting how Congress decides there needs to be competition in our military spending, and suddenly, one money spigot comes into existence and opens wide, while another money spigot that was already there opens a little wider.

Now let me caveat this by explaining that, in principle, there is nothing wrong with PACs and lobbyists having some kind of relationship with elected officials.

Modern legislation is complicated, government policies are complex, and lobbyists help elected officials understand the implications of various courses of action - hopefully steering government down a path that is wiser than what would be followed in the absence of such clarifications.

And, as lobbyists, supporters and other interested individuals develop a relationship with an elected official, the relationship often turns into a friendship. After all, we have a government of the people, by the people, and for the people; our elected officials are people, and what is wrong with them having friendships with concerned citizens?

But, you know, once these guys with the money open their spigot, money flows...

A corporate executive donates to a candidate. The executive also donates to a PAC, which donates to the candidate. Sometimes, the money flows from the PAC to another PAC, and thence to a candidate. Meanwhile, other executives from the same corporation also donate to candidates and PACs. Like the route petroleum takes, from its original form in the ground to its form as aviation fuel getting pumped from a tanker to another aircraft high up in the sky, the paths money takes can be long and twisted, but the trails are there to follow.

I wonder if there is more to this tanker issue than just aviation fuel in the sky for our nation's military birds...

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