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McCain under fire over Pentagon contract

By Andrew Ward in Washington

Published: March 11 2008 19:30 | Last updated: March 11 2008 19:30


John McCain faced fresh scrutiny of his role in the award of a $35bn (€23bn, £17bn) Pentagon contract to EADS on Tuesday after it emerged that some of his top advisers lobbied for the European aerospace group to win the deal.

Mr McCain, the presumptive Republican presidential nominee, has portrayed himself as a neutral watchdog in the long battle between EADS and Boeing to supply a new generation of refuelling tanker aircraft to the US air force.


But the revelation that three of his aides lobbied for EADS threatened to deepen the perception that Mr McCain helped steer one of the biggest military procurement contracts in recent years into foreign hands.

Tom Loeffler was serving as national finance co-chair of the McCain campaign when his lobbying firm, the Loeffler Group, was recruited by EADS last year. Susan Nelson, a former Loeffler lobbyist who represented EADS, later joined the McCain campaign as finance director. John Green, a lobbyist for Ogilvy Gov­ernment Relations, also worked for EADS before joining the McCain campaign on a volunteer basis recently.

The McCain campaign said none of the three had lobbied the Arizona senator on the tanker deal.

Mr McCain played a central role in opening the contract to competition after helping expose a corruption scandal surrounding an earlier deal for Boeing to supply the aircraft.

He twice wrote letters to the Pentagon pressing for bidding rules that gave EADS a fair chance – although he insists he never lobbied for the group to win the contract. His campaign said both letters were sent long before any of his advisers were involved in lobbying for EADS. “I never weighed in for or against anybody that competed for the contract,” Mr McCain said this week. “All I asked for was a fair process.”

But critics, including Nancy Pelosi, the Democratic House speaker, have accused him of complicity in the outsourcing of thousands of jobs to Europe that would otherwise have gone to Boeing workers in the US.

Anger against Mr McCain is greatest in the states of Washington and Kansas, where Boeing has its biggest plants. Boeing announced on Monday that it would appeal against the decision to award the contract to EADS.

Mr McCain has argued that his actions helped save taxpayers billions of dollars by bringing competition and transparency to the bidding process. “I intervened in a process that was clearly ­corrupt. That’s why people went to jail,” he said this week, referring to an air force official and a former Boeing executive who were prosecuted in relation to the scandal.

EADS, the Franco-German parent of Airbus, will build the tankers in partnership with US-based Northrop Grumman, creating jobs in both the US and Europe.

McCain shuffles staff as criticism mounts

By Andrew Ward in Washington

Published: July 3 2008 00:04 | Last updated: July 3 2008 00:04

John McCain has reshuffled his senior campaign staff amid mounting Republican concern at his ability to compete with Barack Obama in November’s election.

The Republican presidential candidate has put Steve Schmidt, a combative former aide to Dick Cheney, the vice-president, in charge of day-to-day operations in an effort to sharpen his campaign. Rick Davis, a longtime McCain ally, will remain campaign manager but shift his focus to long-term strategy.


The shake-up follows weeks of grumbling among conservative commentators and some Republican operatives at Mr McCain’s performance. Critics say his campaign has been erratic and error-prone and slow to build grassroots operations in swing states.

McCain officials dismiss much of the criticism as Washington tittle-tattle, pointing out that Mr Obama’s average five-point lead in recent national opinion polls is hardly insurmountable. They argue it should be Democrats who are alarmed by the tightness of the race, given the strength of political headwinds blowing against the Republicans. But Wednesday’s staff changes indicate that some of the concerns are shared by Mr McCain.

Mr Schmidt is a protégé of Karl Rove, the former political adviser to President George W. Bush. He shares his mentor’s aggressive approach to politics. He was a communications officer with Mr Bush’s 2004 re-election campaign and managed Arnold Schwarze­negger’s re-election campaign as California governor two years later.

Mr McCain arrived in Mexico on Wednesday on the final leg of a Latin American tour intended to trumpet support for bilateral trade deals. Critics seized on the trip as an example of the campaign’s muddled strategy, questioning why Mr McCain was highlighting a policy so at odds with public opinion.

A CNN poll this week found that 51 per cent of Americans view free trade as a threat to the US economy – the first time a majority had expressed such an opinion.

Mr McCain’s advocacy of trade liberalisation contrasts with the more labour-friendly approach adopted by Mr Obama, as economic insecurity deepens. The Arizona sen­ator said he aimed to convince Americans that protectionism would only worsen the outlook.

This week’s trip to Mexico and Colombia is undertaken less than a month after Mr McCain visited Canada to speak in defence of the North American Free Trade Agreement (Nafta). Congressional Democrats are blocking a free trade deal with Colombia and Mr Obama has vowed to renegotiate Nafta.

Terry Thurman, of the United Autos union, which supports


        From Truthout.Org:  http://www.truthout.org/article/mccains-boeing-battle-boomerangs


McCain’s Boeing Battle Boomerangs


by: Michael Isikoff, Newsweek

Boeing worker Sandy Hasting protests the selection of European Northrop Grumman and Airbus to supply air-refueling tankers for the US Air Force.
(Photo: Dan DeLong / AP)

    One of John McCain’s most celebrated achievements in recent years was his crusade to block a Pentagon contract with Boeing for a new fleet of midair refueling tankers. Incensed over what he denounced as a taxpayer “rip-off,” McCain launched a Senate probe that uncovered cozy relations between top Air Force officials and Boeing execs. A top Air Force officer and Boeing’s CFO ended up in prison. Most significantly, the Air Force was forced to cancel the contract – saving taxpayers more than $6 billion, McCain asserted.

    But last week, McCain’s subsequent effort to redo the tanker deal was dealt a setback. Government auditors ruled that the Air Force made “significant errors” when it rebid the contract and awarded the $35 billion project to Boeing’s chief rival, partners European Aeronautic Defense and Space Co. (or EADS) and Northrop Grumman. It’s likely the Air Force will have to redo the bid yet again, which analysts say will delay the replacement of the fleet’s 1950s-era refueling tankers. The auditors’ ruling has also cast light on an overlooked aspect of McCain’s crusade: five of his campaign’s top advisers and fund-raisers – including Tom Loeffler, who resigned last month as his finance co-chairman, and Susan Nelson, his finance director – were registered lobbyists for EADS.

    Critics, including some at the Pentagon, cite in particular two tough letters McCain wrote to Deputy Secretary of Defense Gordon England in 2006 and another to Robert Gates, just prior to his confirmation as Defense secretary. In the first letter, dated Sept. 8, 2006, McCain wrote of hearing from “third parties” that the Air Force was about to redo the tanker competition by factoring in European government subsidies to EADS – a condition that could have seriously hurt the EADS bid. McCain urged that the Pentagon drop the subsidy factor and posed a series of technical questions about the Air Force’s process. “He was trying to jam us and bully us to make sure there was competition by giving EADS an advantage,” said one senior Pentagon official, who asked for anonymity when discussing a politically sensitive matter. The assumption within the Pentagon, the official added, was that McCain’s letters were drafted by EADS lobbyists. “There was no one else that would have had that level of detail,” the official said. (A Loeffler associate noted that he and Nelson were retained by EADS after the letters were drafted.)

    Chris Paul, who serves as McCain’s top aide on the issue, wrote in an e-mail to NEWSWEEK that “the letters … were absolutely not provided, or drafted, by EADS or Northrop Grumman or … submitted on their behalf. Those letters arose from, and reflect, Senator McCain’s longstanding interest in … full and open competition.” The campaign would not allow Paul to answer follow-up questions about whether McCain had input from EADS lobbyists on the letters or about the identity of the “third parties.” McCain said last week his “paramount concern” was “that the Air Force buy the most capable aerial refueling tankers at the most reasonable cost.” But some defense analysts say the controversy over the Air Force rebid – and the higher costs that will result – have taken some of the shine off McCain’s efforts. “This shows how a sort of naive crusade for good government can actually backfire,” said Loren Thompson, of the Lexington Institute, a defense think tank.