March 10th, 2008
This is a delicious piece by Wayne Madsen.
The McCain/Rove defence contractor shake down game
By Wayne Madsen
EADS Air Force tanker deal enriched campaign coffers of McCain and pockets of Karl Rove.
The recent major Air Force award of the KC-45A tanker contract to European Aeronautic defence and Space Co., the parent firm of Europe’s Airbus Industries, and Northrop Grumman involves political payoffs and dubious lobbying by top Republican officials, including GOP presumptive presidential nominee John McCain, according to knowledgeable sources who spoke to WMR on the condition of strict anonymity.
Boeing, which proposed its Boeing 777 for the Air Force contract to replace the aging KC-135 Boeing 707 fleet, criticized the award to EADS-Northrop because the 179 A330 aircraft are to be built in France and shipped to a proposed factory in Mobile, Alabama for retrofitting for tanker use.
The background to the awarding of the contract to EADS lies at the very heart of the GOP corruption in Alabama that saw the political prosecution of former Alabama Democratic Governor Don Siegelman. The award of the Air Force contract to EADS-Northrop was the result of high-level collusion between Governor Bob Riley of Alabama, the White House, and John McCain. It also helped that two senior Bush administration officials, Deputy Secretary of defence Paul Wolfowitz and former Vice President Dick Cheney Chief of Staff I. Lewis “Scooter” Libby once served as highly-paid advisers for Northrop Grumman.
When EADS decided it wanted to compete for the lucrative Air Force contract it first required a top lobbyist in Washington to see to its interests. EADS tapped Stewart Hall of the lobbying group Hall, Green and Rupli to lobby for the tanker contract. Hall, Green and Rupli eventually became the Federalist Group with Hall serving as its CEO.
WMR’s sources report that soon after Karl Rove moved to Washington in 2001 he decided he wanted a piece of the contracting pie. Rove convinced the Federalist Group to accept a merger with Wayne Berman, the chairman of Berman Enterprises and a member of the Bush-Cheney 2000 Transition Team. The merger was consummated in 2004, a year before the Air Force tanker contract was to become swamped in controversy stemming from criminal charges being brought against a senior Air Force procurement official and Boeing over fraud involving the KC-45A contract.
Berman is a good friend of Rove and influential as the vice chairman of the London-based private banking firm Jardine Lloyd Thompson and chief lobbyist for Lazard Freres and the Carlyle Group. Berman’s wife Lea was Vice President Dick Cheney’s social director before taking on the same duties for First Lady Laura Bush. Berman was also a close adviser to then- House Majority Leader Tom DeLay and helped steer Reliant Energy funds into DeLay’s Texas Republican Majority PAC (TRMPAC). Berman was one of 19 members of DeLay’s so-called “Kitchen Cabinet” that also included now-imprisoned lobbyist Jack Abramoff, former DeLay Chief of Staff Ed Buckham of the Alexander Strategy Group, former G.W. Bush Deputy Director of the Office of Management and Budget and current General Electric Government Affairs director Nancy Dorn (the EADS-Northrop contract specifies the use of GE engines for the KC-45A), American for Tax Reform director Grover Norquist, and former New York Representative Bill Paxon.
Most of the Federalist Group’s lobbying contributions ended up in the coffers of Alabama Republican Senators Richard Shelby and Jeff Sessions, Alabama Republican Representative Terry Everett, and Mississippi Senator Trent Lott.
In 2005, as the controversy with Boeing over the Air Force tanker deal hit the news, the Federalist Group sold to the huge advertising firm Ogilvy and Mather, which is now part of the larger ad giant, the WPP Group. The sale price was $60 million and WMR’s sources revealed that Rove received a cut in the deal.
WMR has also been told that the EADS-Northrop contract, said to be potentially worth as much as $100 billion and, eventually, possibly double that amount, also came with percentages of the deal going to Rove as well as McCain’s presidential campaign coffers.
The greasing for the EADS contract also involved Riley, who began cementing the EADS deal while he served until 2002 and his election as governor as a member of the House Armed Services Committee’s Strategic Forces Subcommittee, the committee with oversight for the Air Force tanker contract. After Riley left the House to take up the governorship of Alabama, the nurturing of the EADS deal fell to Everett, who was also a member of the House Armed Services Committee. From the Senate side, Senate Armed Services Committee chairman McCain, knowing how much money from EADS-Northrop could end up in his 2008 campaign coffers, turned the screws on Boeing.
McCain held hearings beginning in 2003 on favoritism between Air Force officials like Darleen Druyun, the deputy assistant Secretary of the Air Force for Acquisition and Management, and senior official of Boeing. Druyun and then-Air Force Secretary James Roche were accused by McCain of favoring a deal whereby Boeing would lease Boeing 767s to the Air Force as refueling tankers rather than striking a more cost-effective deal with Airbus. McCain said Druyun had provided proprietary Airbus pricing data to Boeing.
Druyun has left the Air Force as a career employee and joined Boeing’s missile defence division. However, she soon faced a criminal investigation over criminal conflict-of-interest conspiracy. Moreover, she was accused of seeking personal favors from Boeing in return for favorable contract consideration. The favors included a job for her Druyun’s daughter, her son-in-law, and herself.
Druyun pleaded guilty to the charges brought against her and was sentenced to 16 months in prison. Boeing’s Chief Financial Officer Michael Sears also pleaded guilty and Boeing’s CEO, Phil Condit, resigned. Roche and Assistant Secretary of the Air Force for Acquisitions, Marvin Sambur, Druyun’s immediate superior, resigned. McCain held up confirmation of their replacements until he was assured that pro-EADS/Northrop people were put in charge. WMR has been told that MCain’s dislike for Boeing was based solely on the fact that Boeing did not offer McCain a cut in the contract while EADS made it clear early on that McCain would receive a piece of the contract pie. McCain obviously did not like the fact that Druyun was playing the same game with Boeing that he was playing with EADS.
An examination of the Druyun case file at the US District Court for Eastern Virginia revealed that pleas for a light sentence were received by the presiding judge from a number of retired Air Force officers, many of them generals.
In 2007, Riley and Representative Jo Bonner from Mobile led an Alabama delegation to the Paris Air Show where they wined and dined guests along with officials of EADS/Northrop Grumman. One guest at the Alabama pavilion was Air Force Secretary Michael Wynn. Although Alabama stands to gain 7000 jobs at the new EADS/Northrop plant in Mobile, Boeing may shut down operations in Alabama that may result in a job loss of 10,000, which means a net job loss of 3000 for Alabama.
The charges that McCain accepted bribes from EADS/Northrop in return for his support on the Air Force tanker contract are serious and enough to derail his presidential ambitions. His former House colleague, Randy “Duke” Cunningham, is serving a long prison sentence for accepting bribes worth much less than what McCain is accused of accepting from EADS/Northrop Grumman and their lobbyists. As for Rove, he has been cashing in for years on his close relationship with George W. Bush. That malfeasance appears to be continuing unabated…
Entry Filed under: More on Karl