Tue Mar 11, 7:21 AM Pacific

McCain, top advisers lobbied for Airbus deal that cost U.S. jobs

Oh my:

McCain Advisers Lobbied for Airbus

WASHINGTON (AP) — Top current advisers to Sen. John McCain's presidential campaign last year lobbied for a European plane maker that beat Boeing to a $35 billion Air Force tanker contract, taking sides in a bidding fight that McCain has tried to referee for more than five years.

The thing is, John McCain hasn't exactly been a neutral referee -- in fact, he's done a lot to help Airbus.

In 2006, McCain lobbied the Bush Administration to change its procurement practices so that Airbus, along with its partner Northrop Grumman, could bid on a $35 billion U.S. Air Force contract that may eventually be worth $100 billion. Well, McCain's hard work paid off and two weeks ago, the Airbus-Northrop consortium won the contract, beating out Boeing.

As a result, thousands of jobs that would have been created and supported here in the United States will instead go overseas.

And now it turns out that John McCain's campaign team has at least three lobbyists who were hired by Airbus to help the European aerospace giant win that very same contract.

Can you say: we got him?

Here's more from the article:

Two of the advisers gave up their lobbying work when they joined McCain's campaign. A third, former Texas Rep. Tom Loeffler, lobbied for the European Aeronautic Defence and Space Co. while serving as McCain's national finance chairman.

EADS is the parent company of Airbus, which teamed up with U.S.-based Northrop Grumman Corp. to win the lucrative aerial refueling contract on Feb. 29. Boeing Co. Chairman and CEO Jim McNerney said in a statement Monday that the Chicago-based aerospace company "found serious flaws in the process that we believe warrant appeal."

McCain, the Republican presidential nominee in waiting, has been a key figure in the Pentagon's years long attempt to complete a deal on the tanker. McCain helped block an earlier tanker contract with Boeing and prodded the Pentagon in 2006 to develop bidding procedures that did not exclude Airbus.

Background:

On February 29, in a stunning victory for the European aerospace industry, EADS (the parent company of Airbus) and Northrop Grumman won a $35 billion contract from the U.S. Air Force to replace its aging fleet of aerial refueling tankers. Boeing had widely been expected to win the contract, which would have supported 44,000 new and existing jobs at Boeing and and unspecified number of jobs at more than 300 suppliers in 40 states.

By contrast, the Airbus contract will create just 2,000 jobs in Alabama, although Airbus says it will also support 25,000 jobs at suppliers nationwide.

And John McCain is number one reason that Airbus got the contract.

In the fall of 2006, as the procurement process began, the USAF indicated that factor in the impact of foreign government subsidies on any company bidding aerial tanker contract. The USAF rationale was that it wasn't fair to ask U.S. companies to compete against foreign companies receiving subsidies from overseas governments.

Airbus, which receives subsidies from European governments, firmly opposed the consideration of those subsidies. Airbus argued that Boeing in effect receives subsidies in the form of tax incentives and bloated defense contracts. (Ironically, now that Airbus has won the contract it is beneficiary of tax incentives in Alabama were some of the work will be done, a bloated defense contract, AND subsidies from European governments.)

McCain sided with Airbus.

On September 8, 2006, McCain wrote a three page letter to Gorden England, Deputy Secretary of Defense, sternly arguing against consideration of the government subsidies, and taking England to task for allegedly doing an end-run around McCain. Ten days later, McCain penned another sharp letter to England. McCain also approached both Donald Rumsfeld and Robert Gates on the issue.

McCain argued that by considering government subsidies, the USAF would effectively block Airbus from submitting a competitive bid. He presented himself as an impartial actor, interested only in the best interests of the American taxpayer.

On a superficial level, McCain seemed to have a reasonable argument, saying that by factoring the subsides in “the Air Force will risk eliminating competition before the bids are submitted.”

Boeing, on the other hand, argued that it could not possibly compete against a company subsidized by a foreign government. I think most people would agree with Boeing's side: by not factoring in subsidies, they were handed a severe handicap.

Nonetheless, McCain's position won out, and 18 months later Airbus won the contract -- a contract it could never have possibly received were it not for John McCain's active intervention.

And now we know that former Airbus lobbyists are top officials on John McCain's campaign.

Couldn't have happened to a nicer guy.

2001: The first tanker deal

The story goes back to at least 2001, when the Air Force and Boeing hatched a different deal, this one to lease aerial refueling tankers. McCain pounced on the deal as an example of Washington corruption.

McCain had a point. The deal was a dog. Ultimately, the Secretary of the USAF and the CEO of Boeing lost their jobs, and two Boeing executives were sent to jail in connection with corruption on the case.

By 2004 the deal was scuttled and John McCain boasted of saving taxpayers $6 billion by killing the deal, a claim he proudly repeats to this day.

It is very important to remember that the 2001 Boeing deal is NOT the same as the current deal. When the new process began in 2006, Boeing was a different company and different officials staffed the USAF procurement office.

When McCain is challenged on this issue, he predictably emphasizes the first phase of the aerial tanker issue, but don't get confused by the okie-doke -- the real issue is what has happened from 2006 to present.

McCain-Airbus connection in 2001/2?

Before jumping forward, I have one note to add about the original deal. I was a senate staffer, involved in this issue on the periphery.

The thing that I remember most vividly from either late 2001 or 2002 was the strange fervor with which McCain fought against this deal in particular -- and the assertion by one of my colleagues that two or three of McCain's former staffers were lobbyists for Airbus.

I have subsequently tried to validate this, but haven't found anything in the press. It shouldn't be too hard to do though for someone who has the time to go through McCain's staff history and then lobbying registry.

When I saw the news today that three members of McCain's team helped Airbus win the contract -- and that one of them continues to work for Airbus -- it reminded me of what I'd been told several years ago.

We got him -- or at least we're close.

People hate lobbyists and corruption. But they REALLY hate sending jobs overseas.

Mix lobbyists, even if they aren't corrupt, with jobs getting sent overseas.

Toxic. Politically lethal.

Already, John McCain is the target from people who feel screwed by this job-killing deal. As more people hear about it -- especially in places like Ohio and Pennsylvania -- they will get angry.

We've GOT to make him own this issue.

Think it: John McCain sent thousands of jobs overseas and his lobbyist friends got rich.

That's not gonna' play in peoria.

People around the country hate John McCain on a bipartisan basis because of this deal

There's a strong reservoir of ill will towards John McCain in Washington, Missouri, Kansas, California, and Illinois in particular.

Boeing backers blame McCain for losing deal By ERIC ROSENBERG P-I WASHINGTON BUREAU

Supporters of The Boeing Co. blame Sen. John McCain, the presumptive Republican presidential nominee, for the company's failure to win the lucrative $35 billion contract to build new Air Force aerial refueling tankers.

The Air Force last week awarded the contract to a team of Airbus parent EADS and Northrop Grumman Corp., triggering a firestorm from Boeing advocates who said the victory by the European-led consortium ignored American national security interests and would cost U.S. jobs.

Boeing advocates say McCain was a major force behind the Air Force decision to ignore the issue of government subsidies to Airbus when the tanker contract was put up for competitive bidding last year.

Rep. Norm Dicks, a moderate Democrat who has the respect of Republicans, blasted McCain:

"The only reason that (Airbus) could even bid a low price is because they receive a subsidy," said Rep. Norm Dicks, D-Wash., whose Seattle-area district includes thousands of Boeing workers. "Senator McCain jumped into this and said that they (the Air Force) could not look at the subsidy issue, which I think is a big mistake," he told PBS.

More from Norm Dicks:

"I hope the voters of this state remember what John McCain has done to them and their jobs," said Rep. Norm Dicks, D-Wash., whose state would have been home to the tanker program and gained about 9,000 jobs.

Even Darcy Burner’s opponent sounded off against McCain:

"John McCain will be the nominee and I will support him, but if John McCain believes that Airbus or EADS is the company for our Air Force tanker program he's flat-out wrong - and I'll tell him that to his face," said Rep. Dave Reichert, R-Wash.

A Kansas Republican joined in the McCain bashing:

Rep. Todd Tiahrt, a Kansas Republican whose district includes a Boeing plant that could have gained hundreds of new jobs from the tanker program, said McCain's role in killing the earlier deal is likely to become an election issue. Both of the leading Democratic candidates for president, Barack Obama and Hillary Clinton, have criticized the Air Force decision.

"I think we absolutely will hear more about it," Tiahrt said. "We'll hear it mostly from the Democrats and they have every right to be concerned."

In Missouri, Kit Bond hasn't criticized McCain, but he has criticized the deal. I haven't seen anything yet from Claire McCaskill, but no doubt she'll be a good surrogate on this issue.

This morning, a political reporter for the St. Louis Post-Dispatch wrote:

But now that the contract has been re-bid several years later, many of those jobs that would have gone to Boeing will now go overseas to EADS. And that could quickly become a liability for McCain in St. Louis and other cities with Boeing facilities.

The more people know about this issue, the angrier they get -- and I mean really, really mad. Last November, Rep. Adam Smith (D-WA) -- hardly a partisan firebrand said this:

"The other problem is, John McCain hates us," he said, referring to the Republican senator from Arizona. "He hates us, and he is a man who focuses his hatred for a lengthy period of time, not one to give in to the whole notion of bygones and all of that. ... People went to jail, OK. We dealt with it."

This wasn't some potshot at the GOP nominee -- back in November, John McCain was toast, remember? This was a heartfelt expression of fury.

I've followed Adam Smith's career for a long time. When I was growing up on Beacon Hill (in Seattle, not Boston), the older sister of one of my friends who lived next door told me all about him (she was friends with him somehow) and I've kept tabs on him since.

Adam Smith doesn't talk like that often. It's an honest expression of anger -- an anger I share.

It's an anger that crosses party lines. Even if you're not a hawk -- and I'm not, even if you're not sure if we should spend this money on defense, the one thing almost everybody can agree on is that we should not be creating jobs overseas when we're on the cusp of a recession.

Just do a bit of Googling on John McCain and Airbus. You'll see that the anger spreads across ideological lines, across party lines, across regional lines. This thing is a stinker.

This should become John McCain's albatross. It's not just posturing -- he was really wrong to stand up and fight for a foreign company -- especially a foreign company with whom he has close lobbyist connections.

Starting to become a campaign issue:

Ever since the contract was awarded 12 days ago, this has started to become an issue on the campaign trail.

McCain’s response has been misleading, shifting the focus away from his 2006 actions and onto what he did in 2001 -- and effectively calling his opponents corrupt.

"In all due respect to the Washington delegation, they vigorously defended the process before - which turned out to be corrupt - which would have cost the taxpayers more than $6 billion and ended up with people in federal prison," he said. "I'm the one that fought against that ... for years and brought down a corrupt contract."

McCain's answer is a total deflection, sidestepping the question of whether he was right to intervene in 2006 on behalf of Airbus to defend their right to make a bid without having their government subsides taken into account.

McCain's implication that his detractors are unethical gives you a window into why so many reasonable members of Congress absolutely loathe John McCain -- and why he wold be such an ineffective president.

Don't let McCain confuse the 2001 deal with the 2006 deal

As this issue develops, we can't let McCain get away with the 2001 deflection.

If the media and the Obama campaign (or Clinton if she pulls it out) don't stay focused on the 2006 side of the equation, we will lose.

At the risk of being repititios, the issue is what John McCain did in 2006.

Even if it is proven that McCain's 2001 actions were tied to lobbyists, it still isn't the most fertile ground for us. The key is what happened in 2006 and the jobs it will cost.

It's easy to get confused and forget that what happened from 2001-2004 is separate from 2006. Hell, I've made the mistake myself.

Right in the middle of a recession. All thanks to John McCain. And we still haven't gotten any tankers.

Boeing is motivated and will fight back and fight back hard

We will have help from a Boeing on this.

They will not go away quietly. The company is fighting back against McCain, urging an investigation of the deal.

The Government Accountability Office (GAO) will examine the process by which Northrop Grumman and EADS won the deal.

"Our team has taken a very close look at the tanker decision and found serious flaws in the process," Boeing chairman Jim McNerney said.

The GAO, which is part of Congress, will have 100 days to investigate.

Mr McNerney said he believed Boeing submitted the most "capable, lowest risk" aircraft as measured against the air force's request.

For once, a major corporate interest might actually find itself aligned with the Democrats. Strange bedfollows, eh?

And let us not forget that Boeing is an Illinois company. It can't hurt them to have the President coming from their hometown (assuming that Obama wins, which he will).

Top Airbus execs gave John McCain $12k:

After winning the subsidies consideration issue, he received $12,000 for Airbus executives in political contributions, not a lot by some the standard of a $100,000,000 campaign, but you have to remember – John McCain isn’t Barack Obama or Hillary Clinton when it comes to fundraising.

Final thoughts:

I think this issue presents an opportunity for Barack Obama to begin to engage John McCain as if he were already the nominee.

It's especially powerful for Obama because it gives him an opportunity to turn the table on the underlying message behind the grotesque smears coming from McCain surrogates like Steve King or Mark Shurtleff, the Utah AG.

They are really trying to challenge Obama's commitment to America -- what better way for Obama to demonstrate it than to fight against John McCain's efforts to ship American jobs overseas?

This is the kind of debate we want to be having in places like Ohio and Pennsylvania.

McCain's position is just untenable.

And the time to hit him is now.

Recommended reading:

3/11/2008 - Could Boeing’s loss be McCain’s as well? (St. Louis Post-Dispatch assesses political impact of McCain's Airbus deal on Missouri, in which Boeing has a major presence.)

3/11/2008 - Boeing to protest at tanker deal

3/11/2008 - Boeing filing protest today over tankers

3/11/2008 - McCain Advisers Lobbied for Airbus

3/10/2008 - A Good Deal of Credit to McCain for Stopping a Bad Deal (A misleading NRO article defending McCain that does as much as possible to confuse the 2001 and 2006 deals, like I warned against.)

3/10/2008 - In Tanker Bid, It Was Boeing vs. Bold Ideas (This is a pro-Airbus perspective)

3/8/2008 - Angry Boeing Supporters Target McCain

3/7/2008 - Boeing backers blame McCain for losing deal

3/6/2008 - McCain's Airbus bucks

3/4/2008 - Boeing Boomerangs On McCain

3/3/2008 - Tanker Contract Opposed by McCain Resurfaces

3/3/2008 - Airbus On The Up Thanks To Boeing Defeat

3/2/2008 - Boeing may rethink relationship with Air Force after tanker contract loss (More perspective from Missouri.)

3/1/2008 - Air Force tanker deal could be campaign issue

3/1/2008 - Airbus parent beats Boeing for big U.S. Air Force contract

2/29/2008 - Machinists Union Blasts Tanker Decision

2/29/2008 - Northrop and EADS Win Refueling Tanker Deal