[Congressional Record Volume 154, Number 96 (Wednesday, June 11, 2008)]
[Senate]
[Pages S5465-S5466]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                     AWARDING OF DEFENSE CONTRACTS

  Mrs. MURRAY. Mr. President, last week the Defense Secretary took 
historic action by forcing out both the Air Force Secretary, Michael 
Wynne, and its Chief of Staff, Michael Moseley. It was the first time 
ever that a Defense Secretary has simultaneously dismissed a service 
secretary and a service chief, and he did so after finding systemic 
problems in the Air Force that led him to have a serious lack of 
confidence in their leadership and oversight.
  I have come to the floor today because Secretary Gates's move raises 
red flags about many of the Air Force's recent actions, including the 
decision to award a $35 billion contract to build the next generation 
of aerial refueling tankers to the European company Airbus instead of 
Boeing. This is one of the largest contracts in history, and it is 
critically important. Our tankers refuel planes and aircraft from every 
single branch of our military. As long as we control the technology to 
build them, we control our skies and we control our own security. So I 
was astounded when the Air Force announced in February that it would 
award this contract to Airbus, and here is why.
  Airbus and its parent company, European Aeronautic Defense and Space, 
or EADS, have made no secret of their desire to dismantle the U.S. 
aerospace industry, and we have seen time and again that Europe is 
willing to try anything in order to do that. EADS is so flooded with 
subsidies from the European Union that we, the United States, have 
accused the EU of illegal business practices before the World Trade 
Organization. EADS has lied repeatedly about its contribution to the 
U.S. economy, and EADS has given us more than one reason to question 
how hard it will work to protect our security interests.
  Given this history, I have asked repeatedly over the last 3 months 
that Air Force leaders explain how they came to their decision. After 
all, the Air Force is well aware of these concerns, and I believe the 
American taxpayers deserve answers. But I have been stonewalled again 
and again. As the Pentagon moves to restore its leadership in the Air 
Force, I hope we will finally get some answers.
  Let me begin today by talking about the unfair trade practices that 
led the United States to challenge Europe at the World Trade 
Organization.
  Back in 1970, several European governments created Airbus to 
challenge our country's aerospace dominance. But unlike Boeing, which 
is a private business operating in a free-market system, Airbus 
followed the corporate welfare model. Europe views Airbus as a jobs 
program, and it is willing to provide subsidies no matter what, even if 
they lose money and even if their products fail. That means Airbus can 
grow without having to assume the same kind of risk American companies 
do.
  The U.S. Trade Representative is so concerned that this has created 
an uneven playing field that we have demanded that Europe stop the 
subsidies and play by the rules. As I said earlier, because of Europe's 
illegal tactics, our Government now has a WTO case pending against the 
EU. So I think it would make absolutely no sense that we would on the 
one hand haul Airbus before an international dispute settlement 
organization while on the other hand award it one of the largest 
defense contracts in history, a contract that will make it a major U.S. 
defense supplier for decades and further erode the American aerospace 
industry. It is as if you caught a thief in the act of stealing your 
car, but instead of turning him in, you hand him the keys and you give 
him your wallet too.
  It is not just a matter of one government branch contradicting 
another. It was that illegal system that allowed Airbus to develop the 
A330. Airbus's tanker received millions of dollars in launch aid, which 
significantly reduced its production costs. Europe is now unfairly 
using that break to get into our defense industry. The result could be 
significant permanent harm to our aerospace industry.
  Boeing spent decades developing the technology and training the 
workforce to supply our military tankers. Boeing has made American 
refueling tankers now for more than 50 years. Our workers have made 
them with pride because they know they help to fortify our military 
strength. But with this Air Force decision, we are letting all of that 
slip away. Once our workers move on to something else, we just can't 
recreate this industry overnight. So I think we, as a Congress and as a 
nation, need to think long and hard about whether that is the best 
decision for our national security.
  But it isn't just Europe's record of subsidizing EADS that I am 
concerned about. EADS and Airbus also have a long history of creating 
slick marketing campaigns that distort their contribution to our 
economy. So I want to turn to that next because I fear EADS is being 
less than honest about its plans to create jobs with this tanker 
contract.
  Five years ago, when Airbus was first working to unravel Boeing's 
tanker contract, Airbus and EADS hired a small army of PR specialists 
to assert to us that their business was good for America.
  As you can imagine, I was skeptical so I asked the Commerce 
Department to investigate their claims, and guess what they found. They 
found that Airbus's numbers were hugely inflated. Airbus claimed it had 
created 100,000 American jobs, but after looking into it the Commerce 
Department found the real number was 500. Airbus said it contracted 
with 800 U.S. firms. The Commerce Department found it was 250.
  Then Airbus did something funny--it decreased the number of contracts 
it said it made from 800 down to 300, and then it increased the alleged 
value of those contracts from $5 billion to $6 billion a year.
  As I said at the time, you cannot trust Airbus's funny numbers. The 
same is true today. When you scrutinize the facts, Airbus's numbers do 
not hold up. This time, Airbus says it will finish these tankers here 
in the United States at a factory in Alabama. But there is no plant in 
Alabama. It has not been built and there are no workers yet hired.
  Economists are now saying we are actually going to lose jobs if 
Airbus supplies our tankers. A study last week by the nonpartisan 
Economic Policy Institute shows that Boeing would create at least twice 
as many American jobs as Airbus. In other words, we stand to lose as 
many as 14,000 jobs here in the United States with this Air Force 
contract to Airbus. I cannot think of a worse time for our Nation to 
have this decision. Last month our country saw the biggest increase in 
unemployment in more than two decades, and that was on top of the 
mortgage and credit crisis and the skyrocketing gas prices we have been 
hearing about this morning.
  The Air Force said it did not have to consider jobs when it 
considered Airbus's bid, so it has not even tried to justify that 
decision. But I believe that as Members of Congress who represent the 
American people, we have a responsibility to look long and hard at 
whether this contract is in the best interests of America, its workers, 
and its economy--especially at a time when our families are struggling 
to get by.
  Finally, I have some very serious concerns about giving a company 
owned by foreign governments control over our military technology. 
Airbus and EADS have given us plenty of reason to worry about how hard 
they might work to protect our security interests. Let me give a couple 
of examples. In 2005, EADS was caught trying to sell military 
helicopters to Iran. Despite our concern about Iran's support of 
terrorists in Iraq and despite their efforts to develop nuclear 
weapons, they were caught trying to sell military helicopters to Iran. 
In 2006, EADS tried to sell C-295 and CN-235 transport and patrol 
planes to Venezuela. That is a circumvention of United States law.
  As with the other questions I have raised today, I have repeatedly 
asked the Air Force whether we, the United States, can trust a foreign 
company to

[[Page S5466]]

keep our military's best interests in mind, particularly one that has a 
history of trying to sell weapons of military technology to unfriendly 
countries.
  Mr. President, I ask for 2 additional minutes.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered. The Senator is recognized.
  Mrs. MURRAY. Mr. President, I have not received answers to those 
questions either. This is a critically important matter. What happens 
if France or Russia--which, by the way, is pushing to increase its 
stake in EADS--want to slow down our military capacity because they do 
not like our policies? Do we want another country to have that kind of 
control for decades to come--especially given the concerns the Defense 
Secretary has now raised about decisionmaking and leadership at the Air 
Force? I think we have to push for an explanation before we move 
forward on this contract.
  I have detailed this morning three very serious concerns about Airbus 
and EADS. The facts are clear. When it comes to international trade, 
EADS doesn't play fair. It has repeatedly lied about its impact on our 
economy and it has more than once given us reason to worry about how 
hard it will work to protect our security interests.
  The bidding process for the tanker contract was so flawed that Boeing 
filed its first ever protest of a defense contract decision with the 
GAO, and we are waiting for that decision. But we need to remember the 
GAO can only look at whether the Air Force followed the procurement 
laws and regulations. It cannot answer whether the Air Force should 
have awarded that contract in the first place. We, Congress, have to 
ask those questions.
  I have raised those questions in hearings, in letters to Pentagon 
officials, and in face-to-face meetings, yet no one at the Air Force or 
the Pentagon or the White House has begun to justify why we should 
award a $35 billion contract to supply the linchpin of our military 
strength to a company that another branch of our Government has accused 
of illegal business practices, one that distorts its records, and does 
not have our national security interests at heart.
  As I said at the beginning of my remarks, the Defense Secretary has 
raised serious questions about the leadership and oversight at the Air 
Force. Given those concerns, we here in the Senate and the Congress 
must examine this contract carefully, demand the Air Force explain its 
decision, and consider whether it is in our Nation's best interests to 
move forward on this contract. We owe it to our taxpayers. We owe it to 
our servicemembers. I hope with new leadership and oversight at Air 
Force, we will get those answers.
  I yield the floor.
  The ACTING PRESIDENT pro tempore. The Senator from Arkansas is 
recognized.

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