Boeing denies insider information allegations

? Boeing Co. rejected published reports Friday that it might have obtained rival bidder Airbus SAS’s proprietary information en route to a proposed $22.5 billion refueling tanker lease-purchase agreement with the U.S. Air Force.

“Boeing believes we did not receive any proprietary information from any official on any subject throughout the entire tanker lease-negotiation process,” said Doug Kennett, a spokesman for the Chicago-based company in Washington.

Earlier in the day, the Seattle Post-Intelligencer, citing an unnamed source, reported what it called new allegations that an unnamed senior Air Force official had “provided Boeing with proprietary information” about Airbus’s offer to modify its A330 for the refueling mission.

Boeing operates a manufacturing plant in Wichita that is expected to receive work from the tanker project.

The Defense Department’s Office of Inspector General, an in-house watchdog that investigates alleged fraud, waste and abuse, said it was aware of Boeing’s statement.

“We can neither confirm nor deny that we’re looking into any such matter,” said Shaun Wiggins, a spokesman for Inspector General Joseph Schmitz.

The Air Force announced on March 28, 2002, that the preliminary Airbus tanker offer represented a “higher-risk technical approach and less-preferred financial arrangement” than that advanced by Boeing.

The service went on to negotiate what critics have called a sweetheart deal with Boeing, whose commercial aircraft sales slumped after the September 2001 hijacked airliner attacks on the United States.

Under the proposed lease, Boeing would deliver 100 of its modified 767 aircraft to start replacing KC-135E tankers, which form the Air Force’s oldest combat aircraft fleet, averaging 43 years old. The deal would mark the first time the Pentagon has rented, rather than bought outright, a major new weapons system.

The French-German aerospace firm that controls Airbus said its reply to the U.S. Air Force’s original request for tanker bids was “proprietary in nature and was furnished to the Air Force in confidence.”

“We fully expected that information to be protected,” said Diane Murphy, a spokeswoman in Washington for European Aeronautic Defense and Space Co. the European consortium that owns 80 percent of Airbus. Britain’s BAE Systems Plc owns the rest of Airbus.

Gloria Cales, a U.S. Air Force spokeswoman, said the service was not aware of any investigation.

Critics of the proposed lease deal have faulted it for, among other things, rewarding Chicago-based Boeing at a time that the company’s corporate ethics have been questioned by some.

On July 22, the Air Force charged that Boeing, the Pentagon’s second-biggest supplier, had committed “serious violations of federal law” in obtaining documents from rival Lockheed Martin Corp., the No. 1 U.S. defense contractor, to win a $1.5 billion rocket contract in 1998.

Boeing — which admitted that its employees had improperly obtained Lockheed documents but denied that they had helped it win the contract — was stripped of seven rocket launches by the Air Force, which gave them to Bethesda, Maryland-based Lockheed. The suspended launch contracts were worth about $1 billion.

Sen. John McCain, an Arizona Republican who has speared the proposed tanker contract as a sweetheart deal for Boeing, was due to release documents in the next 24 hours that his allies say could raise new questions about the tanker deal.

“McCain has potentially explosive documents that I hope will change some minds,” Keith Ashdown of Taxpayers for Common Sense, a federal-budget watchdog group, told the Post-Intelligencer.

McCain, chairman of the Commerce Committee that is to hold hearings on the deal on Wednesday, probably will release the documents today, said a spokeswoman, Rebecca Hanks.