Procurement scandal cuts short Air Force general's quest for command

The procurement scandal spawned by the conviction of former Air Force contracting chief Darleen Druyun claimed its first victim in October.

Gen. Gregory S. Martin, commander of the Air Force Materiel Command, withdrew his nomination to become combatant commander of Pacific forces after he faced sharp questioning from Sen. John McCain, R-Ariz., on his comments about Druyun, with whom he had worked in the late 1990s.

Druyun was the equivalent of a three-star general and oversaw nearly every major weapons contract the Air Force awarded through the 1990s. She lost her $250,000-a-year job with Boeing last fall after questions arose about her hiring. By spring, she had pleaded guilty to secretly negotiating the Boeing job while still working for the Air Force.

At her Oct. 1 sentencing on a single count of conspiracy to violate conflict-of-interest laws, Druyun admitted to favoring Boeing with contract awards and better terms in return for her job and other favors-acts she had denied for months.

"I sincerely wish to apologize to my nation, my family and friends, and to the court for what I have done. I understand that this was wrong, and I accept full responsibility for my conduct," she told U.S. District Court Judge T.S. Ellis in Alexandria, Va. He sentenced her to nine months in a minimum security prison in South Carolina, ordered her to serve an additional seven months at a halfway house or in home detention, and fined her $5,000.

The impact of Druyun's conviction and new admissions on the Air Force, the defense industry and the acquisition reforms she championed will be felt for years. Her case has touched off a scandal that could rival the one that followed the Defense Department's Operation Ill Wind investigation in the late 1980s. That probe ended in more than 60 convictions of federal employees and contractors for bribery and contract fraud. As a result, Congress passed the 1988 Procurement Integrity Act, which established tight ethics rules for federal procurement officials.

"This looks bad for Boeing, this looks bad for the acquisition community and looks bad for the Air Force. I could not really imagine a worse situation," says a retired Air Force general officer with ties to the defense industry. The former officer asked not to be identified for fear of being tainted by the scandal.

Martin, once considered the likely successor to Air Force Chief of Staff Gen. John Jumper, suffered fallout from the Druyun case during his Oct. 6 confirmation hearing for the Pacific command post before the Senate Armed Services Committee. When McCain asked how Druyun's deceit had gone unnoticed, Martin responded by questioning whether Druyun had committed the violations of which she stood accused and saying he had seen nothing inappropriate when he worked with her. McCain angrily replied, "Now I question whether you have the quality to command," and vowed to block Martin's nomination. Martin withdrew his name the same day.

Now questions are being raised about the dozens of Air Force contracts Druyun, 56, watched over from 1993 to 2002, while overseeing procurement for the service. In July, after failing a lie-detector test, she admitted favoring Boeing in at least four contracts. Her former boss, Marvin Sambur, Air Force assistant secretary for acquisition, has asked the Defense inspector general to review all Air Force contracts awarded to Boeing since 2000. "Upon completion of each investigation, we will take appropriate action," Sambur wrote in an e-mail to the IG first reported by Bloomberg News.

Companies that competed against Boeing for the four contracts about which Druyun admitted to improprieties are filing lawsuits and contract protests. They could win financial compensation for portions of the contracts. Meanwhile, on Oct. 7, Congress approved a provision in the 2005 Defense authorization bill that prohibited the Air Force from leasing tanker refueling aircraft from Boeing under a controversial multibillion-dollar deal negotiated by Druyun.

Druyun was a fierce advocate of acquisition reforms that brought commercial business practices to the purchase of weapons systems. Backers of those reforms believe they have saved the Pentagon billions of dollars; critics charge the reforms have given contractors too much clout and reduced oversight.

John Douglass, president of the Aerospace Industries Association in Arlington, Va., says the Air Force gave Druyun far too much control over contracts and that allowed her to favor Boeing without being detected. Douglass, who served as the Navy's acquisition executive in the 1990s, says he expects the Air Force will decentralize management to acquisition managers in the field, and then have civilians at the Pentagon provide reviews and oversight.

The extent of Druyun's influence was reflected in letters to the court attesting to her integrity and citing her record as a tough negotiator. Former Air Force Secretary Sheila Widnall, former Raytheon chief executive officer Dennis Picard, and retired Air Force Lt. Gen. Lawrence Skantze are among those who wrote, all before Druyun admitted she had favored Boeing.

Marine Corps Lt. Gen. Michael Hough, deputy commandant, worked closely with Druyun for about two and half years when he managed the Joint Strike Fighter program in the late 1990s. He wrote to the court of her "poise, demeanor and uncompromising ethical standards." In 2001, Lockheed Martin beat Boeing to win the Joint Striker Fighter contract, which, at potentially $200 billion, is the largest Defense contract ever awarded.

Hough stands by his comments, noting that the JSF contract did not generate any bid protests. But, he says, "I was stunned along with everyone else who knew her. You were led to believe she was such a Puritan when it came to following the rules. She did do a lot of good, but she's now lying in a bed she made."

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