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Project On Government Oversight

FOR IMMEDIATE RELEASE
JULY 25, 2006
11:50 AM

CONTACT: Project On Government Oversight
Jennifer Gore
jgore@pogo.org
Beth Daley, 202.347.1122
beth@pogo.org

 
Financial Conflicts of Interest Plague Institute for Defense Analyses F-22A Report
POGO Testifies to Senate: Withdraw Multiyear Procurement Program
 

WASHINGTON - July 25 - A report released today finds that financial conflicts of interest call a federal research institute's independence into question regarding a study it completed on the F-22A. The study was used in recent weeks by Senators to justify approval for a contract that locks the government into buying 60 additional F-22As. The Project On Government Oversight which authored the study is testifying this morning on its findings before the Senate Armed Services Airland Committee.

POGO's investigation found that Institute for Defense Analyses President Admiral Dennis C. Blair, USN (Ret.), is on the Board of Directors of EDO Corporation, an F-22A subcontractor which manufactures essential suspension and release equipment for the aircraft. A copy of POGO's report, "Preying on the Taxpayer: The F-22A Raptor," can be viewed here: http://www.pogo.org/p/defense/do-060701-f22a.html

This morning, the Washington Post reported: "In an interview, Blair said he was heavily involved in the preparation of the report endorsing the multi-year procurement as the chairman of an internal review committee that approved its final form." (See http://www.washingtonpost.com/wp-dyn/content/article/2006/07/24/AR2006072401232.html)

As of July 5, 2006, Blair owned 1,787 shares of stock and 30,000 stock options in the company. As a result, Blair himself stood to financially profit from a favorable MYP decision for the F-22A.

In testimony today, POGO calls on Congress to reverse its headlong dive into authorizing multiyear procurement (MYP) of the F-22A because of many problems with the troubled aircraft. POGO's testimony can be read here: http://www.pogo.org/p/defense/dt-060701-f22a.html

"Unfortunately, IDA falls into an oversight neutral zone since it is legally treated as a government contractor," said POGO Executive Director Danielle Brian. "So, IDA gets to enjoy the credibility of being a government entity without having live by the same conflict-of-interest laws most government employees willingly do.

In June, the Senate authorized the Pentagon to purchase 20 F-22A Raptor fighter jets each year for 2008, 2009, and 2010-without having to come to Congress each year for funding. Lockheed Martin, which builds the F-22A, lobbied extensively to secure the multiyear funding, which would likely cost $1 billion more than an annual funding scheme.

Congress asked the Congressional Research Service (CRS), Government Accountability Office (GAO), Congressional Budget Office (CBO), and Institute for Defense Analyses (IDA) to determine whether or not the F-22A program had met the six legal requirements for the multiyear funding. All but IDA, a federally funded non-profit institute that conducts research for the federal government, found that the program has too much instability to be funded for more than one year at a time. POGO also obtained documents from February 2006 that show even the Air Force questioning questioned if the aircraft would meet all MYP requirements.

IDA's report asserts the government would save about 2.5 percent-approximately $225 million to $235 million-by using multiyear funding instead of annual funding. However, IDA did not determine if the F-22A met the other requirements for an MYP.

"The government looks to institutions like IDA to provide unbiased advise on spending taxpayer dollars but in the end the government probably is not getting the independent analysis it is paying for," added Brian.

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