Hearing of the Senate Armed Services Committee
October 6, 2004 Wednesday
HEADLINE: HEARING OF THE SENATE ARMED SERVICES COMMITTEE
SUBJECT: THE NOMINATION OF FRANCIS HARVEY TO BE SECRETARY OF THE ARMY; RICHARD GRECO JR. TO BE ASSISTANT SECRETARY OF THE NAVY FOR FINANCIAL MANAGEMENT; AND GENERAL GREGORY MARTIN, USAF, TO BE COMMANDER OF U.S. PACIFIC COMMAND
CHAIRED BY: SENATOR JOHN WARNER (R-VA)
WITNESSES: RICHARD GRECO JR.; FRANCIS HARVEY; GENERAL GREGORY MARTIN
LOCATION: 222 RUSSELL SENATE OFFICE BUILDING, WASHINGTON, D.C.
SEN. JOHN MCCAIN (R-AZ): Mr. Chairman, I think we have a situation here regarding General Martin that I'd like to briefly review.
And first of all, I'd like to reveal the extent to which the Air Force has assisted us in this committee and me as chairman of the Commerce Committee in discharging its oversights, responsibilities in the tanker lease investigation. In response to repeated requests by Congress for tanker-related records, the Air Force stonewalled for months. Ultimately it decided to cooperate only in response to the threat of subpoenas and a continuing hold on all DOD civilian nominations, and my negotiations with the White House counsel, Judge Gonzales.
After the Air Force produced a modest amount of documents, a handful of nominations were released as a measure of good faith. In response the DOD shut off the spigot, producing no documents through the entire summer recess period. In response to a request by Senate Armed Services Committee staff for tanker-related records, the Air Force produced them only after doctoring in a manner most favorable to the Air Force position on tankers. A key e-mail between Secretary Roach and a senior OMB staff that was otherwise responsive to our request was improperly withheld because it was deemed to be a joke. That joke, in their view, has now been sent over to the Justice Department.
And most recently, after the Air Force jammed us up to fit in your nomination-General Martin's nominating hearing-we got word from the DOD inspector-general last night-and I'd like to quote from it, Mr. Chairman. This is the letter that was sent to you yesterday. It says, quote-from the Department of Defense inspector general: We received this afternoon a CD with additional e-mails of General Martin, which the Air Force had considered, quote, "non- responsive," and had not originally provided to us. We're expecting the Air Force to provide another CD with additional e-mails tomorrow-meaning today. The CD we received today has approximately 90 e- mails which we are reviewing and sorting in accordance with Secretary Rumsfeld-a letter to you that we will provide these documents to the committee tomorrow.
In addition, we are currently assessing the process used to search for documents sent to and from General Martin relating to acquiring a commercially derivative aerial refueling tanker. We conducted interviews with staff involved in retrieving the documents on October 4th and 5th, 2004. We were told on August 23rd, 2004, the local hard drive of General Martin's computer was searched for e-mails and electronic documents containing one of seven keywords related to the KC-767 tanker program.
The search procedures followed guidelines established and distributed by the Air Force administrative assistant. However, upon conducting the review, there was no attempt to retrieve any previously deleted items. As such, only items that existed on the hard drive on that date were searched, identified and submitted. In addition, we could not ascertain whether classified system in General Martin's personal files were also reviewed for responsive e-mails and electronic hard-copy documents. Our review of the sufficiency of the procedures used to conduct this search is still ongoing.
Mr. Chairman, what this means is we haven't received-and we tried to get as a priority-General Martin's e-mails because of the urgency of this nomination. We haven't gotten it. Obviously there is something going on (unquote ?) about non-responsive e-mails. Now, if this has any relation to previous non-responsive e-mails, which had to be sent over to the Justice Department, then we have a serious issue that needs to be resolved before, I believe, this committee could move forward with General Martin's nomination, much less-much less to the floor-consideration on the floor of the Senate.
And Mr. Chairman, I try to not get too emotional about this situation, but it is-in my 22 years in Congress, it's the most frustrating thing that I've ever seen.
Now you got to also put this in the context of a guilty plea by a former employee of the United States Air Force, who said in her guilty plea that not only did she act improperly and illegally on the Boeing tanker deal, but on four other-four other contracts as a, quote, "going-away gift" for Boeing.
Now, the question then it leads us-and the reason why I believe we're going to have to do hearings-how could she do all this by herself? How could one civilian employee be responsible for ripping off the American taxpayer by perhaps billions? It would have been $5.7 billion if we had let the tanker deal go through. So this is larger than Ms. Druyun, it's larger than General Martin, and it is an absolute obligation of this committee to get behind-to get to the bottom of what apparently, at least in Ms. Druyun's guilty plea, was the rigging of contracts to the detriment of the taxpayer and to the financial benefit enormously of the Boeing Corporation. So this is really a very serious situation.
And I think we have to find out, how did this happen? How did one person-aren't there procedures in the United States Air Force that would somehow have this kind of procedure not be possible? Instead, we have to have a guilty plea by a former employee in federal court to bring to the attention that at least four other contracts were improperly consummated in order to have a, quote, "going-away present," in her words, for Boeing Aircraft Company.
So Mr. Chairman, I hope that we can get the remaining e-mails. I'm not-actually I don't know if we ever will or not, because the Air Force has been incredible in their unresponsiveness, but General Martin was involved in this, I've already seen e-mails of his involvement of it, and we have a lot of questions for him as well as other members of the United States Air Force.
I thank you, Mr. Chairman.
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SEN. MCCAIN: Well, you must have been deceived, General Martin.
GEN. MARTIN: Actually, Senator McCain, I can't speak to where those last contract awards came and when she started them, but a going-away gift occurred after I had left. I left in December of '99. Now at that point-I must tell you, I'm not an expert in contracting-I saw nothing that she was doing that was inappropriate or in any way illegal. If I had, I would have raised the flag --
SEN. MCCAIN: We'll have time for the-questions, Mr. Chairman.
But I'm looking at e-mails that you wrote in 2003, General.
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SEN. MCCAIN: Senator Inhofe.
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SEN. MCCAIN: Senator Pryor.
SEN. MARK PRYOR (D-AR): I don't have any questions right now, thank you.
SEN. MCCAIN: General, Ms. Druyun testified as part of her plea bargain that not just the effort on the Boeing tankers, but also NATO AWACS, the C-130J-which, by the way, the DOD inspector general has already ascertained we may have wasted a couple of billion dollars on those. We will be having a hearing on that-and the C-17 were, quote, "parting gifts to ingratiate ourself to our future employers," and later about ensure employment for her daughter and son-in-law. This is four major contracts. How is it, General Martin, that this could happen? Isn't there a-is-how is it possible that one person can wreak this kind of havoc in the case of the tankers, who had been $5.7 billion additional, according to GAO and CRS and other experts, $2 billion have been wasted on the C-130J. We're talking about billions of dollars here. How does that happen, General?
GEN. MARTIN: Senator McCain, I will tell you, when she made her plea bargain, not only was I disappointed, but I was very surprised, first.
Second, I think we have to realize that Ms. Druyun, as I mentioned, had been in that position since 1992.
SEN. MCCAIN: So there's no process that would-a check or a balance, that she was able to orchestrate four major contracts so to ingratiate herself to Boeing.
GEN. MARTIN: Sir, as we went through the '90s-and you may recall, not only did we go through a very serious restructuring of our forces and drawdown, but we also went through a major acquisition reform that took much of the oversight, took much of the checks and balances out. We became very, very closely aligned with the partners. We went into total system program management --
SEN. MCCAIN: There's something wrong?
GEN. MARTIN: We may have gone too far in the pendulum.
SEN. MCCAIN: May have? With this kind of-with this kind of scandal, we MAY HAVE, General?
GEN. MARTIN: Senator McCain, I have not been in the business, I have not reviewed all of the complaints --
SEN. MCCAIN: Well, you're in the business of the-you're in the business of the tankers. I'll quote you some of your emails here.
GEN. MARTIN: All right, sir.
SEN. MCCAIN: Are you aware of the Center for Naval Analysis finding, quote, "Trends in C-135 readiness and maintenance research requirements are reasonable steady in that corrosion has not been a major contributor"? Are you aware of the CRS report, October 23rd, 2003, stating that corrosion is not a problem? Are you aware of the Defense Science Board report, "The task force did find evidence on a maintenance regime well poised to deal with corrosion and other aging problems"? Are you aware of all of these studies?
GEN. MARTIN: I'm aware of two of those; I'm not aware of the second one you mentioned, sir.
SEN. MCCAIN: All of them said that corrosion was not a problem, right? All of those subjective --
GEN. MARTIN: That's-Mr. Senator, in one context that's correct. I would also call your attention to the Defense Science Board report that said 61 KC-135Es that the United States Air Force planned to retire was a good decision that they concurred with.
SEN. MCCAIN: Actually, we can argue about that. But there was a number of them that said that corrosion was not a problem.
GEN. MARTIN: Sir, we had 176 tankers in backlog four and a half years ago, most of them, fatigue, obsolescence and corrosion. And corrosion is only one of --
SEN. MCCAIN: And those-and those have all been-and all of those rates have been dramatically improved, according to these studies.
GEN. MARTIN: Yes, sir. We have to hire on two contractors to make that work out. They have worked overtime.
They brought the fleet back up to a 65 to 75 percent in-commission rate, but at what price? We are re-manufacturing many of the tankers because of fatigue, obsolescence and corrosion. Corrosion is just one of the terms that we've used.
SEN. MCCAIN: Well, you gave a speech on 12 February 2004, but it does not say for whatever it takes. "Forty-, 50-year-old tankers need to move on. The oldest of these haven't been modified in R configuration. So-and these are in the saddest shape, and we see that when they come into depot, with respect to corrosion and all of that. So it's time for us to understand that 40-, 50-year-old aircraft"-that's in direct contradiction to the Defense Science Board, the Center for Naval Analysis and every other objective study.
Now you may say that it isn't, but they say that it's not a problem, that corrosion was a manageable;e problem. That's what objective observers say. And if you want to say black is white, sir, you can. But I will quote, again, "The task force did find evidence of a maintenance regime well poised to deal with corrosion and other aging problems." That's the bottom line, General, while you are alleging otherwise.
I'll be glad to hear your response.
GEN. MARTIN: Mr. Senator, those comments were made at the Air Force Association before Mr. Wynn (sp) asked the analysis of alternatives to review the potential of re-manufacturing and re- engining the KC-135Es. On that day, I was talking about the KC-135Es. At that time, we had about 138. They had not been modified to the KC- 135R configuration. They had not put-been modified with new engines and the other 25 modifications, to include avionics, wiring, other stiffeners and stress point repairs. So those aircraft-yes, they could be brought in, re-manufactured, re-engined and have some use to them, but they would still be 44- to 45=year-old aircraft.
SEN. MCCAIN: "The task force did find evidence of a maintenance regime well poised to deal with corrosion and other aging problems" --
GEN. MARTIN: With corrosion, sir.
SEN. MCCAIN: -- and they all said we're in hand to deal with known-solutions are in hand to deal with the known problems with the fleet, including the KC-135E engine strut. So you have a different view, sir, than the Center for Naval Analysis, the Defense Science Board and every other objective-let me get into one of your e-mails here. This is why I'm concerned about the, quote, "irrevelant" (sic) e-mails that just came to light.
"From: General Andy (sp). To: General Martin. Subject"-this is June 24th, 2004 -- June 24th, 2004. "Hot: McCain's statement on the tanker amendment, S. 2400. Speedy, have you had a chance to read this information? Certainly we need to link our staffs once again with the tanker team to come back with our bottom line on corrosion and cost, plus any other engineering data you might have in your hip pocket. I'm sure that we will both get calls for action. Thought: BTW, please protect my source."
Your reply, General Martin:
"Subject: Hot McCain statement. John, I had not seen this yet. I will get our guys to work with yours. In the meantime, I just signed a memo with point paper to you on the 30 tankers that need to have work done before 1 October 2004. I will ask the guys to fax you a copy if you haven't seen it yet. This will be fun. Speedy."
What was fun?
GEN. MARTIN: A casual comment to a colleague about a situation that was clearly becoming what I would consider to be controversial. "This will be fun," meaning nothing more than "it looks like we've got some work ahead of us." That's what I meant.
SEN. MCCAIN: Well, General --
GEN. MARTIN: Now if-Senator McCain, if you look at my comments, is there anything in my comments there that indicate that I'm stonewalling or in any way supporting a position that is inappropriate?
I'll look into it. I'll --
SEN. MCCAIN: It's inappropriate when the bottom line on corrosion and costs when there have been numerous studies that say that corrosion is not a problem, General.
GEN. MARTIN: Sir, in this particular case that was a corrosion issue. Those were the engine struts holding the engines onto the wing. The analysis that had been done in December of '02 said that those aircraft needed to be repaired or grounded by 30 September. Those --
SEN. MCCAIN: The tanker amendment did not address the strut issue, General Martin. The tanker amendment was about a requirement for an analysis of alternatives and other requirements before we went through with this massive rip-off of the taxpayers.
GEN. MARTIN: But, sir, the point was-is that the analysis by the engineers was that those aircraft should not fly if they did not have strut modifications, as all of the other aircraft had. General Handy and the Air Force Mobility Command of the United States Air Force decided, rather than to modify those aircraft two years ago, to retire them. Now the retirement date is coming up, but we've been prohibited from retiring due to congressional language. So we either have to fix the struts or they are grounded. Our position was --
SEN. MCCAIN: You could have fixed them for-you could have fixed them for $400,000 each. I think we all know that.
GEN. MARTIN: Yes, sir. That's correct. However, sir, that would also then mean they would go into the Program Depot Maintenance and the other modifications that were necessary to allow them to fly in the airspace as we know it. Overall, nearly a billion and a half dollars would be spent to keep those airplanes flying when the command decided that they were no longer necessary to be flying.
SEN. MCCAIN: As opposed to a 20-some billion-dollar acquisition.
Well, General, we'll look forward to receiving the e-mails that you haven't given us. We will look forward to finding out why it's fun to talk about corrosion when there have been numerous studies that clearly state that is it not a problem. We'll try to find out, as this committee, how in the world one individual can be responsible for four major contracts-four major contracts-in the United States Air Force, of billions of dollars; can get away with such a thing that there's something very, very badly wrong. And I'll tell you one of the-one of the things we've found out: It's the military- industrial complex, General Martin. We found out that from the Boeing e-mails and the incredible incestuous relationship between Boeing and the United States Air Force, both civilian and military. And I will not-I will strongly object to your nomination leaving this committee until we get all the e-mails and all the answers, of which I have very many.
This is a national disgrace. If it hadn't have been for my chairmanship of the Commerce Committee and the ability to get the Boeing e-mails as chairman of the Commerce Committee, we would have ripped off the taxpayers of $5.7 billion-not according to me, but according to the General Administrative Office and the Congressional Research Service and others. This is-and we need to fix a system-we very badly need to fix a system where one individual is able to corrupt four major, major defense contracts all by-all by herself. That's hard for me to believe.
GEN. MARTIN: Mr. Senator, I would only ask that I-given the facts that you have, I would not disagree. However, I think you have to consider the source of those comments and we have to look at the details of what she said and what she actually did. The people --
SEN. MCCAIN: Are you saying she didn't?
GEN. MARTIN: I don't know.
SEN. MCCAIN: She confessed to doing so, General!
GEN. MARTIN: All right, sir. I don't understand how she made those comments and whether those are honest comments or not. I have no knowledge either way, but I'm here to tell you that in my dealings with her I saw nothing inappropriate.
SEN. MCCAIN: General, I'm questioning your qualifications for command. A person pleads guilty in federal court to a crime that's going to send them to jail and you question whether she was telling the truth?
GEN. MARTIN: Yes, sir.
SEN. MCCAIN: Senator Sessions.