The loss itself was not surprising, but the timing certainly was. Why wait for the stock market to close if, as it is our understanding, an Air Force official may have already leaked the results of the competition two and a half weeks prior.
If you remember back to the brief Boeing and the Air Force at War: The Damage Spreads and the post we did on it. The following paragraph contains the issue at hand:
“The deterioration of Boeing's relationship with its biggest government customer hit a new low last week...But the tone of Boeing's tanker campaign has led at least some service officials to believe the worst about the company, a feeling that is spreading far beyond tankers. For instance, the service has probably delayed announcing award of the GPS III satellite contract in part because it fears another Boeing protest.”
We may tackle the other ridiculous rumors in the full, unabridged paragraph in another post, but today we'll address the last part of the passage about the GPS III satellite contract.
Remember the information for this brief is coming directly from top Air Force leakers or “service officials” as they are referred to in the penultimate sentence. These officials supposedly “believe the worst about” Boeing and the example given of these suspicions is that the GPS III satellite contract announcement was being delayed because Boeing would protest the loss.
The author tries to muddy the source by using the word “probably” as a qualifier, but one can reasonably ascertain that this information is a direct "instance" of suspicion provided by the “service officials” referred to previously.
This was not the first time we have seen an official leak information to spin the information on the tanker contract. As our inaugural post pointed out, contrary to Assistant Secretary of the Air Force for Acquisition Sue Payton’s public statements during the tanker award announcement that “We owe it to Boeing to give them the first debrief,” Air Force personnel briefed at least one outside defense expert and sought to brief members of congress while trying to delay debriefing Boeing for two weeks.
These actions were taken to seed the story that Boeing had lost decisively and to make public and congressional opinion go against a possible Boeing protest. This shameful tactic did work in the media and continues to generate numerous stories that Boeing lost decisively as see here, here, and here.
Who are these “service officials” that have willfully chosen to spin and spread rumors? Well since the other side is paying the “probably” game we will right play along.
A number of people on the Hill tell us that they very strongly believe a main source for these leaks, and the person who undermined Ms. Payton’s credibility, is “probably” Kenneth E. Miller.
That’s right; the Special Assistant for Acquisition Governance and Transparency to the Secretary of the Air Force is who our sources say is “probably” leaking information to spin the tanker controversy against Boeing in a very un-transparent way.
Is it illegal to leak, spin, or provide misleading information; maybe, maybe not depending on the leaked information. (Just ask poor Scooter Libby) But, if someone did selectively leak the result of a billion dollar contract award early, the risk of malfeasance, such as insider trading, certainly does exist.
DoD is very aware of the effect a big contract can have on the markets, which is why they announced the GPS III contract after the markets closed. Too bad in this case, Mr. Miller may have already let the cat out of the bag.
If our numerous sources are all wrong or Mr. Miller feels he has been unfairly accused on leaking information on the tanker contract, we would ask that he e-mail us a written rebuttal using his Pentagon account, and that he request an appearance at a special congressional hearing where he can deny these suspicions under oath. We would like specific denials of being a source, if not the sole source, of these leaks mentioned in these: Tanker Competition: Northrop Won By A Wide Margin, Boeing, Northrop CEOs Met With Air Force, and Boeing and the Air Force: The Damage Spreads. (We are most interested in these three instances, but if there are some we missed please feel free to make note of them in your statement so that they can be covered in cross-examination.)
Note: Tanker War Blog is releasing this information while the market is open, as it is our hope by doing so we can raise tanker integrity and transparency futures.