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By Jack Minor
A former congressman is warning Barack Obama is playing politics instead of watching over national security by manipulating a military aviation contract to be awarded to an unfriendly nation, while refusing to allow an American company with a track record from competing for the work.
Todd Tiahrt, a former congressman from Kansas who now runs an aerospace and aviation consulting company, says despite Obama’s claims on the campaign trail that he wants to create jobs in America, his actions show the only jobs he is interested in creating are in other countries.
The Air Force put out a request for 20 light attack aircraft to be used in Afghanistan. Hawker-Beechcraft, an American-based company with 80 years of aviation experience, designed the AT-6, a slightly modified version of a T-6 trainer which has been in production since 1999 to meet the Air Force’s needs.
The military previously had purchased more than 725 T-6s, which are used for training.
“There is nothing the USAF doesn’t know about that airframe. Taxpayers have invested in the T-6 program since 1997,” Hawker Beechcraft CEO Bill Boisture said.
The AT-6 also has successfully test fired every weapon in the U.S. and NATO inventory it is capable of carrying. The aircraft achieved another milestone this month when it became the first fixed-wing aircraft to successfully employ laser-guided rockets, he said.
If given the contract, Hawker Beechcraft said it would have created 1,400 American jobs, with a large portion of them going to military veterans. By contrast the only other competitor for the contract, Sierra Nevada Corporation’s proposal, called for the creation of only 50 jobs with the aircraft being built in Brazil.
SNC’s major partner is Embraer, a South-American company controlled by the Brazilian government which produces the A-29 Super Tucano turboprop.
While the American plane outperformed its foreign competitor, the federal government suddenly without explanation told Hawker Beechcraft it would not even be allowed to compete in the process; a move which basically gave the contract to the Brazilian company by default. On Dec. 30, the government announced it had awarded the contract to Embraer and Sierra Nevada.
Beechcraft officials were stunned.
“This is yet another example of the Air Force’s lack of transparency throughout this competition,” Boisture said. “It now seems even clearer that the Air Force intended to award the contract to Embraer from early in this process.”
After multiple attempts to learn the reason for the exclusion were unsuccessful, Hawker Beechcraft filed suit against the government saying the decision was “arbitrary and capricious.”
Rep. Mike Pompeo, R-Kan., said he also was unable to get answers about the exclusion, despite sending four letters and talking to both a senior Air Force official and the secretary of the Air Force.
Following the suit the Air Force issued a briefing document to lawmakers saying they “did not favor one offerer over another and followed strict statutory/administrative guidelines.”
The awarding of the contract appears to have been beneficial to Embraer. The Brazilian company recently reported it was expecting net revenue of $5.8 billion to $6.2 billion this year, up from estimates of $5.6 billion to $5.7 billion from last year.
However, the company may have some legal woes.
Three weeks prior to being awarded the contract, the Securities and Exchange Commission announced it was investigating Embraer for violations of the Foreign Corrupt Practices Act. The act prohibits companies from bribing government officials or similar practices to obtain a contract. If found guilty, the company could be prohibited from being allowed to bid on any other government proposals.
Tiahrt said Brazil also may have violated WTO rules by subsidizing Embraer so it could build the Super Tucano. SNC has denied that Embraer benefits from any government subsidies.
SNC claimed it was awarded the contract because the Tucano had proven combat experience while the AT-6 was only a developmental aircraft. Despite the proposal calling for only 50 jobs to be created the company is now claiming it will employ 1,200 U.S. workers.
However in the claim they do not state that the jobs will actually be created. In a website defending their acquisition of the contract, SNC simply states, “1200 U.S. jobs will be supported through this contract.”
This is similar to language used by Obama when he referred to jobs saved as a result of his stimulus plan.
Tiahrt said the claim American jobs will be created by awarding a military contract to a company with foreign ties is a familiar tune.
“We’ve heard that song and dance before with foreign companies. EADS was awarded a $212 million contract to build a Light Utility Helicopter for the army. After beating out three American companies, they built the helicopters in Germany.”
SNC says the plane will be built in Jacksonville, Fla., but according to Tiahrt that is nothing more than a technicality.
“They will build the plane down in Brazil and then simply fly it up here to have it painted and install a couple of items. That is not the same thing as building the entire plane in America.”
He went on to say it would not make economic sense for Embraer to build a new facility here for only 20 aircraft.
“There is currently a production line building the Super Dacono in Brazil. They submitted a manufacturing plan with the entire plane being built in Brazil and I believe that is exactly what they are going to do,” he said.
Tiahrt also notes that the Tucano’s combat record is nothing to get excited about.
“The only combat the Tucano has seen is in the drug wars in South America which is a little different than combat in Afghanistan,” He said. “The ‘built in America’ and combat experience line is an afterthought that has nothing to do with the decision they made. They made this decision to outsource this and I am not sure what it is but is sounds like geo-politics. It makes no sense when we have American jobs at risk and an economy that needs more energy.”
At a meeting in Brazil last March, Obama indicated he wanted to have closer economic ties with the country. At a meeting of American and Brazilian corporate executives Obama said, “It’s time for the United States to treat our engagement with Brazil on economic issues as seriously as we do with nations like China and India.”
Kansas Congressman Tim Huelskamp, who serves on the House Veterans’ Affairs Committee, issued a statement lambasting the Obama administration’s decision.
“It is simply wrong for the Obama administration to hire a Brazilian company to handle national security when we have a qualified and competent American company that can do the job,” he said.
Tiahrt says while the loss of U.S. jobs should anger Americans there are national security concerns as well.
“Brazil has opposed us in the war on terror and they have never supported us in the U.N. They even went against U.N. sanctions and made an agreement with Iran to process uranium,” he said. “We don’t have a good relationship with them now, even though our president went down there and kissed the ring.”
Tiahrt points out that with the Brazilian government owning a “golden share” in Embraer at any time they can nationalize the company and exercise veto power over any product or part. “This makes us very vulnerable.”
SNC admits the Brazilian government does have the golden share but say it is much ado about nothing. They say that while possession of the share does allow the government to veto activities related to military programs, the government has never exercised this power.
The company says the government has the “right to tell Embraer that it cannot interrupt supplying such parts or service” but insists the government cannot order the company to cease production.