Newswire:

Anatomy Of A $50 Million Scandal

A $50 million scandal at the Air Force scandal provides a fascinating window into the twisted world of cronyism, back-room contracts and dirty dealings. [Washington Post]

A new, 251-page Inspector General’s report from the Department of Defense will be out either later this week or early next week. The Washington Post got its hands on a copy.

In November 2005, Air Force Maj. Gen. Stephen Goldfein used his influence to award a $50 million contract to a company named Strategic Message Solutions (or SMS) for a fancy Jumbotron to keep audiences entertained during Thunderbirds air shows.

• Problem: The $50 million price was more than twice as much as other companies would have charged to do the work.

• Problem: SMS “barely existed.” The brand-new company was created by a millionaire civilian pilot (who was friends with the Thunderbirds) specifically to get this contract. His “silent partner” was a recently retired four-star general who was a close friend of the Air Force vice chief of staff.

• Problem: Goldfein met with the contract selection team — he outranked all of them, by the way — and told them he wanted them to pick SMS. According to one member of the team, it was “the dirtiest thing” he’d ever experienced.

• Problem: Goldfein got President Bush to tape a testimonial in the White House Map Room for the barely-there company to vouch for its credibility.

From the IG Report: “The investigation found that the December 2005 award to SMS was tainted with improper influence, irregular procurement practices, and preferential treatment…Lower priced offers from qualified vendors and capabilities in-house were bypassed in an apparent effort to obtain services from [redacted], president of SMS, who had a longstanding relationship with senior Air Force officers and members of the Thunderbirds.”

When another company complained, the Air Force took the contract away from SMS, but not before paying them $1.9 million for work completed.

Yeah, we were wondering why audiences needed entertainment during an air show, too. Turns out the jumbotron was for when the planes were turning around, getting ready for their next stunts.

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