F-35 Jets: Auditor General found no-one acting responsibly

It has been nearly two years since my first column in Island Tides on the purchase of the F-35 fighter jets. It appeared just after the July 2010 announcement from Defence Minister Peter MacKay that Canada was committed to the purchase of 65 Lockheed Martin F-35 jets at an estimated cost of $16 billion. My main argument in that article was that Canada had been playing to the Pentagon table, with a larger number of partner nations, all seeking a piece of the action. In many ways the F-35 fighter jet is an object lesson from former US President and former General Dwight Eisenhower’s warning to beware of the ‘military-industrial complex.’ Canada’s rationale for joining the process in 1997 had little, if anything, to do with domestic security and everything to do with hoped for aerospace contracts.

Under Liberal Prime Ministers Chretien and Martin, Canada put up initial funds to participate–first $10 million in 1997, then a further $150 million in 2001. The 2012 Spring Report of the Auditor General of Canada finds no fault with the process and accountability of decision-making up to this time.

It should be noted that it is beyond the scope of the Auditor General’s report to investigate whether Canada needed the F-35s at all. Just as it was not part of the Auditor General’s mandate to find out which political masters were aware of the various and repeated acts of incompetence and failures of due diligence that he went on to report.

What the Auditor General (AG) did recount was such a trail of violations in the fundamentals of normal procurement process that even seasoned Ottawa-watchers are stunned. The decisions were generally taken in reverse order. First came the decision, followed by inventing criteria to justify the decisions, and then, lastly the rationale. Not one, but two, departments were found to have failed in the exercise of basic due diligence.

Both the Department of National Defence (DND) and the Department of Public Works and Government Services Canada (Public Works) were found to have fallen below the standard of due diligence. It is clear that Public Works tried.

Prior to the announcement of the F-35 purchase, Public Works repeatedly asked DND to identify ‘operational requirements’ of the fighter jets and to ‘provide a full justification’ for its choice. In May 2010, Public Works ‘questioned National defence’s assertion that no other aircraft met its mandatory requirements.’ (p. 23 of Ch. 2, AGReport).

The AG’s report is dry in its delivery, but reading between the lines, there is high drama lurking. Essentially, Public Works said ‘no deal’ without justification and background analysis.

Mysteriously, on June 1, 2010, Public Works offered an olive branch: it would okay the purchase so long as DND ‘provided a letter confirming National Defence’s requirement for a fifth generation fighter and confirming that the F- 35 is the only such aircraft available.’

The AG report continues, ‘The same day, National Defence provided such a letter. There were no other supporting documents… It is important to note that the term ‘fifth generation’ is not a description of an operational requirement’ (emphasis mine).

Additionally, the AG tells us that the touted industrial benefits were as illusory as the real price. The AG recounts that ‘prior to the signing of the various MOUs in 2002 and 2006, the ministers of Industry Canada and National Defence…were informed that industrial benefits could not be guaranteed in the JSF programme’ (p. 15). That was because, by the terms of all contracts between the Pentagon and the partner countries ‘partners cannot require prime contractors to provide work to companies in their countries.’ Later in the report, the AGnotes that (as if we could be surprised at this point) ‘in the majority of cases, only the most optimistic scenario was put forward’ related to potential benefits.

Meanwhile, the 2006 memorandum of understanding (MOU) took the project to a next phase beyond the research and project development among partners, moving it more irrevocably in the direction of buying the F-35s. For example, it was that document that made it clear that, even though Canada was a partner in the development of the Lockheed Martin F-35, no contracts to Canadian aerospace industries would be awarded unless Canada also purchased the planes. Amazingly, the AG found that Public Works never saw the 2006 MOU until December 2009.

Since the report came out, the Prime Minister has claimed that this was all normal. No money has been spent yet, he says, although $330 million is certainly serious money and it has been spent. Peter MacKay and junior Defence Minister Julian Fantino have back-tracked and tried to claim they never said that contracts had been signed for the 65 F-35s, although there are numerous public references to the contract, including Peter MacKay referring to the wording of the ‘$9 billion contract’ in answer to Ignatieff in Question Period.

The essence of the AG report is not, as MacKay now claims, that the AG found a novel way to add up the costs of the jets. The essence of the report is that Canadians were lied to for years. Parliament was misled. And the whole F-35 project, from 2006 onwards, was typified by a litany of rogue decision-making.

What we need to know is how it happened that two departments suspended judgement, cut corners, and violated process. One theory is that Public Works and DND were independently willing to abandon normal procurement rules. More likely, the orders came from the one in control of all departments: the Prime Minister who wants to remake Canada as a warrior nation.