Wednesday, November 17, 2004

Up the Ladder at Boeing

An earlier posting (Nov. 9) about the expanding government investigation of Boeing may involve the highest levels of the company's management.  In a plea entered on Monday (Nov. 15), Michael Sears, the former CFO of Boeing, plead guilty to aiding and abetting acts affecting the personal financial interest of a federal government employee (18 U.S.C. §§ 208(a) and 216), namely Darleen A. Druyun, the former Principal Deputy Assistant Secretary of the Air Force for Acquisition and Management.  Druyun earlier entered into a plea agreement and on October 1, 2004 was sentenced to 9 months in prison, 7 months in community confinement, and a $5,000 fine.

Sears hired Druyun to work for Boeing in December 2002 after her retirement from the Air Force, although their negotiations took place before she left and while she was heavily involved in decisions regarding significant contracts with Boeing.  At the time, Druyun's daughter also worked for Boeing, and she helped facilitate the contacts between Sears and Druyun.  The government's Statement of Facts asserts: "

The defendant acknowledges that, as discussed above, he knowingly, intentionally and willfully aided and abetted Darleen Druyun’s willful violation of Title 18, United States Code, Section 208 (a) and Section 216 (a)(2) in that he proceeded to negotiate Boeing employment opportunities with Druyun despite her statement to him that she had not disqualified herself  from Boeing matters and that it was improper for her to have such negotiations with defendant when the defendant understood that Druyun was personally and substantially participating in matters in which Boeing had a financial interest.

The Statement of Facts discloses that the hiring of Druyun, who was also negotiating with Boeing rival Lockheed Martin for a job, was discussed at a meeting of Boeing's Strategy Council, which included the company's CEO, Harry C. Stonecipher.  In a statement released on Nov. 15, the company asserted:

We believe the Statement of Facts reinforces what we have said before – that no Boeing executive other than Mr. Sears engaged in any wrongdoing in connection with Ms. Druyun’s hiring. Boeing officials believed that Mr. Sears and Ms. Druyun were fully complying with all appropriate Boeing and DOD procedures in his recruitment efforts.

It will be interesting to see if Sears will provide information that may lead to further investigation of Boeing's top leaders.

http://lawprofessors.typepad.com/whitecollarcrime_blog/2004/11/up_the_ladder_a.html

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