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Boeing Agrees to Pay $615-M in Tentative Settlement with DoJ |
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CHICAGO, May 18, 2006/Satnews Daily/ — Boeing Co. has agreed to pay the U.S. government $615 million to settle two criminal investigations and related civil claims over stolen documents and hiring of a government procurement officer, the Department of Justice (DoJ) has announced.
The deal would put an end to over three years of government investigations into Boeing's recruitment of Darleen Druyun, a former senior Air Force acquisitions official, who served nine months in jail after pleading guilty of giving Boeing preferential treatment in exchange for a job and other favors.
The second investigation concerns possession by Boeing of documents from its rival contractor Lockheed Martin in connection with launch service contracts with the Air Force under the Evolved Expendable Launch Vehicle Program. Some officials believe the documents may have been used by Boeing to win additional contracts from NASA for 19 missions under its launch services contract. Some of Boeing’s contracts were eventually rescinded as a result and awarded to Lockheed at higher cost, according to the DoJ.
Another senior Boeing executive, Michael Sears, was fired and served four months' jail time for his role. Because of the twin scandals, Boeing chairman and CEO Philip M. Condit resigned on Dec. 1, 2003.
The agreement is still tentative and the two sides will still have to iron out the details in the next few weeks. But the DoJ said in a statement the tentative agreement provides that the United States Attorneys' Offices will no longer seek any criminal charges against Boeing relating to the EELV, NASA and Druyun matters.
For its part, Boeing has agreed to accept responsibility for the conduct of its employees in these matters, pay a monetary penalty of $50 million, continue its cooperation with federal investigators, and maintain an effective ethics and compliance program, with particular attention to the hiring of former government officials and the handling of competitor information.
The DoJ, however, said the United States Attorneys' Offices may seek to prosecute Boeing for the Druyun matter, or to assess a further penalty of up to $10 million, if during the two-year term of the settlement agreement, an executive management employee of Boeing commits federal crimes as outlined in the tentative agreement, and the company fails to report the misconduct to the Department of Justice.
Under the proposed agreement, Boeing will pay a total of $615 million. In addition to the $50 million monetary penalty, Boeing will pay $565 million to resolve potential civil claims asserted by the Department's Civil Division. A written agreement will be drafted and is expected to be signed in the next few weeks.
In the meantime, Boeing, through its senior vice president Doug Bain, agreed to the payment of $565 million to resolve potential civil claims and a monetary penalty of $50 million.
“Boeing will accept responsibility for the conduct of its employees and make additional commitments regarding ongoing compliance. No charges will be filed. The agreement is expected to be signed in the next few weeks,” the company said in a statement.
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