Just over two years ago, on August 1st, 2006, Jim McNerney, CEO of Boeing, testified before the Senate Armed Services Committee (SASC) concerning the Boeing Global Settlement Agreement between the Justice Department and Boeing that settled the Boeing Tanker scandal and the Boeing theft and use of competition sensitive EELV bid data from Lockheed Martin (to rig their bid and win the EELV competition), for a relative pittance compared to what the DOJ career attorneys had wanted before they were overruled by Boeing friendly higher-ups at the DOJ.
Although he was obligated to tell the truth before the committee, he did not--especially at the point in the hearing in which he answered a question posed by John Warner, Chairman of the SASC at the time, concerning the existence of protections for whistleblowers at Boeing.
McNerney then lied a string of lies that any whistleblower at Boeing (or most likely, a whistleblower fired from Boeing like me, as whistleblowers are an endangered species and fair game until extinct at Boeing as soon as they out themselves as such to Boeing management) would be astounded that he would dare lie.
(Incidentally, Paul McNulty, the Deputy Attorney General who testified for the agreement just before McNerney testified that day, later resigned in disgrace from his job after being caught perjuring himself during testimony on the U.S. Attorney firing scandal before another committee of Congress. McNerney, however, is still Boeing CEO after arrogantly misleading Congress during the August 1st, 2006, SASC GSA hearing regarding the state of Boeing ethics programs and treatment of whistleblowers.)
The noted part of the hearing dealing with whistleblowers at Boeing is the only part of the hearing in my letter sent to every member of the SASC committee before the hearing that appears to have been read by any member of the committee at all, in the form of Senator Warner's question to McNerney. You can read my letters to the SASC concerning the GSA at this link.
Bonnie Soodik, at the time the head of the Boeing "Office of Internal Governance" (which, to whistleblowers like me, is an office akin to what the Gestapo was to anyone who opposed the Nazis) was also at the hearing.
But Doug Bain, former Chief Counsel of Boeing who personally saw to it I was retaliated against for my whistleblowing as one of his last acts at Boeing along with settling the GSA with the DOJ, wasn't there, though his replacement was. What should have been a lambasting of Boeing, however, turned out to be just a back slapping meeting all around. That is, when Boeing wasn't lying about its ethics program and whistleblower "protections."
View the below video of just one part of McNerney’s factually challenged testimony on that day before Congress and read my comments denoting the “factual errors” within it just after it:
Here is a link to the entire better quality C-Span video.
Now that you have watched the video, I’ll point out where most of the mistruths are in Mr. McNerney’s portion of testimony to Congress in the video (my comments about the testimony are in parenthesis within it below) As you can see, they are numerous, indeed:
SENATE ARMED SERVICES COMMITTEE CHAIRMAN WARNER:
I listened carefully, and it may well be that you covered this, but I'd like to focus on it.
We have learned through experience in our federal government problems (happen?) and we have instituted a whistleblower -- actually, it's a federal statute. And carefully in there is protection for any retaliation or reprisal.
I didn't hear as crisply as I'd like to what you have as a component of this overall and very impressive program you laid out (of) that tried and, I think, tested concept.
(Senator John Warner, who was chairman of the SASC at the time of this hearing, having to give up the chairmanship some four months later due to the Democrat’s winning control of the Senate in the 2006 elections, is one of the best Republicans in Congress. He possesses a code of honor and integrity many Republican lawmakers lost long ago due to the fact they let power corrupt them, and corrupt them nearly absolutely. But even a Republican with the stature of Warner has problems, as shown in this hearing.
Republicans, by the very platform they all rule by, share one “pair of pants” with business—especially powerful corporations like Boeing. So, they are limited in what they can say or do against even knowingly corrupt corporations, since being “Siamese twins” with them, they will kill themselves and their ideals of government by, for, and of business if they are too harsh with industry and investigate corrupt corporations such as Boeing in an unbiased manner and let the chips fall where they may.
Even Senator Warner however participates in the worst partisanship in the Senate most of the time with his votes and in preventing bills from coming to a vote of the senate by supporting his Republican leadership’s many filibusters of bills in misguided support of business concerns (real or imagined) over the common good (what is good for business and workers).
John McCain (one of the few SASC members to even show up for this hearing) deserved much credit at one time for being an exception to this rule in the case of his investigation into Boeing and Air Force misconduct. Sadly, it was a just a relatively small “maverick” phase in his Senate career and he was not consistent in it.
Even though he asked some of the tougher questions during this hearing, he participated in the back slapping all around as well, and was not as tough by far as he should have been. Sadly, McCain had to suck up again to the corrupt “I’ll scratch your back if you’ll scratch mine” ethos between the Republican party and the worst and most arrogant in industry in order to win the nomination and get the resources with which to run his campaign for president.
Tellingly, he made an “error” in his first debate with Obama when mentioning the 6.9 billion dollars he saved the taxpayers by killing the first tanker deal by mentioning Boeing by name during his boast about it. However, he did not make the same “mistake” during the second and third debates when making the same statement—he made a point not to mention Boeing in relation to the nameless tanker contract he said he killed thereby “saving” taxpayers 6.9 billion dollars during those last two debates. He apparently made a decision that to do so would hurt his electoral chances. But I digress.
I hope even you Republicans out there can appreciate why someone as anti-corporate corruption as I am does not favor Republicans in their present form.
But unfortunately, the Democrats have not been as good as they should have been by far in standing up against corporate corruption, but as a majority of Americans have finally decided (quoting a famous movie line), they are now “our only hope” in arresting corporate fraud and the havoc it has wreaked across our economy.
Senator Warner’s “this overall and very impressive program” comment during his question and other comments during even the tougher portion of his questioning belie his bias toward even corporations still as ethically challenged as Boeing, even at their lowest points, at which Boeing was during this hearing.)
MCNERNEY: We try to make as broad a set of provisions and mechanics available to our people, who want to bring forward problems that they've identified in the company.
Just as background, we get 12,000 inquiries a year into our ethics hotline, so to speak, which can be reached either via the telephone or via the Web. Most of these are inquiries about issues, how to do the right thing, information to help them do their jobs better. Some are serious matters.
(And there lies the rub and one of the huge and fatal flaws of the “Boeing Ethics Hotline” program Mr. McNerney is describing, trying (and succeeding) to dodge Senator Warner’s real question: Boeing decides themselves what is a “serious matter.” And, as you might guess, what Boeing decides is a “serious matter” and therefore acts in some half or no hearted way to stop is a very small subset of the true number of “serious matters” reported to it through this system. I should know. When a company decides that inspectors rollerstamping mandatory inspections off on inspections of safety critical products like commercial and military airplanes is not a “serious matter,” then you can see the integrity the “Boeing Ethics” system really has, or, more accurately, does not have.)
WARNER: And that 12,000 is internal, or…?
WARNER: Internal to the company?
(The reason Senator Warner seems surprised by McNerney’s answer to his question is that Senator Warner wasn’t asking about internal whistlblowers, quite obviously.
In the common usage of the term, “whistleblower” is almost always someone who has gone outside the company or government agency they work for once all internal efforts to get the company or agency to do the right thing have failed.
“Whistleblower” is not a term that characterizes people who do the right thing in a company and bring problems to their management’s attention who then fixes those problems. They are not “whistleblowers.” They are just good employees.
When they actually become a true whistleblower is when they bring problems or corruption to the attention of management and that management decides not to correct the problem, as they are fine with the problem or corruption continuing, and in many cases, are the root cause of the corruption themselves. Then they go outside the company to the relevant enforcement agency, law enforcement organization, and/or the press if government agencies are also compromised. That is what happened to me and many other real whistleblowers.
Mr. McNerney simply totally dodges the question by talking about internal controls Boeing implemented as part of the façade of reaction to being caught in the EELV and Tanker scandals with their “hand in the cookie jar.” Unfortunately Senator Warner does not dare to correct Mr. McNerney’s intentional dodge of the question or ask about what he was truly asking about at the end of McNerney’s “answer”—controls Boeing has or does not have in place for actual whistleblowers.)
MCNERNEY: This is Boeing people often asking questions, trying to figure out how to do the right thing.
WARNER: And that's been in place how long?
MCNERNEY: That's been in place since two years, I believe. At least since '03.
But the point is that some of these are serious matters, occasionally anonymous. And one of the mechanisms we have that directly bears on your question, Mr. Chairman, is we have a tracking system that we implement after someone comes forward. And they're often concerned about some kind of retaliation or intimidation post the disclosure. And we've got an actual tracking system where we work with people, regularly check in with them, and ask them in their view, are they experiencing any kind of retaliation?
And we track for a long time.
(This is the biggest lie in this portion of Mr. McNerney’s testimony. I have more experience than most with Boeing’s internal and external “tracking system” of retaliation against people that use the “ethics hotline” and whistleblowers like me who reported Boeing corruption to the relevant governmental oversight agency, and in my experience, no such tracking system existed at the time of Mr. McNerney’s statement, and I was an employee of Boeing for all but just over two months before Mr. McNerney made this ludicrous statement.
There is, however, a “tracking system” of sorts in place, although it is antithetical to the one Mr. McNerney describes. Most “callers” to the ethics hotline and actual whistleblowers of Boeing misconduct to government agencies are tracked with a tracking system, however that tracking system is much like the automated tracking system on an anti-aircraft or anti-missile gun, its sole purpose to dish out retaliation to those who report misconduct (especially management misconduct) to Boeing’s “ethics hotline,” or dare to become real whistleblowers and go outside the corrupt company in search of real action to stem the fraud they witnessed within the company.
Take my case for example. I was promised no retaliation against me by the Chief Counsel of Boeing, Doug Bain, after I had gone to the FAA and his office to stop the rampant fraud I witnessed in Boeing Quality Assurance Management. Did that mean I was not retaliated against? No. When I was retaliated against, did Boeing’s Chief Counsel stop it when I reported it? Also no. He just showed up at my workplace to ensure such retaliation was “on track.” And all of this was prior to my later contacts with reporters to go public with the story of Boeing Quality Assurance Management fraud that Boeing ostensibly fired me for and ensured could continue and increase.
My two contacts with the ethics department of Boeing were actually because of retaliation by Boeing management at my workplace against me for my whistleblowing and for my trying to do my job of inspection with some minimal level of integrity against management’s intimidation that I do otherwise.
That in itself proves no such tracking system existed, for they would purportedly have contacted me before I endured enough harassment and retaliation in order to have no choice but contact them about it.
So, if you can’t believe Boeing’s Chief Counsel or CEO, who can you trust at the company? The answer is obvious.)
And that has been…And everybody in the company knows we do that.
(Another lie. How can everyone at Boeing know such a tracking system as Mr. McNerney describes exists when it clearly does not exist as he stated, and the vast majority of people at Boeing have never heard of it? Especially people like me who went through both avenues to submit reports—both the “Boeing Ethics hotline (email actually, in my case)” and to the Boeing Legal department’s highest official?
Simply telling someone reporting ethical misconduct that retaliation won’t be tolerated, and then not only tolerating it, but helping initiate it and turning a blind eye to it as happened in my few cases is not such a “tracking system.”)
So that has been very helpful to get at that issue.
(Another untruth. I told you this portion of his testimony was riddled with them, one on top of another, in this case. How can something be helpful in alleviating people’s fears of retaliation if it does not exist?
They neither “regularly check in with them” nor do they “track for a long time” as McNerney lied.
They do however have a system in which they track what they view as problematic “do gooders” that come forward and report things to “Boeing Ethics” or Boeing Legal, but that system is for ensuring retaliation happens, not the opposite as Mr. McNerney disingenuously told the committee.)
WARNER: And could you address the protection of any reprisal against him, or adverse to...
MCNERNEY: Well, that is a punishable offense in and of itself at our company -- anybody caught even looking like they're performing some kind of reprisal against somebody. It's a very serious matter. And that is an offense in and of itself.
(Another whopper! Of course, if he is speaking about an hourly worker performing a reprisal against another hourly worker he may be correct in a few cases, as hourly or non-management salaried workers are viewed as expendable by management at Boeing.
However, in the context of the question and answer, Mr. McNerney’s answer is another fabrication, for in one vast area of ethical complaints to “Boeing Ethics,” in fact the opposite is true—in the most common form of ethical violation at Boeing as shown by the very violations of the law Mr. McNerney sat down before the committee to obfuscate—ethical violations by Boeing Management.
There is a modus operandi in “Boeing Ethics” that treats Boeing Management as untouchable when it comes to ethical violations, especially for the most common allegations against Boeing Management—those made by some non-management employee reporting directly or indirectly to that manager.
Any such person reporting Boeing Management misconduct to “Boeing Ethics” had better have an unquestionable videotape of the reported manager’s misconduct, because the “rules of evidence” are vastly different for managers and non-managers who have ethical complaints against them. No such “gotcha on tape” evidence would be required for a non-manager to be investigated and pilloried for an alleged ethical breach, however, nothing lesser would be needed to make an ethical complaint against a Boeing Manager “stick.” Never mind that any employee possessing such videotaped or taped evidence would be fired by Boeing and not allowed to present it because such taping is against company policy (for good reason, if you are one of the many unethical Boeing managers).
So Boeing Management is pretty much teflon coated when it comes to ethical complaints, contrary to Mr. McNerney’s fabrication in this Congressional hearing of a “Boeing ethics system” that ignores such “hierarchy.” Nothing could be further from the truth at Boeing, and Mr. McNerney would have known that at the time of this testimony.
Sure, there are limited exceptions where management can be brought down by an ethical complaint from a junior employee. One of the very few would be when the manager’s misconduct threatens to cost the company much more in court if the company does not get rid of the manager when someone complains of their misconduct.
This applies most commonly in the case of when a manager is accused of sexual harassment. Every other type of harassment of employees is tolerated well at Boeing, it seems, but with a valid sexual harassment claim, the company will get rid of the manager to reduce its exposure to lawsuit in court. This is because of the success of (mainly women, of course) pressing for and winning huge judgments in court against companies who tolerate such behavior by management.
Even in these situations, however, Boeing Management is treated with kid gloves by their management. They are usually given the most advantageous exit from the company they could hope for under such a situation. Many are given the option to simply retire rather than be fired for their documented sexual harassment.
I know of two such cases out of the three I “witnessed” over the years at Boeing.
The first one was when I was on the A-6 Re-wing project and my General Supervisor was walked in on “boffing” a sealer lady on top of a desk by one of his managers who was checking out what I believe were noises he heard from the unoccupied office floor above the office area for the program. He walked into the office and his manager stopped and glanced at him for a moment, them went back to his “business” of “boffing” the sealer employee on the desk.
I’m not sure who made the complaint, the manager who walked in or the sealer, but shortly after the news of what had happened flowed through the small factory, the General Supervisor was given the choice of retiring or being fired. He retired, of course.
The other incident was with two managers at the Propulsion Systems Division of Boeing where I last worked. Two Manufacturing managers had (I don’t know why the employee was with them, but it was supposedly business related) stopped by a strip joint while commuting from plant to plant with a woman employee who was a decade or decades their junior.
The woman (hourly) employee complained, and the General Supervisor involved was allowed to retire. Many people on the production floor enjoyed his departure as he was a very unliked character of questionable ethics before the strip club affair.
The first line manager involved apparently did not have the time to retire, so he was allowed to take a Lead hourly position at Boeing in another area he may or may have not qualified to “bump back into” from his management job.
So Boeing is fairly consistent in my experience in giving sexual harassers “retirement” or alternate job “parachutes” rather than the firings hourly or salaried employees would have gotten in the same circumstances.
The “Hierarchy free” “Boeing Ethics” program it is anything but.
There are even exceptions to this "rule" however, depending on which manager you are and who are your other friends in management.
Sometimes Boeing managers are let off scott free for such misconduct while the “sexually harassed” woman is the one fired.
One such incident happened in Everett when I worked there. A manager was “boffing” a woman sealer (deja vu?) in a car in the parking lot outside the Everett plant. The bouncing motion of the car caught the attention of Boeing security, who found the two in a compromising position.
What was the result of the “Boeing Ethics” investigation? Hard to believe, unless you know the hierarchical “Boeing Ethics” system like subject matter experts like I do, but the sealer woman was fired because the manager was having sex with her in the car outside of her established break or lunch times. Since there are no established breaks or lunch times for Boeing managers, the manager was allowed to walk away scott free from the incident!
In fact, since Boeing Management did not want to apparently have his well known actions to be a distraction in his area at the time of the incident, he gained a coveted management job on the flightline when they transferred him to another area to make him less known for his exploits. That is where I saw him, when I was working on the 777 PED (Passenger Entry Door) crew on the flightline.
So, Boeing Management for the most part protects their own, and the “Boeing Ethics” program participates in that protection on behalf of management contrary to what Mr. McNerney testified to Congress here.)
WARNER: Was that laid out in this plan as a part of the plan?
MCNERNEY: Yes, it is. That is...
WARNER: And are you able to supply that to the committee?
(Oops! I wonder what they had to gin up to submit to the committee on the issue? Unfortunately, due to such records not being available publicly without an act of Congress, we may never know. Since Senator Warner did not correct Mr. McNerney’s dodging of his question, it is doubtful that anything supplied to the Committee in response to his request would be closely scrutinized even if it was in fact produced.)
WARNER: I think it would be helpful if it could be made part of the record.
WARNER: Thank you.
End of portion of testimony.
So, Mr. McNerney's fabrications of the effectiveness and even existence of the "Boeing Ethics Program" before Congress aside (making him much like his two predecessor CEOs at Boeing), the above gives you some insight into the real "Boeing Ethics" program and how it serves to protect Boeing mismanagement and corruption and retaliate against those that dare to report misconduct in Boeing Management through this corrupt "ethics" program. When even your own ethics program is corrupt, it is no huge surprise to find out the management of the company is similarly corrupt.
Now free of the "requirement" to have the facade of an ethics program as described above as part of the GSA as the GSA is now expired, "Boeing Ethics," at the behest of still corrupt Boeing management, is more free than ever to push the envelope and become the most arrogant ethically challenged "ethics program" at any corporation (if they weren't before the GSA expired), if they so choose.
Stockholders of Boeing don't have much farther to go than here to find out why management at Boeing is so broken and is so very unlikely to correct its own actions that will place the whole company at risk when oversight returns soon to Washington, D.C.
A comment by GFS on this blog entry:
Good to see you are still fighting the "evil empire" as some folks I know who work there call it.
It just goes on and on. It is astounding that so many laws and policies can be broken, that so many contract requirements can be ignored, and so much corruption can be repeatedly hidden and protected.
Keep up the good work.
Thanks GFS, for the kind words. Evil indeed. Early in my Boeing career I thought it was mostly incompetence in management. For most of my career at Boeing (and virtually all of my time as an inspector there) I realized it was something else--an arrogance that Boeing Management is above any regulation or any law, even laws that, when followed, protect many lives. I guess you could call that evil incarnate.
It will take more than I to stop these organized criminals called "Boeing Management" and their kin in "oversight agencies." But perhaps the winds of change that are blowing will make these "evildoers" pay for the many regulations, laws, and lives they have effectively cost us here as well as around the globe.
Boeing is global. And so is their arrogant and, yes, even evil management.
When you look for the culprits who are behind the intentionally broken government and the financial meltdown of today, you don't have to look much farther than at Boeing Management.
The Last Inspector
Another comment by GFS:
Government Contracting has been a fertile ground for creation of whistleblowers and of frustrated federal oversight employees who are not being allowed to do their jobs, and are condemned, harassed and suffer outrageous retribution from their employers and others (OSC for example) if they seek to address the real problems in an ethical manner.
This article gives us something to think about. I urge all whistleblowers (both industry and federal) to contact your elected politicians, including Obama/Biden with your stories and urge them to support whistleblowers and federal employees by empowering them to do their jobs and address government contracting fraud, waste, abuse and other illegal activities successfully and without a total meltdown of their personal lives.
Please go look at this article in the Washington Post: "Like Clinton, Obama Calls for Fewer Federal Contractors" by Robert O'Harrow, Jr. 11-11-08
Another comment by GFS:
Please visit this link for the article: "Widespread Complaints About a Rudderless Government"
This pretty well describes what federal workers, particularly oversight and law enforcement, (think Justice dept.) have been going through. For the oversight agency employees, not being allowed to do your jobs by political appointees put into place by Executive Branch, getting beat up for persisting in doing your jobs you were hired to do by those appointees and their minions, and then finding no one in Judicial branch will actually take the case you worked and prosecute it is indeed demoralizing. Having your professional and personal life trashed by these corrupted ones is insult upon injury.
Excerpt from Washington Post article:
"In numerous agencies, federal civil servants complain that they have been thwarted for months or even years from doing the government jobs they were hired to do. Federal workers have told presidential transition leaders they feel rudderless, their morale impacted by the Bush administration's opposition to industry regulation, steep budget cuts or the departures many months ago of Bush political appointees. Though they fear publicly identifying themselves, numerous federal workers said in interviews that they are down, but also excited about new leadership." -Carol D. Leonnig, Washington Post.
Thanks, GFS, for the information. Indeed, government contractors must be eliminated from doing inherently governmental functions (such as fighting wars and processing reports of lawbreaking in industry and government). And those federal contractors (like Boeing, in this edition of my blog) that violate laws and regulations must have their responsible managers held criminally accountable, even if they are allowed to buy their way out of debarment, as Boeing did. The vast majority of criminally culpable Boeing managers are still working for Boeing, after they scapegoated one high profile Boeing executive and a Boeing employee who was formerly a supposedly "unbiased" procurement officer for the Pentagon over Boeing contracts.
The GSA lapsing may actually be a good thing. The oversight of it (as in so many of these deals) was corrupt, and now the limitations in it on not prosecuting Boeing if it turns a certain portion of its criminal cadre of managers in for any particular crime Boeing Management commits no longer applies.
I think that the DOJ under President OBama will be much more adverse to the kind of criminality corporations such as Boeing have been (and continue to be) engaged in than the DOJ under the last person that took the presidency.
The Last Inspector
A comment by Robin Petersen:
I just wanted let you know that I just finished watching the testimony of Mr. McNerney before the Armed Forces Service Committee (August 1, 2006 C-Span). I nearly fell off my chair. This video will be the "Nail in the Coffin" if a jury ever gets an opportunity to hear about the violations that are taking place within the Boeing organization and its subsidiary Boeing International Support Systems, S.A. (BISS).
Your case is clearly an example of a person who came forward with safety concerns since Mr. McNerney's congressional testimony. Boeing has completely violated every shred of their "so called" ethics program, not only in your case, but mine as well.
The Boeing Company retaliated against you in the worst way. Their attempt to bring criminal charges against you in order to deflect the truth failed. "THE TRUTH" is that "The Boeing Company" has a serious Safety and Ethical problem and has failed to do the "Right Thing" which was to protect the lives of those who will be ultimately flying in their equipment. Their actions can only expressed as knowing and willful negligence.
The video: Here is the CEO of "The Boeing Company," Mr. James McNerney, who personally received a written report of ethics violations from me via return receipt fedex mail in June of 2009 and did absolutely nothing to help me. My contact with him came after utilizing his ethics hotline number with no success. Mr. McNerney is a member of the Ethics Board and yet, he made absolutely no contact with me to address my concerns of ethics violations and the criminal activity that was taking place within his company last year (2009). Here is the CEO of the Boeing Company who testified before the committee that his company has a well thought-out and efficient hotline program to take reports in which to review the ethical concerns of his employees. Evidence exists that proves that Mr. McNerney has not been truthful with the congressional committee. He does not have the solution to correct unethical behavior at his company, because if he did, he would have to remove himself from his position as CEO of "The Boeing Company."
I sent the video link to my Attorney, CBS News, and to all the other Veterans who witnessed and experienced passport confiscation, inhumane treatment, fraud, safety violations, intimidation and retaliation that took place in Saudi Arabia by Boeing/BISS managers. I am certain that these violations are still taking place and that others will come forward in time.
Your story and the evidence of a CEO who has clearly lied to congressional members will be useful information.
The Last Inspector