New Year, Decade Begin--Will This Finally be the Decade that Boeing Corruption and Lawbreaking Finally are Investigated and Brought to an End?
The last decade’s unceremonious departure just a few days ago has resulted in a collective sigh of relief among many intelligent people and pundits.
The last decade has been chiefly relegated to the trash bin of history due to the eight years of the disastrous Bush II presidency and the aftermath of that disaster still with us.
The decade began with a selected rather than an elected president, a presidency that began disastrously which was shortly followed by the September 11th attacks, and an administration that took their eye off of the ball of the war in Afghanistan to initiate a disastrous war of mistaken choice in Iraq. That was followed by the same president, who only barely got elected in 2004 by stoking irrational levels of fear of terrorism in the country, continuing his incompetence with the response to Hurricane Katrina. The decade ended with a financial meltdown born of deregulation that almost resulted in Great Depression II, which we are (in addition to the continuing two wars) still dealing with.
Of course, Congress was not blameless either, going on a “borrow and spend” binge doubling the deficit by approving Bush’s budgets, approving more tax cuts for the rich, and going along with the deregulation of the financial industry Bush wanted.
During this anti-regulation decade, even the regulations not repealed were routinely broken at corporations like Boeing, often with no consequences.
Whistleblowers who reported fraud by Boeing were routinely retaliated against illegally, with the government largely watching and letting it happen. And in King County Prosecutor Dan Satterberg’s case, there was actual participation in the retaliation and obstruction of justice on behalf of Boeing. That should be illegal you say? It certainly is, but it is actually not too surprising an act of corruption for a partisan Republican politician acting in response to generous campaign contributions from Boeing and Boeing’s main outside law firm, Perkins Coie. Without their generous help, Dan Satterberg may well have lost the race to succeed Norm Maleng as prosecutor.
Some whistleblowers are fighting back against the unjust and illegal retaliation by Boeing in court, and early this decade many if not all of those may win substantial judgments against Boeing for their wrongdoing, as they should.
Boeing chose to jump on the Bush "anti-regulation" and "ignore enforcing regulations" bandwagon. And, Boeing got busy early in the decade with revolving door fraud, as in the case of hiring Druyun Quid Pro Quo for fixing the first tanker contract award in Boeing’s favor. Such revolving door shenanigans continue as employees eagerly jump from government to Boeing and back to government again, each time performing more services for Boeing--Services such as improperly gaining troves of information, getting new potentially corrupt government contacts to improperly influence, getting federal regulations adjusted to better advantage Boeing, and making regulations less of a barrier to further opportunities for more Boeing questionable business dealings. Combined with Boeing lobbyists and campaign contributions, it is a powerful cabal that works 365 days a year to improperly gain taxpayers dollars for intentionally defective work.
Procurement fraud was also a key management tool for Boeing, such as with Boeing stealing Lockheed Martin’s competition sensitive bid data to rig and win the EELV competition.
In 2002 and 2003, a long established revolving door relationship between Boeing and key FAA officials nixed my report of Boeing Management fraud in QA across the enterprise that should have resulted in the pulling of Boeing’s Production Certificate.
This was eerily similar to the same thing that happened right at the start of the decade, when the findings of the FAA’s 1999/2000 Special Technical Audit of Boeing almost resulted in the shut down of Boeing production lines until they were brought back into compliance with Production Certificate requirements. That danger to Boeing ended (as well as the prospect for any real reforms of the quality system to eliminate the fraud within it) when Boeing hired the head of that investigation, FAA’s Tom McSweeney, for several times his FAA salary. This shoe fell shortly after Alan Mulally and a plane load of other Boeing execs flew to Washington DC to meet with McSweeney in a successful attempt to forestall any negative affects to Boeing’s bottom line from the Special Technical Audit.
In fact, all of Boeing Management’s wrongdoing does not stop at the closing of the last decade. Some other examples, such as the case of B-2 ITAR technology being used on the 777 program without the required approvals from the owners of the technology or the required export licenses in the mid 90’s and earlier are notable.
Lawbreaking in the export area continued into the last decade, with the QRS-11 intentional export law violations, as well as additional use of B-2 ITAR technology without the owner’s permission or necessary export licenses as work progressed on the 787 program.
It was a decade for Boeing where “the end” (billions of R & D savings by stealing and using ITAR military technology on new commercial programs, saving money by having inspectors stamp off inspections of aircraft as done when they were not, etc.) justified the noted illegal means.
Strange, but these Machiavellian business practices of Boeing continued undeterred past the embarrassing Global Settlement Agreement episode with Boeing being held accountable for only two of their numerous frauds—the Druyun and Lockheed data theft frauds. Boeing inexplicably received the equivalent of a slap on the hand, while giving up two to cool their heels in prison.
It continued on past the ineffective implementation of the “Boeing Code of Conduct,” which would leave any rational person to believe that either Boeing Management has exempted itself from it, Boeing has another secret “Code of Conduct” embracing fraud and lawbreaking as legitimate tactics to meet financial goals, and/or they cross their fingers behind their back every year when they sign it.
In fact, according to the Non-Prosecution Agreement facilitated by Eric Holder during the negotiations of how Boeing would clean up their act and not sin again, Boeing must among other things teach their employees about ethics and watch for signs of criminal or unethical behavior. The agreement allows the company to be held blameless (avoiding being barred from defense contract work) if, when fraud or other crimes are discovered they hand over the wrongdoers (as low as possible of course below upper management) before actions are taken against the whole company by the Justice Department. This of course means the company must view a certain number of their employees at various levels as expendable, but that is of course “just a business decision.”
I don’t claim to be omniscient about the numerous frauds committed by Boeing during the last decade. Putting together a comprehensive list would take weeks, and I won’t even pretend to be privy to all of the still ongoing frauds by Boeing Management and the few ongoing investigations that have managed to claw their way into existence.
But the bigger question voiced in this blog is not the unabashed use of fraud by Boeing this past decade to win contracts and enhance the bottom line and the value of their stock options which was rarely addressed by authorities even when whistleblowers like me forwarded undeniable proof of that fraud to the relevant authorities. And even when it was acknowledged at all, as with the noted GSA investigation, the company escaped with barely a slap on the wrist and no real in-depth investigation to catch and hold all involved parties in Boeing Management to account for that fraud. And, as well, the company itself wasn't held criminally accountable, as would seem to be deserved.
No, this blog is focused on the future.
Will this be the decade in which Boeing fraud will at long last be fully investigated and held to account by the relevant authorities? Or will it be more of the same, with corrupt government officials lining their pockets at the expense of Justice and of Boeing being truly held accountable to the laws and regulations which go along with the many lucrative defense contracts they’ve been paid with tax payer dollars to complete?
It is still very early in the Obama Administration's watch. I expect we’ll shortly see evidence of which way things will go. I for one hope the current administration will be up to the challenge and will tenaciously go after fraud, waste and abuse in government and in corporations like Boeing.
Although Boeing Management does not hold itself to account for its own failures and lawbreaking, and, in addition, actively uses revolving doors to manipulate things as necessary, that shouldn’t be the case for the authorities that have the power to hold Boeing Management accountable for their lawbreaking.
Sadly, things at the outset don’t look good. Boeing has “revolved in” some of its former employees and officials who have covered their arses by burrowing into the Obama administration or leaving their Bush appointed positions for career civil service jobs where they hope to hide and continue on. One such person is Attorney General, Eric Holder, who helped weaken the language in the now infamous Non-Prosecution Agreement for the benefit of Boeing, Jim Jones, NSA Chief for Obama who until recently was Director serving on the Boeing Audit and Finance Committees, and Gary Locke, Commerce Secretary who used to say “how high” when Boeing asked him to “jump” when he was Washington Governor. It is a formidable problem.
But, looking at things optimistically, maybe the noted officials will have the backbone and conscience not to act as moles for Boeing, while performing their jobs and will instead do what is right for the United States, and show some loyalty to the taxpayers who are the source of much of Boeing’s profits. This would be departing from the path assigned by Boeing upper management, but maybe they will gather enough true patriotism to do it. Maybe 2010, and the decade it begins, will at long last be the time when corrupt Boeing Management is finally held to account for their fraud, regardless of the consequences to Boeing’s bottom line.
But don’t hold your breath.
Public officials such as the senators from Boeing, Patty Murray and Maria Cantwell, have long assumed whatever Boeing does is good (even to the point of turning their heads away from Boeing corruption even when it is reported to them complete with evidence of the crime). Both have turned away from whistleblowers who’ve asked for assistance in standing up to retaliation by Boeing. Their chanted mantra, “Boeing is good for the U.S. and quality U.S. jobs,” is not necessarily true anymore, and has become an embarrassment to those who know better.
Maybe they will have an epiphany this year and finally realize that letting Boeing continue to get away with fraud is not in the best interests of Boeing workers in Washington State, nor of U.S. Taxpayers. In fact, it is not in the best interests of Boeing’s long-term health and continued corporate existence.
As Murray is up for re-election this year, I hope she changes her ways and begins to support the true interests of Boeing employees and upholds the law and enforcement actions even against Boeing, or this voter and many others won’t be voting for her this year.
Hopefully this decade will be the “light” compared to the last decade’s “dark” of unbridled corporate corruption at companies like Boeing.
Heck, maybe if Boeing lawbreaking and fraud is brought to an end early this decade, Boeing P.R. can begin to tell the truth and nothing but the truth.
It would be nice to see the era of Boeing P.R. hyping the good news and holding back on, (or mischaracterizing), the bad come to a well-deserved end.
A comment on this blog entry by GFS:
On top of all of this add to the list another one:
Aubrey Cohen at the Seattle PI posted a story that Boeing was receiving $15.9 million in stimulus money to clean up the horrendous mess they made polluting an area of California (near Simi Valley). Boeing was already sued, lost, and had to pay damages to a group of citizens who suffered ill health (cancer) from the pollution. Boeing also has sued in California to try to derail strict pollution control requirements, according to the same post.
I am not surprised in the least about the Boeing Management conduct you pointed out.
As many tried to disinform in comments on the noted article, it was not all pollution prior to Boeing purchasing NAA or Rockwell:
"Boeing acquired the aerospace divisions of Rockwell International in 1996, but community activists said Boeing has been fighting its responsibility for pollution that occurred before and after the purchase."
And the 2007 in the article show Boeing's violations are very recent indeed.
As most commentators on the P-I site completely missed, the article wasn't about pollution per se, but awarding government contracts to companies that are/were recently the subjects of criminal probes and other allegations of fraud.
That description fits Boeing and its management to a "T," willing to do anything (legal or not) to meet the next quarter's targets.
The linked article that prompted Aubrey's article is very good.
And their point is well taken--there is a very powerful argument that companies whose management engage in lawbreaking and fraud be barred from getting any government contracts until they reform into ethical law abiding companies--not companies, like Boeing in this case, who seek to change the law to allow what was formerly lawbreaking, or break the law at will without an effort to change the law.
The fox watching the hen-house is right. Those 11 jobs should have been given to an independent contractor.
As I witnessed myself at Boeing for years, Boeing cannot seem to perform the functions of government delegated to it if they think money can be made by gaming the system and only pretending to do the delegated functions to the worst extent possible that will maximize the bottom line.
Such it was/is in the case of inspections of airplanes delegated to Boeing by the FAA via FAA Production Certificates. Only pretending to do all the inspections required is the norm. In fact, inspectors are retaliated against if they seek to inspect Boeing airplanes or airplane components anywhere near to the required level of detail and integrity.
Unfortunately, Boeing has been delegated new areas to thusly abuse since my time there.
That is the danger, as the article notes, of giving such work to known unethical/unreformed companies like Boeing.
Given this, Boeing should not even be allowed to bid on the tanker contract until they reform their management to the required level of integrity for government contractors.
Seen any reform of Boeing Management en masse since the largely sacrificial lamb pseudo-reform from the first tanker contract fraud Boeing performed?
Managers are allowed to retire (as Carson was), or moved on to another program at Boeing if they fail, as was the case in the 787 program with Bair.
Firings en masse and real accountability for Boeing Management does not happen.
Was any management or company lawyer in the $25 million dollar fine fraud fired? The QRS-11 debacle in which multiple company lawyers should have been fired? Any management fired for the many cases of whistleblower retaliation by Boeing? No--Boeing just defends such actions by their management in court. That level of behavior sets a new bar for heights of arrogance.
The article's premise is right--we shouldn't give government contracts to crooked companies.
And if the workers and investors at those companies want that work, let them push internally for the management of the crooked company to be replaced until they are no longer a crooked company and the U.S. can do business again with them without holding our noses.
The Last Inspector
The Last Inspector