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Boeing Sacks Finance Chief in Ethics Row Over USAF Tanker Contract

Boeing, America's second largest defence contractor, yesterday dismissed Mike Sears, its chief financial officer, for unethical conduct in the hiring of a senior Pentagon official to run a $20 billion refuelling contract.

The Pentagon is mounting a criminal investigation into alleged improprieties in Boeing's bid to lease 100 converted 767 aircraft as air-to-air refuelling tankers for the US Air Force.
Boeing has bid to lease 100 converted 767 aircraft as aerial refuelling tankers
Boeing has bid to lease 100 converted 767 aircraft as aerial refuelling tankers
Boeing sacks finance chief in ethics row

David Gow
Tuesday November 25, 2003
The Guardian

Boeing, America's second largest defence contractor, yesterday dismissed Mike Sears, its chief financial officer, for unethical conduct in the hiring of a senior Pentagon official to run a $20 billion refuelling contract for the United States air force.

The aerospace group admitted that Mr Sears had violated company policy by communicating with Darleen Druyun about her future employment when she was still acting in her official government capacity on matters involving Boeing.

Ms Druyun - in effect head of air force procurement before joining Boeing as deputy head of its missile defence division - and Mr Sears covered this up, an internal investigation found. Ms Druyun was also dismissed.

This is the latest embarrassing setback to hit the aerospace group, which is still reeling from Pentagon sanctions imposed this year for its illegal use of documents belonging to Lockheed Martin, its main American rival, in bidding for a $2bn military satellite rocket contract.

Mr Sears, who joined McDonnell Douglas in 1969, becoming head of its aerospace business in advance of Boeing's takeover in 1997, was widely tipped to succeed Phil Condit as chief executive when he steps down in 2006.

The Pentagon is mounting a criminal investigation into alleged improprieties in Boeing's bid to lease 100 converted 767 aircraft as air-to-air refuelling tankers for the US air force.

Ms Druyun, whose daughter and son-in-law work for Boeing, is alleged to have shared with her future employers pricing data from Airbus, largely owned by the European group EADS, and bidding against Boeing for the tanker programme which could ultimately involve 500 aircraft.

The timing of Mr Sears's sacking could not be worse for Boeing in Britain. The company has joined forces with BAE Systems to run a consortium competing against an EADS-led bid for a £13bn contract over 27 years to supply refuelling tankers for the RAF. A decision is due early next month.

Mr Condit said "compelling evidence" of misconduct by Mr Sears and Ms Druyun had come to light "over the last two weeks", leading the board to order their dismissal.

Mr Sears initially approached Ms Druyun's daughter about employing her mother.

In July Boeing called in a former senator, Warren Rudman, from a prominent law firm to review its ethics programme and set up an office of internal governance. His work has now been extended to cover the hiring of government employees.

"Boeing must and will live by the highest standards of ethical conduct in every aspect of our business," Mr Condit said. "When we determine there have been violations of our standards we will act swiftly to address them."

Analysts remained sanguine about Boeing's prospects and shares fell slightly in early trading on Wall Street. The group named corporate controller James Bell as acting CFO.

homepage: homepage: http://www.guardian.co.uk/business/story/0,3604,1092475,00.html
address: address: Guardian UK