1.31.2006
Bain Feels Boeing's Pain
This just in (via HobbySpace's Space Transport News), today's Seattle Times reports on a chilling, no-sugar-coated speech on Boeing's legal troubles, delivered by senior vice president and general counsel Doug Bain to Boeing brass earlier this month in Florida at a company leaderhip retreat.The aerospace giant's top lawyer was not happy.
In light of two recent major defense scandals, the incarceration of two former executives, ongoing federal investigations and prosecutions, pending penalties, settlement negotiations and other concerns, counsel had a lot to vent.
According to the Times, Bain told company honchos, "There are some within the prosecutors' offices that believe that Boeing is rotten to the core. They talk to us about pervasive misconduct and they describe it in geographic terms of spanning Cape Canaveral to Huntington Beach to Orlando to St. Louis to Chicago. They talk about it in terms of levels within the company that go from nonmanagement engineers to the chief financial officer."
And the "State Department's view of Boeing is, we just don't get it."
In the speech, Bain delineated a range of legal and ethical troubles at Boeing, including the likes of:
- Fifteen company vice presidents "pushed out for various ethical lapses in recent years."
- Possible coming indictments under the Economic Espionage Act, the Procurement Integrity Act, the False Claims Act, the Major Frauds Act, conflict of interest laws, conspiracy and aiding-and-abetting charges.
- Ongoing legal threats including a denial of export licenses, loss of security clearances, a possible re-suspension on bidding for space contracts or debarment from all government defense contracts.
- 900 formal ethics cases brought to the company's Office of Ethics and Business Conduct in 2005 "found to have substance."
And as Boeing faces damages assessments that, as Bain warns, could exceed $5 billion, (although some call this estimate intentionally high,) where does the company stand? As the embattled but hopeful general counsel concludes, "I really feel that we've turned the corner and that there's a renewed emphasis and energy on doing the right thing."
(Meanwhile, Corporate Crime Reporter commented, "Whoever leaked the speech to the Times performed a public service.")
