U.S. Probing Charges of Double Billing at Boeing

The federal government is investigating allegations that Boeing Co. overcharged and double-billed the Department of Defense millions of dollars for repairs of buildings leased for secret military work.

The investigation by two defense agencies, a congressional panel, and reportedly, the Department of Justice’s criminal division, was sparked by a Boeing electrical engineer and inspector, Kevin G. Kelly, who was fired Friday.

But it has gone beyond his allegations, said an investigator for a congressman looking at the case.

The investigation appears to have started with Boeing’s lease of buildings under government contract from millionaire Seattle developer David Sabey, according to an internal Boeing memorandum obtained by the Associated Press.

The buildings were built to Boeing’s specifications by Sabey. But Kelly says three buildings at one office park were substandard and required $3 million in repairs, and that Boeing billed the government for the work, rather than Sabey.

Boeing spokesman Paul Binder confirmed Tuesday that an investigation was under way but declined further comment about the specifics of the probe. Sabey Corp. attorney Don Berdick said the firm would have no comment.

The leases with Sabey include buildings at two office parks used by Boeing Advanced Systems for military work. The Boeing division has defense contracts and subcontracts that range from work on the B-2 Stealth bomber to guided missile systems and avionic research.