U.S. Expands Probe of Boeing Bid Process
Federal prosecutors have broadened their criminal investigation into Boeing Co. to determine whether the company improperly used documents from rival Lockheed Martin Corp. to bid on NASA rocket contracts.
In a disclosure that adds to the firm’s legal woes, Boeing confirmed Tuesday reports that a former employee, Richard Hora, possessed proprietary documents from Lockheed that may have helped Boeing win rocket contracts from the space agency.
“They’re looking at whether the misdeed of one employee had some impact on NASA contracts,” said Boeing spokesman Dan Beck. Boeing added that the company fired Hora once it learned he had the “nonpublic” Lockheed documents.
The NASA probe was first reported by the Wall Street Journal on Tuesday.
The disclosure comes as the U.S. attorney’s office in Los Angeles is wrapping up a criminal investigation of allegations that Boeing illicitly obtained thousands of pages of proprietary Lockheed documents to win a $5-billion contract for a new generation of Air Force rockets.
Last summer the Pentagon stripped Boeing of about $1 billion in rocket contracts and suspended it from bidding for future rocket launch contracts.
The new NASA investigation may hamper Boeing’s effort to have the Air Force suspension lifted. This month Boeing executives had signed off on a tentative agreement with the Air Force, but last week an Air Force spokeswoman said no agreement was forthcoming.
A former Boeing employee who apparently put together cost estimates on both the Air Force and the NASA competitions, began talking to prosecutors this month. The U.S. attorney’s office declined to comment, but a source familiar with the probe said that the individual, Matt Jew, was given immunity.
Jew worked at Boeing’s rocket division in Huntington Beach; Hora worked at the Seal Beach office. Neither could be reached for comment Tuesday.
According to sources involved in the investigation, the NASA part of the probe involves separate Lockheed documents and different Boeing employees from the Air Force contract. Jew, however, had some knowledge of or role in both contract bids, the sources said.
“After we conducted an internal investigation, we immediately notified NASA and passed on the information to Lockheed,” Beck said.
Boeing has staunchly maintained that the previously reported pilfering of thousands of pages of Lockheed documents in the Air Force case was an isolated incident engaged in by several rogue employees. But the NASA probe, and a similar case involving a missile defense contract in the late 1990s, seems to undermine the argument.
In the missile case, Boeing employees improperly used a Raytheon Co. document marked “competitively sensitive” to compete on an antimissile system, according to court records.
Hora was hired by Boeing in 2001 to do “competitive assessments” for the company. Last month he filed a lawsuit in federal court in Santa Ana accusing Boeing of firing him to protect itself in the federal probe.
According to internal Boeing documents, Hora maintained that he never used any proprietary Lockheed documents to prepare an analysis of Lockheed’s bid for NASA contracts.
Investigators are now probing whether Hora’s document had a direct bearing on Boeing’s winning NASA rocket contracts, sources said.
