Plea Deal Expected in Probe of Boeing
Former Boeing Co. Chief Financial Officer Michael Sears has agreed to plead guilty to conspiring to deceive the U.S. government about negotiations on a $23-billion contract, according to a person familiar with the matter.
Sears, 57, is cooperating with prosecutors investigating negotiations he had with former Pentagon official Darleen Druyun, to whom he offered a job, the source said. Druyun pleaded guilty to the conspiracy charge in April, saying she had received the job offer while negotiating for the Air Force. She will be sentenced Aug. 6.
The Air Force’s agreement to award Boeing a contract for 100 aerial refueling planes was suspended, pending review, in November, when Druyun and Sears were fired by Boeing, the No. 2 U.S. defense contractor.
Boeing “does not know of Mr. Sears’ plan” to plead guilty, Boeing spokesman John Dern said. He added at it was “important to note that the facts associated with his case were first discovered and voluntarily reported by Boeing to the U.S. attorney last November.... Boeing has cooperated fully during the government’s investigation, and will continue to cooperate through its conclusion.”
Boeing Chief Executive Harry Stonecipher said this month that he had expected the Air Force to select Boeing to provide the air tankers as early as next year. The current KC-135 tankers have an average age of 43 years.
“The Air Force has not changed its mind one iota about what they want,” Stonecipher said in a July 12 interview at the company’s Chicago headquarters. “They have not wavered in terms of there being a need, and there is, and so it’s an opportunity for us.”
Druyun, who oversaw Boeing’s contracts with the Air Force, joined the company as a senior vice president two months after leaving the military in November 2002. The tanker talks were completed seven months later.
Former Boeing CEO Phil Condit resigned a week after Druyun and Sears were fired. He has not been accused of any wrongdoing.
In Druyun’s statement to the court, she described e-mail exchanges she had with Sears to discuss a job before she disqualified herself from Boeing-related negotiations Nov. 5, 2002.
Stonecipher, who came out of retirement to replace Condit, said the company had found no evidence to suggest Condit was involved in Druyun’s hiring. He also said he didn’t expect any current employees to be implicated as part of the federal investigations of the case. If that did happen, he said, the company would act quickly.
“If anyone else was involved, the U.S. attorney would be sitting on our doorstep,” Stonecipher said. “We’re not concerned about it. If I got named, the board would fire me in a day because we have a process for dealing with it.”
Boeing’s agreement with the government would have included the Air Force buying and leasing 100 planes over eight years. The tanker is based on the 767, a 20-year-old commercial aircraft model that may be discontinued if the tanker agreement is canceled. Boeing has spent $138 million to design the tanker as of the end of March and sells them to Italy and Japan.
Druyun had agreed on Oct. 16, 2002, to accept a position at Lockheed Martin Corp., the biggest U.S. military contractor, and backed out of that agreement about four weeks later to take the Boeing job, court papers show.
Sears asked the court to schedule a hearing in the first week of August to enter his guilty plea, the source said. A criminal case was entered in the court docket in Alexandria, Va., on Wednesday and assigned to U.S. District Judge Gerald Bruce Lee.
Under federal sentencing guidelines, Sears could face as many as five years in prison. He may not serve any jail time as part his deal with prosecutors, the person said.
Sam Dibbley, a spokeswoman for U.S. Atty. Paul J. McNulty in Alexandria, declined to comment.
A lawyer for Sears, James D. Wareham, also declined to comment.
Shares of Boeing on Friday fell 24 cents to $47.06 on the New York Stock Exchange.
