Ex-Executive of Boeing Pleads Guilty

Former Boeing Co. Chief Financial Officer Michael M. Sears pleaded guilty Monday to illegally offering a job to a former top Air Force acquisition official while she was negotiating a military contract with the aerospace giant.

Sears, 57, said little during the 15-minute hearing before a federal judge here. But in a statement, he admitted improperly offering Darleen Druyun a position at Boeing while she was concluding negotiations on a $23-billion Air Force deal to acquire 100 aerial refueling tankers from the company.

Sears, who is scheduled to be sentenced Jan. 21, faces a maximum of five years in prison and a $250,000 fine.

Druyun and Sears are key figures in the biggest Pentagon procurement scandal in decades. Boeing, based in Chicago, is the largest private employer in Southern California, with about 36,000 workers, many of whom work in the company’s defense operations.

Last month, Druyun made a surprise admission that she helped Boeing obtain favorable terms on at least four major Pentagon contracts because, beyond offering her work, the company had given jobs to her daughter and future son-in-law.

As a result, investigators from the Pentagon and other government agencies have been reviewing a host of contracts that Druyun handled during her nine years as the second-highest-ranking acquisition official in the Department of the Air Force.

Sears pleaded guilty to one count of aiding and abetting illicit employment negotiations in a violation of conflict-of-interest laws.

Under his plea agreement, Sears pledged to cooperate with investigators as they continue their investigation. According to federal sentencing guidelines, he faces little -- up to six months -- or no time in jail.

Yet prosecutors want more out of Sears. They have been trying to persuade him to agree to a broader plea that the talks he had with Druyun tainted Boeing’s defense contracts and hurt taxpayers. That, in turn, could lead to the cancellation of a number of Boeing projects.

But Sears has balked at making that admission, according to sources familiar with the case, making it likely that prosecutors will continue to press him before his sentencing. As part of his plea agreement, Sears said he would submit to a polygraph test, a step that in Druyun’s case led to her bombshell admission about her bias toward Boeing.

“Michael Sears’ secret employment negotiations with a senior Air Force official struck at the heart of the integrity of the multibillion-dollar defense acquisition process,” U.S. Atty. Paul J. McNulty said. “Our investigation is ongoing. We’re going to take it one step at a time.”

At least for now, though, Sears’ plea may represent a minor victory for Boeing because of “what it doesn’t say,” noted James McAleese, a lawyer who specializes in defense contracts.

“There is no admission by a Boeing officer that the previous contracts were tainted by wrongdoing,” McAleese said. “It has been limited to wrongful hiring as opposed to any long-term conspiracy impacting multiple Boeing contracts.”

Meanwhile, court filings released Monday provided further details of Druyun’s job negotiations as she pitted archrivals Lockheed Martin Corp. and Boeing against each other as they bid for her services. Several times Druyun told Boeing executives, including defense chief James Albaugh, that she’d accepted a job at Lockheed. But Druyun’s daughter continued to e-mail Sears that her mother wanted to work for Boeing.

Druyun finally took a $250,000-a-year post as vice president of Boeing’s missile defense business. Last November, the company fired her and Sears.

Boeing executives have long maintained that Sears acted alone in improperly recruiting Druyun. “Today’s action brings this matter one step closer to closure,” said Doug Bain, Boeing’s general counsel. Sears’ admission shows “that no Boeing executive other than Mr. Sears engaged in any wrongdoing in connection with Ms. Druyun’s hiring.”

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Pae reported from Los Angeles and Shiver from Alexandria.