Rocket Case May End With Plea Deal

Prosecutors are close to reaching a plea agreement with a former Boeing Co. rocket program manager who is charged with stealing trade secrets from a competitor, sources familiar with the case said Friday.

Under the deal, Kenneth Branch would plead guilty to a conspiracy charge that he obtained the documents illegally from Lockheed Martin Corp., the sources said.

The agreement, which prosecutors hope to finalize before Branch goes on trial in October, would culminate an unusual industrial espionage case involving bitter rivals that are the world’s largest defense contractors.

The charges against Branch, who worked for a Boeing subsidiary in Huntington Beach, stem from a high-stakes, multibillion-dollar competition in the 1990s to build a new Air Force rocket. The Evolved Expendable Launch Vehicle, or EELV, is designed to send military satellites into space more reliably and less expensively than current rockets.

Boeing initially won the lion’s share of EELV orders, but the Air Force, after finding out about the pilfering of documents, took away about $1 billion of orders and suspended the company from future rocket work.

Federal prosecutors filed criminal charges against Branch and his supervisor, William Erskine, last year.

Investigators said that Branch, who previously worked for Lockheed on its version of the EELV, was hired away by Erskine so that Branch could provide proprietary Lockheed documents to Boeing.

Both Branch and Erskine pleaded not guilty. It was unclear whether a plea agreement also was being sought for Erskine. His attorney could not be reached Friday.

Charges against a third Boeing rocket program manager, Larry Satchell, were dismissed recently after a grand jury failed to hand up an indictment within the required 30 days after charges are filed.

Boeing fired Branch and Erskine and reprimanded Satchell after its own internal investigation in 1999.

Branch and Erskine later filed a civil lawsuit against Boeing for wrongful termination, contending that company executives were aware documents had been pilfered and tried to cover it up by firing them. Boeing won the case, but during the discovery stage of the lawsuit, information surfaced that led the Air Force and Justice Department to investigate.

Lockheed has filed a separate civil lawsuit against Boeing to recover financial damages it said it incurred from the pilfering of documents, which Boeing has maintained involved only a small group of rogue employees.

A Boeing spokesman said Friday that he was unaware of any plea agreement. Neither Branch’s attorney nor the U.S. attorney’s office in Los Angeles, which is prosecuting the case, would comment.

The possibility of a settlement was first reported by the Wall Street Journal on Friday.