The Last Inspector, Boeing Whistleblower, Gerald Eastman, on Boeing Arms Export Control Violations and Continuing Problems at the Boeing Company. 

 

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Updated!–A Short Period of Time Passes, and Yet More Boeing Management Arms Export Control Violations Come to Light 

Wednesday, May 20, 2009, 01:44 PM
Posted by Administrator

Read the documents at the links below to find out the “latest” violations by Boeing management of the laws meant to protect our national security.

The State Department Directorate of Defense Trade Controls (DDTC) feels that Boeing has a “serious, systemic, and longstanding” problem with export violations. They are, of course, right on the mark about that.

Of course, the sanctions implemented for these violations will not deter further violations by Boeing management. Boeing management has demonstrated that even a 615 million dollar fine will not result in reform of itself and real, effective “compliance” processes, so the 3 million dollar fine for these violations will be orders of magnitude less effective at getting Boeing management to begin to fully comply with our most important laws to our national security.

The 3 million dollar fine is equivalent to a person making 60,000 dollars a year being fined one dollar in each of the next three years for serious violations of the laws meant to protect our national security. Would such a fine make such a hypothetical person do anything differently than they had done before? No? That certainly is the most obvious answer. That may explain why the equivalent $15 fine for the last egregious violations by Boeing of ITAR laws were not effective as well.

Sanctions for such serious lawbreaking imperiling the security of our nation would be much more effective if the “veil” the company places over violations is pierced by government officials and individual Boeing employees charged with crimes in addition to sanctions against the company itself. Of course, even such sanctions against complicit Boeing employees would have to be heavily policed to ensure Boeing did not pay any fines brought against individual employees. When I was in Flight Test QA I heard it bandied about that a Boeing pilot had been fined $30,000 for violating FAA regulations, but that Boeing had paid the fine for them. Of course, Boeing paying such a fine would have much less deterrent effect on the pilot than if Boeing hadn’t paid it for them.

In one of stories I was the source of about the unauthorized transfer of B-2 technology by Boeing to their Commercial programs, one employee is documented as fearing indictment if they wrongly certified the 787 was free of ITAR data. Boeing also unfortunately stepped in in that case as well and said they would take the blame instead if their certification was proven wrong, thereby short circuiting what was a healthy fear (for compliance) by the employee of the personal consequences of their actions. Obviously, for compliance sake, what is needed is for the consequences of violations of these important laws to reach the individual employees and lawyers responsible for breaking them, not just for Boeing to make them simply another cost of doing business.

Reading the below documents is also a bit concerning for another reason. Like many such agreements with Boeing, one person holds all the cards as to whether Boeing is deemed to hold to the agreement or not.

Laws meant to protect national security are much too important to give one person such an important responsibility. It would be too easy for Boeing management to perform a “Druyun arrangement” with such a person, even if that person had not before succumbed to such an offer. Any such agreements should ensure that no such conceivable fraud (especially considering Boeing’s documented history in this regard) by the company could endanger its viability at acheiving its goal–real compliance with the law.

The past agreements with Boeing as part of its management’s habitual lawbreaking (only a small part of which Boeing has been held accountable for in any way) all seem to have been victim to putting the judgment of compliance into many too few hands.

In the case of these violations, Boeing gets to hire their own auditor, as long as the choice is acceptable to that one official.

Boeing’s internal “compliance” processes implemented as C/A for the few past frauds they were caught at have proven ineffective, to say the least. A new suit by a whistleblower I will post about later shows just how badly compromised Boeing Ethics and the Boeing Office of Internal Governance tasked with these “compliance” processes are. Read this blog and www.thelastinspector.com for further evidence of these effectively fraudulent compliance measures instituted as a result of Boeing’s frauds.

Like the proverbial “horse and water” analogy, you can lead corrupt Boeing management toward compliance, however you cannot make them imbibe of it. For that to happen, you need to change out the corrupt management itself. Just a few sacrificial lambs’ heads rolling at the top as happened in the distant past will not suffice.

When it comes to lawbreaking, much of current Boeing management are just like junkies—no amount of fines will get them to quit “shooting up” on such lawbreaking that so easily maximizes the bottom line without the much harder work or real compliance and competence at doing their jobs. Their doing prison sentences would obviously be more effective, especially if managers of competence and integrity immediately were put in their vacated positions.

When will Boeing management stop taking shortcuts by violating laws and regulations in order to meet bottom line and personal stock option value goals?

Your guess is as good as mine.

But one thing is for sure—Boeing management will not undertake such minimally required reforms unless they are forced to do so by other means than mere fines that don’t come out of their own pocketbooks.

http://www.pmddtc.state.gov/compliance/ … mpany.html

BoeingDDTCChargingLetter06092008.pdf
BoeingDDTCConsentAgreement06092008.pdf
BoeingDDTCOrder06172008.pdf

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