So, Boeing…. how much fraud and corruption finally crosses over the line?

Here is a story regarding more antics of Boeing that have come into the light, thanks to a reader who stays alert for such stories. GFS

G Florence:

Straight from federal Executive Order to the Secretary of Defense, one of the federal requirements for continuing participation in the National Industrial Security Program: “The company must have a reputation for integrity and lawful conduct in its business dealings.” But then we read articles like the one below, and that’s when we realize that Boeing is bigger than the federal government.  $13.7 million dollars does not even represent a slap on the wrist to Boeing. The Old Navy Man

Boeing Told to Repay After Charging $2,286 for $10 Part

By Tony Capaccio – Jun 19, 2013 8:30 AM PT The Pentagon’s purchasing agency says Boeing Co. (BA) must refund $13.7 million in excessive prices charged on spare parts, including a $10 device for which the defense contractor charged $2,286 apiece. 

The Defense Logistics Agency “is seeking a refund from Boeing,” spokeswoman Michelle McCaskill said in an e-mailed statement. “The refund will be for the full $13.7 million identified” and will be requested by July 31, she said.  

The agency overpaid about $1.3 million for 573 of the aluminum “bearing sleeves” used on an aircraft’s main landing-gear door that should have cost $10 each, the Pentagon’s inspector general said in an audit labeled “For Official Use Only.”

Wasteful spending resulted from agency personnel failing to negotiate good deals or to perform adequate oversight, and from Boeing’s failure to pass on savings it won from subcontractors, according to the complete audit report. A summary of the findings was reported by Bloomberg News on June 7.

Boeing “has been working with the Defense Logistics Agency” and the inspector general “throughout the audit process,” Ellen Buhr, a spokeswoman for Boeing’s Global Services and Support unit, said in an e-mailed statement. “We are working with DLA to review the official report and to understand the issues identified.” 

Second Time 
The audit marks the second time in two years that the inspector general has cited excessive parts pricing by Chicago-based Boeing, the Pentagon’s second-biggest contractor after Lockheed Martin Corp. (LMT) A May 2011 inspector general’s audit of two Boeing contracts for an Army depot in Corpus Christi, Texas, found about $13 million in overcharges on $23 million in orders. 

The Pentagon has recovered $2.67 million in that case, according to Bridget Serchak, a spokeswoman for the inspector general’s office. The Defense Contract Audit Agency is reviewing the contract to see if more refunds are in order, another spokeswoman, Army Lieutenant Colonel Elizabeth Robbins, said in an e-mailed statement. 

In the more recent audit, the inspector general took what it described as a “nonstatistical sample” of 60 spare parts on 2,659 delivery orders valued at about $81.1 million and found issues involving prices for parts on 1,469 orders valued at $27.2 million.

The sample was part of almost 3,400 spare parts valued at about $142 million that the agency had purchased. 

Aircraft Parts 
The excessive prices were found on a sample of parts requested under a 2009 “basic ordering agreement” for components and assemblies used on B-1B and B-52 bombers, E-3 surveillance aircraft, KC-135 tankers, Minuteman nuclear missiles and AC-130U gunships. 

Boeing overcharged the Defense Logistics Agency’s aviation unit the $13.7 million on 1,469 delivery orders after government personnel failed to negotiate “fair and reasonable prices,” according to the inspector general’s audit. 

“If prices are not corrected, DLA Aviation will continue to overpay on future sole-source spare parts procured from Boeing,” it said.

Boeing “did not maintain complete cost and pricing data for 20 delivery orders valued at $3.4 million” because of inadequate agency oversight, the inspector general found. The company issued internal guidance in December emphasizing the need to maintain adequate documentation, it said. 

In addition, inspectors found cases in which Boeing failed to pass on savings it obtained. 

Negotiating Prices 
“Boeing either negotiated for lower prices from its suppliers or obtained spare parts at lower prices from different suppliers,” the audit found. The company “is not required to notify” the agency “when the subcontractor changes its prices, and Boeing did not pass on any cost savings.” 

In one example cited, Boeing in February 2008 cited a price of $8,474 each for a “control surface part kit” that attaches to an aircraft’s left elevator. 

Auditors obtained Boeing purchase orders indicating it paid about $4,080 for the kit, “resulting in an overpayment of approximately” $4,394 per kit — or about $1.2 million for 273 of them. 

Boeing charged the defense agency $17,628 apiece for a “channel” engine structural support on the AC-130U gunship that company documents showed cost about $1,354 each, or an overpayment of more than $16,000, according to the audit. 

The logistics agency overpaid about $22,600 for two metal tube assemblies that cover aircraft engine struts. The Defense Logistics Agency accepted as “fair and reasonable” Boeing’s proposed price of $12,467 each.

“Based on our review of Boeing’s purchase order,” the agency “should have paid a unit price of approximately $1,167,” according to the audit. 

To contact the reporter on this story: Tony Capaccio in Washington at acapaccio@bloomberg.net                                                         
To contact the editor responsible for this story: John Walcott at

Boeing Whistleblower, Gerald Eastman, considers the last decade and our present efforts to deal with Boeing corporate and government corruption.

Boeing Whistleblower, Gerald Eastman reflects on the past decade and wonders about the direction being taken by the new one, taking on Boeing and government corruption and more.  Here is a short excerpt.  You may find the complete post at The Last Inspector,  http://eastmans.site.aplus.net/pblog/index.php

“Boeing chose to jump on the Bush anti-regulation and ignore enforcing regulations bandwagon.  And, Boeing got busy early in the decade with revolving door fraud, as in the case of hiring Druyun Quid Pro Quo for fixing the first tanker contract award in Boeing’s favor.  Such revolving door shenanigans continue as employees eagerly jump from government to Boeing and back to government again, each time performing more service to Boeing such as favors in the form of information, contacts and influence, “adjusting” federal regulations to better the advantage of the company or make such regulations less in the way of opportunities for more questionable business dealings.  Combined with Boeing lobbyists and campaign contributions it is a powerful cabal that works 365 days a year to gain taxpayers dollars.”

Boeing Whistleblower, Gerald Eastman, Revisits Last Tanker Deal and Boeing Corruption

 

From The Last Inspector, Boeing Whistleblower, Gerald Eastman

 

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My Letter to the Last Tanker Procurement Team Posted–Sadly, Nothing has Changed in Boeing Management Since Then 

Tuesday, May 19, 2009, 12:11 PM
Posted by Administrator

As no reforms in Boeing management have taken place since this letter, please use it as a model for your letters to the next procurement team and your Congressional politicians. Just substitute your own experiences with Boeing management fraud for mine. The taxpayer as well as the warfighter need to be protected from such Boeing management continuing Druyun/Sears-esque fraud. Note that I advocate for a Boeing selection despite corrupt Boeing management. I feel the extra expenses to guard against Boeing management fraud are outweighed by the necessity of this program to Boeing employees and our wider industrial base. This letter was previously posted at www.thelastinspector.com

Here is an important story yesterday in the Seattle Post-Intelligencer that explains in part the corruption detailed in the letter below–the first Boeing tanker procurement scandal was never adequately investigated–no adequate investigation, no adequate reforms.

http://blog.seattlepi.com/aerospace/archives/168964.asp

February 25th, 2008

The Honorable Sue C. Payton
Assistant Secretary of the Air Force for Acquisition
1060 Air Force Pentagon, Room 4E964, AF/AQ
Washington, DC 20330-1060

Dear Assistant Secretary Payton:

This urgent letter is to inform you of matters that I have witnessed that I believe should strongly bear upon how you should go about structuring the KC-X contract and how you perform contract negotiations should The Boeing Company be selected over the Airbus/Northrop team as supplier of the KC-X Aerial Refueling Aircraft.

First, I want to make my motivations in giving you this crucial information clear: I am not trying in any way to influence you to select the Airbus/Northrop proposal for the KC-X instead of the Boeing offer. Instead, quite the opposite is true, although that is not related to this letter other than as background information. I do hope you ultimately select the Boeing RFP even considering the corruption I detail below that I witnessed that is still entrenched deeply within Boeing management following the former tanker contract debacle and other Boeing ethical and legal lapses that have been aired publicly for several years now.

My opinion as a loyal former Boeing employee and U.S. citizen that can trace my roots in this country to eighteen years after the Plymouth Colony was settled and some 138 years before our country was founded is that it is essential for the economy of our country, the preservation of aerospace manufacturing jobs in this country, and therefore the preservation of military aircraft production capacity within the United States, that Boeing is ultimately selected as the winner of the competition for the KC-X contract.

That said, I can now get to the essential crux of this letter, which is how best you and your KC-X procurement team can structure a contract should, as I hope, Boeing wins the competition, in order to protect the Air Force, Air Force personnel who will fly on and use these tanker aircraft, and the American taxpayer from the consequences of the fraud still ongoing within management at Boeing today several years after Boeing’s much self-publicized “ethics reforms.”

As a former Boeing Quality Assurance Inspector until just over a year and a half ago, when I was terminated per the direction of the highest management levels at the company for collecting information in order to bring this continuing fraud in Boeing management to light, I witnessed this management fraud in Boeing Commercial Airplanes Quality Assurance on a daily basis. Knowing not only the lives of the public were being intentionally placed at higher risk by corrupt Boeing management because of this fraud, but the lives of our brave military personnel were placed at much higher risk illegally, as well, to maximize Boeing’s bottom line, I knew I had to act to stop this brazen fraud before more lives of the public and our military that fly on Boeing Commercial Airplane platforms were inevitably lost, so I reported this rampant fraud in QA throughout BCA to the FAA in early 2002, well before the former tanker contract debacle.

By the way, this letter is in no way related to Boeing Corporate Headquarter’s retaliation against me as noted above. I knew the day I decided to try to bring Boeing’s illegal actions I witnessed to justice that I would be ultimately removed from my job by Boeing as retaliation for attempting to bring Boeing management’s fraudulent actions to an end as I knew Boeing management’s corrupt modus operandi almost better that they knew it themselves at that point, when Boeing’s “win at any cost” “ethic” was in full swing, as it had not been publicized yet.

The fraud that I witnessed and reported to the FAA in early 2002 is a fraud that sadly continues to this day, due to a relationship with the arm of the FAA that I reported it to that mirrors to some extent the bias that was unfortunately shown by a few former officials in the Air Force before those officials were removed from their posts following the reforms instituted after the 2003 tanker procurement scandal. While the Air Force, under your new leadership team’s hard work and integrity, is totally reformed now and is up to the task in performing your duties with the utmost integrity for the benefit of the taxpayer and our military you represent, the same cannot be said of the FAA and Boeing management involved in the continuing fraud I witnessed. And it is this continuing fraud that, if not noted and addressed by your team as it relates to the KC-X program, poses a grave threat to military personnel who fly on or use the services of the KC-X tanker, and an unreasonable danger to the wise use of American taxpayers’ dollars. Possible challenges to the hard won reputation of the procurement agency for the program also exist if this ongoing corruption at Boeing and the FAA is not properly addressed before a contract is signed, and is not properly mitigated during the life of the program.

The fraud I witnessed on a daily basis at Boeing is something you have likely heard of. While my coworkers and I referred to it as “rollerstamping,” this fraud does have other names in the industry, such as “hot stamping,” or perhaps its most apt description: Product Substitution.

As you well know, the safety, quality, and reliability of military as well as commercial airplane platforms that are produced must be ensured by strict adherence to inspection, testing, and other quality assurance processes. Without such processes, no matter how well intentioned the people are that do the actual construction of those aircraft and their many component parts, inevitably faulty and/or incomplete aircraft will be produced because all humans by nature make mistakes, especially on fast paced and complex tasks requiring high levels of skill, such as in aircraft manufacturing.

That basic fact is acknowledged in the modern regulations and implementing and necessarily mandatory quality assurance procedures that have been put in place over the years to ensure the safety, quality, and reliability of military and commercial aircraft is ensured, and is ensured to the high level required.

However, to Boeing and FAA management, those critical regulations and implementing procedures are only guidelines, if that.

At Boeing, inspectors are expected by management to “look the other way” rather than actually do their critical jobs of ensuring the safety and conformity of Boeing aircraft, and FAA Aviation Safety Inspectors are also similarly expected by their management to “look the other way” from their duties to enforce the FAA regulations at Boeing and to ensure Boeing is adhering to their FAA required quality system.

Is this corruption just speculation? Hardly. I, as well as many others, witnessed it, and I in fact proved it during my dealings with top Boeing and FAA management in my thusfar futile efforts to end this endemic and symbiotic Boeing/FAA fraud.

My reports of this fraud at Boeing to Boeing and FAA management did not have the desired result of reform so inspectors like me could begin to do their critical jobs without the inevitable harassment and retaliation for doing so. The FAA and Boeing chose to cover up and protect this fraud rather than investigate and end it. My refusal to ignore FAA foot dragging on investigating my report did result in corrupt FAA management having to document a few of my many reported Boeing noncompliances so as to be able to say they did an investigation, so they unwillingly corroborated several systemic noncompliances I reported. However, the major and most serious by far noncompliances the “investigation” of my report by Boeing and the FAA uncovered was in proving that the many noncompliances I reported were not just a result of low level Boeing management corruption—they were instead a result of corruption at the highest levels of FAA and Boeing management—a true “working together” corrupt relationship to ensure Boeing did not have to abide by what they saw as too expensive to comply with mandatory quality and safety ensuring regulations and procedures. What Boeing management got out of this corruption is clear as most of their compensation is tied to bottom line driven stock option prices. What the corrupt FAA management involved got out of ensuring Boeing could break regulations, in opposition to their mandated duties, other than “quid pro quo” well paying jobs at Boeing and organizations funded by Boeing is less clear, but time will tell.

Since you are busy, I will spare you the details in this letter as this letter is to only warn you of this fraud so you can take measures to protect the taxpayer and warfighter from it before it is too late to do so. The details of this fraud are on my website, www.thelastinspector.com . I strongly suggest you visit the site to find out the corroborating and disturbing details of this corrupt FAA/Boeing relationship.

As you are intimately aware of the inner workings of the aviation industry as I am, it should not surprise you then that the ethics reforms Boeing said it undertook after the first tanker contract and the Lockheed RFP data theft debacles did not “take,” and Boeing management still relies on unethical and illegal activities to enhance its bottom line. Even unethical and illegal activities that obviously place many citizen and military lives at risk.

Although Boeing has apparently been very careful to not use such unethical and illegal habits in the current tanker RFP until the contract is sewn up, that has not prevented it from engaging is such misconduct in other areas of its business—especially “safe” areas to do so, such as internally in making quality and safety assurance at Boeing one of the most corrupt organizations within Boeing, and in long fostered corrupt relationships with FAA management. The Boeing Legal department is another area where the illegal is tolerated, if not fostered. They were they department of Boeing tasked with covering up rather than ending the Boeing management corruption I reported to them on two occasions. It is no accident an internal Boeing system used by Boeing Legal is called the “elegal” system, and that one of Boeing Legal’s top attorney’s mantra was “you gotta do what you gotta do.” Rather than end the corruption I reported to them, the same Boeing Legal attorney assigned to “investigate” my report was also assigned to personally ensure I was arrested and charged with a crime for collecting data for my continuing efforts to end the noted Boeing/FAA corruption.

However this letter is not about what Boeing has done to me. It is solely to protect the taxpayer from being defrauded by Boeing as it defrauds its current customers via the ongoing product substitution abetted by corrupt management personnel in the FAA, as well as to ensure such fraud is not allowed unwittingly by your organization to place military personnel’s lives at extra risk by your organization not being informed of it.

I have read disturbing articles about the still unreformed FAA being allowed to certify 767 tankers for Japan and Italy. Such certifications are next to meaningless in the current era of FAA management corruption. This is a key area that will have to be changed should Boeing be awarded the contract.

If FAA personnel have to be used on the tanker program in any way, DCMA Quality Assurance personnel must closely supervise FAA personnel to ensure they are actually doing their critical jobs rather than mostly pretending to do them. They must perform independent audits of Boeing quality assurance as well as FAA inspections and certification work with ending and preventing the fraud reported in this letter and on my website in mind during the program. Such heightened oversight activities by the DCMA must be allowed in the contract.

Boeing will likely pursue language that FAA and FAA delegated Boeing personnel do as much of the inspection and certification work as possible in the contract. After this letter, the motivations of such language should be much more transparent. Language must be inserted in the contract to give the DCMA the authority, headcount, and budget with which to perform the much increased oversight functions that will prevent FAA/Boeing fraud on the program from being used to pump up Boeing’s profits from the program via the noted product substitution currently enabled by “quality assurance” at Boeing and the reduced certification costs lack of real FAA oversight provides.

Such real oversight by the DCMA would uncover problems in the production system hidden for years by the noted Boeing and FAA non-oversight of Boeing’s engineering and production processes. This would add additional costs to the program, but the conforming aircraft that would result would be worth those costs. Drawings and engineering specs that could never be complied with as they were in error and/or conflicting would be uncovered—never fixed because Boeing management thought it would cost too much to fix them and that such fixes were “non-value added” no matter how much the errant engineering confused those who had to try to build per those drawings/specs and how creative mechanics had to become to make what they thought the engineer might have intended. Such evidence of past Boeing and FAA carelessness will be simply more proof of the corruption I am disclosing to you now.

Although I have not been on the Boeing production line for over a year, there is no doubt the FAA/Boeing fraud proven by the handling of my reports continues to this day. I still communicate with Boeing personnel on occasion. Nothing has changed. If the noted fraud was ended by Boeing and/or the FAA, the severe bottlenecks on production programs resulting would have to be made public, and an announcement by the FAA making the public announcement of the ultimately ineffective FAA Special Technical Audit of 1999/2000 seem very insignificant by comparison would have to be done. Neither has happened to date.

As you can see on my website documenting the Boeing and FAA management corruption I and others have witnessed, “working together” fraud in Boeing and FAA management will not be the only Boeing mismanagement and fraud your team will have to be vigilant in preventing in order to protect the interests of the military and our country’s citizens during a Boeing tanker program. Boeing’s past intentional and “unintentional” mismanagement of ITAR controls is an area that will need special emphasis in preventing during a Boeing tanker program. The QRS-11 chip debacle is just one such instance of ignoring such controls that I helped ensure a fair end to for our country. Transfer of ITAR data between commercial and military programs is another area that will need to be of special concern during the program in terms of putting in place controls to prevent such actions by Boeing’s still ethically challenged management during the program, and/or to prevent Boeing management’s past demonstrated disdain for adhering to ITAR controls when more money can be made by ignoring them from affecting how such controls are used on the program.

And then there are the 787 delays and the Japan and Italy tanker delays to consider as far as how to best help Boeing management avoid a repeat of those delays during a tanker program for our government. It is my belief that it was Boeing’s focus on “leaning out” the production and certification processes and focusing on the financial planning aspects of the program rather than planning sufficiently for production of the 787 itself that has resulted in the 787 delays. Schedules planned too tightly in order to meet financial targets ultimately has resulted in the delays thusfar, I believe. Notably, one of the “bright spots” in the 787 program thusfar has been the “smoothness” of certification activities on the program and the FAA siding with Boeing over experts on some controversial certification tests performed and those chosen not to be performed as was required in past new programs. I need not, I trust, give my well informed opinion as to why the FAA has been so accommodating to Boeing’s every wish on the program, and has allowed unprecedented levels of delegation of Boeing personnel to do formerly and exclusively FAA performed certification activities on past programs on the 787 program.

I will let my website give you the rest of the details. Please do not hesitate to contact me if you have any questions for me not addressed in this letter or on my website.

Please do not penalize Boeing workers for the continuing “sins” of their management. I believe, if you heed the warnings in this letter, Boeing and FAA management’s arrogance in continuing to perform unethical and illegal activities if the personal rewards are seen to outweigh the risk can be mitigated completely so that the Air Force will avoid being defrauded and receive the product contracted for, with the required levels of quality, safety, and reliability assured. And our country and the vast majority of Boeing workers not complicit with the noted fraud will reap the benefits of such a key contract to protect our military aircraft industrial base.

I hope one day soon the noted FAA/Boeing fraud will be ended. However, until then, procurement officials like you and the DCMA will have to take actions to protect our country and military from it on programs such as the KC-X tanker program and the P-8A Poseidon program.

Please ensure these warnings are heeded and the contract language is structured to protect the Air Force and the taxpayer from the noted Boeing/FAA fraud. Please delay any contract signing until such contract language is drafted, if necessary.

And please distribute this letter to your Deputy, Lt. Gen. Donald Hoffman, John Young, and any other member of your team that you believe has a need to know this information.

Sincerely,

Gerald Eastman

cc: The Honorable Patty Murray
United States Senate
173 Russell Senate Office Building
Washington, DC 20510
202-224-0238

cc: The Honorable Maria Cantwell
717 Hart Senate Office Building
Washington, DC 20510
202-228-0514 fax

ICO Prevails Against Boeing: Justice at Last

This has been a long and ugly struggle.  Good to know that the whistleblowers involved are finally vindicated, although terrorized, if they still work for Boeing. 

 

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L.A. Court Reaches Final Judgement Amount in Boeing, ICO Case

 

March 3, 2009

[Satellite Today 03-03-09] A Los Angeles Superior Court overseeing litigation by ICO Global Communications against Boeing Co. and its satellite subsidiary has denied nearly all of Boeing’s post-trial motions, ICO announced Mar. 2. 

    The court’s final rulings denied six of seven Boeing motions and granted one motion regarding pricing fraud, reducing the judgment amount of $631 million, previously entered against Boeing in January, by approximately $28 million. As a result of the rulings, a judgment amount of $603 million is now final. 

    The rulings complete a trial court process that began in 2004. In October, a Los Angeles Superior Court jury ruled that Boeing had breached its contract with ICO and engaged in fraud, and that Boeing had tortiously interfered with ICO’s contract. The jury further found that in dealing with ICO, Boeing acted with malice, oppression or fraud. The verdicts totaled $371 million in compensatory damages and $236 million in punitive damages. 

    “If Boeing appeals and posts the nearly $1 billion bond necessary to prevent immediate efforts to collect the judgment, we will continue to vigorously pursue ICO’s rights. In the meantime, post-judgment interest will accrue on the judgment in the amount of 10 percent, over $60 million, per year,” said John Flynn, executive vice president and general counsel for ICO, in a statement. 

The Winding Path of Boeing Whistleblower, Gerald Eastman, Continues

Thursday, July 10, the Boeing Company had charges of computer trespass against former employee and Boeing Whistleblower, Gerald Eastman reduced and agreed that the charges will be dismissed entirely if Mr. Eastman agrees to tell Boeing about what data he took from the company’s computers.  The Boeing Company has had Eastman’s computers for over a year, now, and surely has taken apart every document, including Eastman’s private information by now.  Eastman is to be held to an agreement to follow a certain set of requirements by the Boeing Company with the threat of prison, as decided by a judge without a trial or jury, if Boeing deems Eastman has in any way violated the agreement until late January of 2009.  -GFS

 

See Seattle PI original article “Felony charges reduced for ex-Boeing employee” at: http://seattlepi.nwsource.com/printer2/index.asp?ploc=t&refer=http://seattlepi.nwsource.com/business/370310_eastman11.html

 

Thursday, July 10, 2008 the King County Prosecutor’s Office announced it would not retry Boeing Whistleblower, Gerald Eastman.  They further said that Eastman has agreed to help Boeing recovers information that he leaked to the media and that if he does not “live up to the agreement” a judge can find him guilty of 10 misdemeanor counts of computer trespass, and he could face years in prison. 

 

Eastman’s attorney stated that Eastman’s jury at the first trial which resulted in a mistrial, “was faced with a ‘vague statute’ that does not specifically say it is a crime for an employee to access information that an employer doesn’t want him to have.  Given the facts of the case, she said, the jury’s failure to reach a verdict was not surprising and showed that the panel had paid close attention during the trial.”

 

The jury had asked numerous questions of the judge regarding consideration of Eastman’s whistleblower status and whistleblower laws, and was frustrated by the judge’s and King County Prosecutor’s office successful attempt to prevent any consideration of those facts in the trial proceedings.  The trial resulted in a hung jury as some of the jurors refused to be pushed to a conviction considering the facts and King County’s management of the case.  A mistrial was declared and the jurors told the judge and King County that the case should not be retried.  -GFS

 

 

See the Seattle Times original article “Ex-Boeing worker will not face new trial for leaking files” at:

 

http://seattletimes.nwsource.com/cgi-bin/PrintStory.pl?document_id=2008044404&zsection_id=2003925728&slug=webeastman10m&date=20080710

 

 

 

Friday, July 11, Boeing Whistleblower, Gerald Eastman, agreed to a settlement with his former employer, the Boeing Company, regarding the company’s prosecution of him regarding “leaked company documents.”  Eastman has agreed he will try to get leaked company documents back from the Seattle Times, PI and any other place they were released.  In return, Eastman will not face retrial, and after six months, if Boeing feels he has cooperated and not violated the terms of the agreement, the case against Eastman will be dismissed.  If Boeing complains that he has violated the agreement, a judge may then find him guilty of at least 10 misdemeanor counts, each with a penalty of up to a year in jail.  –GFS

 

See the Seattle Times original article “Whistle-blower settles case” at:

 

http://seattletimes.nwsource.com/cgi-bin/PrintStory.pl?document_id=2008046014&zsection_id=2003925728&slug=eastman11m0&date=20080711

 

 

 

 

 

 

 

Why One Boeing Whistleblower is Important

Why One Whistleblower is Important to the Safety, Security and Economic Welfare of All

 

 

The story of Boeing Whistleblower, Gerald Eastman, is a compelling one, the outcome of which will have far reaching effects on both employees of industry as well as government.  In observing Mr. Eastman’s struggle, I see we have reached a significant turning point.  Either we will achieve more transparency in our business (and government) operations or we will submerge into the swamp that is now business and contracting in America.   I have become aware of Mr. Eastman’s Boeing Whistleblower case, via my interest in whistleblower issues.  I have his permission to send out his first press release and website address in order to better publicize his experiences as a legitimate whistleblower caught up in a most unpleasant relationship with his former employer. 

 

His case is singularly important as unlike many, he chose to stand up to his company about the fraud he saw happening on the line at Boeing in Seattle, Washington.  Mr. Eastman was a Quality Assurance Inspector and oversaw the assembly line for airliners.   Thinking it was just a few corrupt and irresponsible low level supervisors, he began an odyssey which led him through each level of the Boeing Company to the very highest levels of management, finding anger, corruption, avoidance, cowardice, and retribution against himself, for daring to not shut up and look the other way, all the way to the top of his corporate structure.  After exhausting all internal paths for addressing the problems he then went to the oversight authorities in the U.S. government whose job it is to inspect and oversee the safety and integrity of manufacturing and found they were similarly corrupted and impotent.  His former employer, the Boeing Company has done their best with every kind of retribution imaginable, to destroy Mr. Eastman.  In spite of this Mr. Eastman believing that the fraud and the safety risks the fraud represented to the American public, military and anyone else who would fly on Boeing airplanes, continued to try to get the problems honestly addressed and resolved.  Mr. Eastman was fired from Boeing, was essentially blacklisted in his field due to Boeing’s influence, and when he finally did get another job, was fired from that job as well, ostensibly because the small company he worked for had a large customer (ostensibly Boeing) who was not happy with him being employed there.  He has lost the integrity of his family, and much else has been permanently and negatively changed in his personal life.  It has been a devastating experience.   I hope that there will be more media and Internet attention to his story and more of you will present it to your readers.   The public should know what is going on around them and see how destructive this kind of greed and corruption is to all of us.   

 

The truth is that Boeing has a lot to lose.  The situation is doubly interesting due to the settlement agreement the U.S. Government maintains with Boeing from the end of the Darleen Druyun/Michael Sears/Original Tanker Deal.  In order not to lose the ability to bid on more contracts Boeing had to promise to keep themselves clean and ethical.  The current issue is that they have not been doing that.  There are in addition to Mr. Eastman’s situation, several whistleblower cases and even criminal investigations ongoing at the current time against Boeing.  These cases have been slowed, thwarted, and corrupted or crippled; oversight agencies including the Justice department itself, (think federal prosecutors) have been totally dysfunctional in many cases, leaving these cases open, but not going anywhere, and poised to wait for the applicable statute of limitations to run out. This is the functional (or dysfunctional) state of things under the current administration.  Those who are a part of the corruption, or are under the control of the corrupted officials, which I am told go all the way to the top of our government, continue to try to keep any of these cases from being investigated, and if that is not successful, from being prosecuted.  Unfortunately, at the current time, they are quite successful in that effort. 

 

Mr. Eastman’s case however has reached a fevered pitch as Boeing, frustrated they could not shut him up by destroying his life, has tried to deny he is a whistleblower, used their economic and political power to control things and seek high stakes retribution.  It appears that Boeing has managed to corrupt the King County Prosecutor’s office and Justice (judges and attorneys) as well.  Only the jury refused to go along with Boeing’s planned execution.  The first trial ended in a hung jury, as several jurors could see what was happening, and seemed to be frustrated with the judge not allowing them to fully consider all appropriate elements of the case, such as Mr. Eastman’s whistleblower status and current whistleblower law.  To the credit of American jurors, many do not like to be herded to a predetermined end by the prosecutor or judge.  The jury also advised the court that they felt the case should not be retried.  Boeing, on a roll applying the bully tactic, has since tried to force Mr. Eastman into an out of court “deal” which he has detailed on his website in his Press Release, while threatening to prosecute him again in a second trial, and more recently threatening to move the trial to the federal level, even naming the U.S. attorney, who is interested in taking it on, which flies in the face of any logic, considering the facts of the alleged case, and the well known state of Justice in the U.S. Attorney General’s office.

 

The truth about campaign contributions from the Boeing Company to politicians in Congress is important, but so is their ample contributing to campaigns or other convenient causes in local jurisdictions where they have business presence, such as in prosecutor’s offices or police agencies.  The Boeing Company has used all of these efforts well to garner power – much too much power.  They have used that power to prosecute, or more accurately, railroad Mr. Eastman criminally for his efforts to stop the fraud he saw occurring while working at Boeing.  Like some other companies I’ve read of just recently, Boeing appears to hope that by trying to criminalize him, they will evade accountability on his whistleblower charges against the company.  And, they hope to punish him severely, putting him away and silencing him, as well as using him as a terrifying example to the rest of their employees, to derail anyone else from even thinking about reporting fraud or other criminal activities.

 

The travesty that has been witnessed in Seattle, masquerading as justice, needs to be exposed.  I hope you will be able to help make that happen. 

 

You will find his press release at his website:

http://www.thelastinspector.com You may also contact him at that site. 

 

Please do what you can to help bring this kind of corruption into the light; it is the right thing to do.

 

-GFS

Boeing Fined for Violating Acquisitions Value Limits

Boeing Agrees to Pay $3 Million Fine for Violating Foreign Parts Acquisitions Value Limits

 

As reported in Chicago, Boeing was found to have exceeded value limits on purchases of parts from foreign suppliers for it’s military products.  The laws violated by Boeing were manufacturing license agreements which are required under the federal regulations which govern international arms sales.

 

Boeing has agreed to “work closely” with the State Department to “tighten its procedures” and also has agreed to “report its progress” to the State Department over the next three years. 

 

The suppliers Boeing was dealing with when it committed these violations were in Australia, the United Kingdom, Canada, Israel, Italy, Japan, the Netherlands, Switzerland, and Austria.

 

Link to story in the Seattle P.I.:  http://seattlepi.nwsource.com/local/6420ap_il_boeing_fine.html