Michael Sears' Testimony Could Widen DOD Probes

Boeing's former chief financial officer, Mike Spears, pleaded guilty Monday to charges that he deceived the government when he offered a job to Air Force negotiator Darleen Druyun as she oversaw contract talks aimed at replacing the military's aging tanker fleet.

Druyun is already behind bars, sentenced in October to nine months for her part in the scandal. Sears, who's now free on bond, faces up to five years in prison and a $250,000 fine.

Federal prosecutors used information from Druyun to press their case against Sears (right), who was once considered a candidate for the top job at Boeing. When she made a plea deal with them Druyun admitted to prosecutors that she supplied Boeing proprietary pricing information from Boeing's archrival Airbus and its parent company, EADS.

The scandal, one of several ethical issues Boeing has faced in the past year, prompted CEO Harry Stonecipher to call for an internal audit of the company's business practices. Led by former US Senator Warren Rudman, the review found no other instances of the sort of improper hiring that landed Druyun in the executive suite. Boeing has created an office of internal governance to avoid such scandals in the future.

Boeing Statement

Boeing Senior Vice President and General Counsel Doug Bain issued the following statement today after federal prosecutors released details in the case against Sears:

"Today’s action brings this matter one step closer to closure. The Boeing Company will continue to provide any information requested in the ongoing review of Druyun-related procurements and to take appropriate action to finally resolve this matter.

"We believe the Statement of Facts reinforces what we have said before – that no Boeing executive other than Mr. Sears engaged in any wrongdoing in connection with Ms. Druyun’s hiring. Boeing officials believed that Mr. Sears and Ms. Druyun were fully complying with all appropriate Boeing and DOD procedures in his recruitment efforts.

"One year ago, Boeing dismissed Mr. Sears and Ms. Druyun (below) because an internal investigation concluded they had violated Boeing hiring policies and ethical standards. Boeing immediately brought the matter to the attention of the appropriate authorities and cooperated with them throughout the investigative process.

"In addition to dismissing Mr. Sears and Ms. Druyun last year, the company commissioned an independent external review of its hiring practices, which determined that Boeing had in place well established policies and procedures. Nevertheless, the Company has adopted recommendations from that review and strengthened its policies in this area, including establishing an Office of Internal Governance reporting directly to the CEO.

"Today, every employee of The Boeing Company – at every level – understands that integrity and ethics are the foundation of our business, and we have both the will and the process to ensure accountability for any violation."

FMI: www.boeing.com