More Than "A Few Individuals"
A recently-revealed USAF memo accuses Boeing of using a
competitor's proprietary information not once -- but twice -- in
hopes of winning a contract from the Pentagon. In one case, the
aerospace giant succeeded for a short time. In the other, Boeing
withdrew from the bidding after the anomaly came to light.
In one case, Boeing won a launch contract with the Air Force.
Only later did it emerge that Boeing had thousands
of Lockheed-Martin documents as ammunition in formulating the
winning bid.
The memo also shows the Air Force considered suspending Boeing
back in 1999, in the midst of a missile defense contract in which
the company was bidding against Raytheon. In that case, Boeing
withdrew from the competition before a bid was awarded, leaving
Raytheon to win it by default.
"Boeing's misuse of a competitor's proprietary documents by a
Boeing 'capture team' is not unique to the (rocket launch)
program," wrote the memo's author, USAF Deputy Consul General
Stephen A. Shaw. The USAF memo was dated July 24, 2003.
Lockheed-Martin is now suing Boeing in Orlando (FL) federal
court, accusing the Chicago-based aerospace company of using the
stolen documents to win the 1998 EELV contract from the Air Force.
The contract was worth $1.88 billion, according to court
documents.
At the time of the Lockheed
documents scandal, Boeing's then-CEO Phil Condit said the entire
company had been tarnished by "a few individuals." Two Boeing
managers were slapped with criminal charges in the wake of the
stolen document affair and Condit himself later resigned.
"The ethics at Boeing have been reviewed and Boeing has enhanced
its ethics policies," said Boeing spokesman Dan Beck, who hadn't
yet seen the memo. "We have implemented reforms and (are) taking to
heart independent reviews of Boeing ethics. We are looking to
restore confidence."
But more on that may soon unfold. The Air Force memo says, when
Kenneth Branch left Lockheed for Boeing in 1997, he carted off
thousands of Lockheed documents along with his picture of Mom and
his other office belongings. The memo says he then gave them to
William Erskine, Larry Satchell and another, unnamed Boeing
manager. The Air Force alleges Erskine had been told to win the
contract in question -- the Evolved Expendable Launch Vehicle
contract -- "at all costs."
So Satchell went to work, according to the memo, leading
Boeing's "capture team." He and his employees were on the lookout
for former Lockheed personnel, looking for information about
Lockheed's bid.
The memo specifically accuses Erskine, who himself faces federal
criminal charges, of hiring Branch on the condition that he turn
over the Lockheed documents. "Boeing's ability to bid prices for
the launch services that were lower than the prices proposed by
(Lockheed Martin) may have been influenced by Boeing's use of the
... documents and information improperly provided to Boeing by
Branch," according to the memo.
The conspiracy appears to have
spread when Boeing lawyer Mark Rabe was told of the stolen
documents by another employee. In June, 1999, Rabe told the Air
Force and Lockheed that two Lockheed documents had been found at
Boeing -- even though the USAF now says he knew there were more.
Lots more.
"The information that Boeing provided to (Lockheed) was false
and misleading," said Shaw's memo.
Rabe reportedly discovered six more boxes of documents in
Branch's office. He found two more in the company's library. Yet,
Rabe didn't disclose the discovery to the Air Force or Lockheed
until April of last year.
"At the time of this representation, Boeing knew that it
possessed eight additional boxes," Shaw wrote.
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