Monday, November 24, 2003 · Last updated 9:13 a.m. PT Boeing fires execs for unethical conduct
By DAVE CARPENTER AP BUSINESS WRITER CHICAGO -- Boeing Co. fired its chief financial officer Monday for negotiating the hiring of a missile defense expert while she worked for the U.S. government and was in a position to influence Boeing contracts. The former Air Force official, Darleen Druyun, also was fired - 10 months after she was hired as vice president and deputy general manager of Boeing's Missile Defense Systems business. Mike Sears, a 33-year veteran of the company who had been Boeing's finance chief for 3 1/2 years, had been considered a candidate to eventually succeed chairman and CEO Phil Condit. Both executives tried to cover up their misconduct, which is being investigated by the government, Boeing said. "Compelling evidence of this misconduct by Mr. Sears and Ms. Druyun came to light over the last two weeks," Condit said in a news release. "Upon review of the facts, our board of directors determined that immediate dismissal of both individuals for cause was the appropriate course of action." The sudden dismissals follow months of controversy over a plan for the Air Force to acquire 100 Boeing 767 planes for use as midair refueling tankers. The Pentagon launched a formal investigation this fall into allegations that Druyun acted improperly in giving Boeing financial information about a competing bid on the multibillion-dollar lease deal. President Bush on Monday signed the defense authorization bill that included approval of a compromise tanker deal, lowering the initial $21 billion price by $3 billion to $5 billion. Documents disclosed by the government revealed that Druyun, then the principal deputy assistant Air Force secretary for acquisition and management, told Boeing that rival Airbus had submitted a bid $5 million to $17 million less per plane than Boeing's offer. Druyun joined Boeing nine months later. But Boeing, which has denied wrongdoing in the competition for the tanker contract, insisted the dismissals resulted from an internal investigation and had nothing to do with circumstances surrounding the leasing plan. "It really had nothing to do with the tankers," spokesman John Dern said. "There's no indication we got any favorable treatment." Boeing said it had informed the Air Force of the actions and will continue to cooperate with the government in its investigation. Condit said the action "reflects in no way on the financial condition of the company, which remains excellent." The federal investigation is the second this year into Boeing efforts to land lucrative Defense Department contracts. In July, the Air Force ruled that the company broke the law by using records from rival Lockheed Martin to help win rocket contracts. It took away seven military satellite launches that were to use Boeing rockets and indefinitely banned the company from bidding on future satellite-launching contracts. Boeing took unspecified personnel action against six employees in September in connection with that case. Sears was named to Boeing's top financial post in May 2000 after previously heading its defense unit and also serving in the commercial aircraft and space divisions. The aerospace giant named James Bell acting chief financial officer. He had been serving as senior vice president of finance and corporate controller. Boeing shares fell 48 cents to $38.38 in morning trading on the New York Stock Exchange.
