WASHINGTON – A former chief financial officer for Boeing Co. pleaded guilty Monday to a conflict-of-interest charge, admitting that he negotiated the company’s hiring of an Air Force official who was overseeing military contracts involving the aerospace firm.
Michael M. Sears, 57, entered his plea to “aiding and abetting acts affecting a personal financial interest” in U.S. District Court in Alexandria, Va. He faces up to five years in prison when he is sentenced on Jan. 21.
Sears, who was fired as Boeing’s chief financial officer in November 2003, acknowledged that he orchestrated the hiring of former high-ranking Air Force procurement official Darleen Druyun. She became vice president in charge of Boeing’s missile defense systems in January 2003, shortly after retiring from the Air Force.
The guilty plea was another step in the continuing federal probe of conflict-of-interest involving the Chicago-based aerospace giant. Already, the case is the highest-profile defense procurement scandal since the Operation Ill Wind investigation, which resulted in more than 60 convictions starting in the late 1980s.
Sears began talking to Druyun about a job at Boeing while she still worked at the Air Force, according to court documents. Sears used Druyun’s daughter, who also worked at Boeing, as an intermediary.
At the time, Druyun was overseeing Boeing contracts, including a controversial multi-billion dollar tanker deal between the company and the Air Force.
Sears then negotiated the terms of Druyun’s employment at Boeing when the two met at the Orlando Airport on Oct. 17, 2002, court documents said. A statement that Sears signed says that Sears and Druyun covered up their actions when Boeing began an internal investigation of Druyun’s hiring.
Druyun earlier pleaded guilty to conspiracy, admitting that she negotiated the Boeing job, with her daughter’s help, while still overseeing the $23 billion tanker deal. Last month, she was sentenced to nine months in prison after admitting that she had initially lied to prosecutors about the extent of her deceptions.
At her sentencing, Druyun, 56, admitted that she had approved excessive prices on contracts awarded to Boeing to enhance her job prospects with the company. Among other things, she said she had committed the Air Force to buying 100 airplanes from Boeing at an inflated price of about $20 billion as a “parting gift” before her Pentagon retirement. And Druyun also admitted to slipping Boeing proprietary pricing information from a rival European bidder on the aircraft contract
In the Sears case, court documents said that Sears told other senior Boeing officials about his employment negotiations with Druyun and even requested that the matter be placed on the agenda for an Oct. 8. 2002 meeting of the Boeing Strategy Council, a group of the company’s most senior executives.
But in a statement, Boeing said that the court documents reinforce “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.”
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