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Boeing Settles U.S. Government Lawsuit
Boeing Co. has agreed to pay the U.S. government $615 million to settle charges of ethical misconduct surrounding the U.S. Air Force’s Evolved Expendable Launch Vehicle 9 (EELV) competition and the attempted hiring of a former Air Force acquisition official, the company and the U.S. Department of Justice announced May 15. Boeing will not admit wrongdoing under the agreement, though the company will pay $565 million to resolve potential civil claims and a $50 million monetary penalty.
Boeing was under investigation for recruiting former Air Force official Darleen Druyun while she was still overseeing contracts involving prospective Boeing deals, as well as for obtaining thousands of pages of documents from rival Lockheed Martin Corp. during the competition to develop a next-generation launch vehicle.
The U.S. Department of Defense awarded contracts to both companies to develop separate rocket families under the EELV program, though Boeing won the lion’s share of the first batch of 19 launch contracts. The government later stripped Boeing of about $1 billion worth of launches for its improper use of the Lockheed documents. Boeing and Lockheed Martin now are awaiting government approval to combine their respective government launch operations under a single entity dubbed the United Launch Alliance.
“The tentative agreement between Boeing and the United States Attorneys’ Offices provides that those offices will not seek any criminal charges against Boeing relating to the EELV, NASA and Druyun matters,” Tasia Scolinos, director of public affairs for the Department of Justice, said in a statement. “Boeing has agreed to accept responsibility for the conduct of its employees in these matters, pay a monetary penalty of $50 million, continue its cooperation with federal investigators, and maintain an effective ethics and compliance program, with particular attention to the hiring of former government officials and the handling of competitor information.”
Boeing may still be prosecuted or face a further penalty of up to $10 million if any executive commits a federal crime, and the company fails to report the incident, during the two-year terms of the settlement, which Doug Bain, Boeing senior vice president, Law, and Scolinos said is expected to be signed “in the next few weeks.”
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