Kudos to Northrop Grumman Shipbuilding for setting an example for how seriously and appropriately to handle inspectors who rollerstamp inspections without actually doing the inspections.

An inspector was turned in by another inspector for such rollerstamping of weld inspections off on military ships, including extra-critical SUBSAFE welds on submarines. Contrary to the way such fraud is handled at Boeing on commercial and military aircraft platforms based on Boeing commercial aircraft, Northrop Grumman immediately launched a real investigation (as opposed to intentionally ineffective Boeing ethics/Legal/OIG investigations) into the inspector's fraud, including re-inspection of every weld the inspector had rollerstamped off as being done and OK when they were never actually done.

They disclosed the fraud to the government, fired the inspector, and otherwise handled the incident completely appropriately--in direct opposition to how Boeing handled my report of massive rollerstamping at Boeing to Boeing's Chief Counsel at Boeing's Chicago Headquarters.

Northrop Grumman is obviously a company that takes integrity and its responsibilities to protect our brave military personnel's lives seriously.

Too bad Boeing has no such integrity, as demonstrated by how they intentionally mishandled the report I submitted to their Chief Counsel in the good faith that it would be actually be investigated and the fraud documented within it ended, and how they retaliated against the inspector who reported the fraud to them--me. Contrary to such Boeing modus operandi, Northrop Grumman investigated and ended the fraud one of its inspectors reported to them--they didn't do as Boeing did--"killing the messenger," then continuing the fraud.

Nice to know there are companies of integrity out there that take their responsibilities to the warfighter and the public seriously. Perhaps their management's integrity will be rewarded as it should be--with more business for their company.

As much as I love the hypothetical concept of an uncorrupted Boeing and the many non-addled employees that work there, feeding the the cancer of corrupt Boeing management cannot be justified, especially when there are companies out there with managements of integrity that want the work. Such a company could hire the good Boeing workers over if they are given the contracts instead, leaving corrupt Boeing management and their sycophants in corruption to whither and go away. That may be the only way to stem such Boeing management corruption at this point--a managment that has demonstrated that it will not "let go" of the company until it has died as a consequence of their corruption and incompetence.

But, Boeing's Chief Counsel's actions to cover up the fraud documented in my report and to instead show up at my workplace to personally direct the retaliation against me is understandable, if you think like a criminal would.

The inspection fraud at Boeing was an intentional creation of corrupt Boeing management to take shortcuts and increase profitability and efficiency at the expense of passenger, crew, and military personnel safety, whereas, at Northrop Grumman, it was one rogue inspector.

Rollerstamping inspectors at Boeing are par for the course, as that is what Boeing management wants them to do. Been there, witnessed/experienced what happens to inspectors who refuse to rollerstamp at the direction and expectation of corrupt Boeing management.

So, if Boeing's Chief Counsel had actually decided to investigate as Northrop Grumman did instead of covering it up, the investigation would have implicated many levels of Boeing management that had directed the fraud--not just a few rogue inspectors.

Because rollerstamping has for so long been a part of the business plan, ending it would have had 1997 style implications for Boeing's production lines, and obviously, it was much easier for them to retaliate against this whistlblower than ending the fraud and implicating themselves in the process.

Doing so would have also threatened Boeing's corrupt relationship with FAA management it has cultivated for years, making Boeing actually have to certify its aircraft were safe, rather than just going through the motions with complicit FAA management. Boeing's undeserved delegations by corrupt FAA management would also have ended, ominously for the 787, which is already two years late.

I am proud that I have dealt with Northrop Grumman, both on the B-2 program where I worked for them through Boeing's subcontract, and via my warning their CEO, Ronald D. Sugar, of Boeing's theft of their B-2 technology for use in their commercial programs in a letter I faxed to him on 12-14-06.

Working for a corrupt companies' management, as I did for many years at Boeing, makes you envious of the employees who work for the uncorrupted companies out there, like Northrop Grumman, whose management ensures a quality system of integrity no matter what the cost, whereas corrupt Boeing management and its Chief Counsel ensure the opposite, precisely to save costs and increase efficiency by consciously engaging in such fraud, on a truly massive scale.

Obviously, in Boeing management's twisted thinking, a few rollerstamped required inspections make a little money, and massive amounts of rollerstamping will therefore make massive amounts of money.

Thankfully for the warfighter, that is not Northrop Grumman management's philosophy.

What follows is the article about the rogue inspector, and how a truly ethical company handles rollerstamping reported to it (of course, Boeing management already knew of the rollerstamping I reported to it, as it was done at their direction):

http://www.militarytimes.com/news/2009/ ... s_060109w/

Weld inspector’s lies may affect 9 ships

By Christopher P. Cavas - Staff writer
Posted : Monday Jun 1, 2009 16:48:42 EDT

More than 10,000 welded joints on at least eight submarines and a new aircraft carrier might need to be reinspected after the discovery by Northrop Grumman Shipbuilding that one of its inspectors had falsified inspection reports.

According to an internal report obtained by Navy Times, the issue came to light May 14, when a welding inspector at the company’s Newport News, Va., shipyard told a supervisor that a fellow inspector was initialing welds as “OK” without performing the inspections. Confronted by the supervisor, the offending inspector admitted to falsifying three weld inspections, all that same day.

Company officials rapidly began an internal investigation and notified the Navy’s supervisor of shipbuilding of the situation, according to the report. On May 20, the Naval Criminal Investigative Service began its own investigation.

Northrop Grumman declined to reveal the employee’s name, citing the ongoing personnel investigation. A company official did say May 28 that the employee initially had been suspended, then fired.

According to the report, a quick company review of the inspector’s work showed that 12 other joints inspected by the employee that evening were satisfactory. But the ramifications of the falsified inspections rapidly grew beyond a single night’s work.

“We have to go back and check everything this guy has ever touched,” said one industrial source.

The employee had been certified to perform inspections in June 2005 and, according to the report, a review of the shipyard’s welding database showed that in the ensuing four years he inspected and signed off on more than 10,000 structural welding joints on at least nine ships.

Company officials said May 27 that the investigation of the employee’s work could mean that all the joints would need reinspection or re-evaluation.

3 ships in service
According to the report, the ships worked on by the inspector included the Virginia-class nuclear attack submarines North Carolina, New Hampshire, New Mexico, Missouri, California, Mississippi, Minnesota and John Warner, and the aircraft carrier George H.W. Bush. Bush, North Carolina and New Hampshire are in service; the other subs are in various states of construction at Newport News and at the General Dynamics shipyards in Groton, Conn., and Quonset, R.I.

The two shipbuilders share equally in building the submarines. Each shipyard builds specific sections of the submarines and transports the sections to the other yard. The shipbuilders alternate in assembling the hulls.

The inspector performed most of his work on the New Mexico (2,133 welds inspected), Missouri (3,169), California (2,002) and Mississippi (2,177). The employee inspected only 23 welds on New Hampshire and two on North Carolina.

A little more than 10 percent of the submarine welds were hull integrity, or SUBSAFE, joints involving critical parts.

The inspector also performed 229 piping joint inspections on submarines.

There are many thousands of welds on each 7,800-ton submarine — more then 300,000, according to an Electric Boat Best Manufacturing Practices Web site.

But making sure that welding work is done correctly can be a matter of life and death.

“People take this really, really seriously,” said one industry source. “Why? Because people don’t want another Thresher. Nobody takes a chance.”

The submarine Thresher sank in April 1963 when it was forced to dive below its crush depth and the hull imploded. All 129 men aboard the sub perished.

“The quality of our work is something we take very seriously,” Northrop spokeswoman Margaret Mitchell-Jones said in a May 28 statement to Navy Times.

Previous problems
Newport News is still smarting from a welding filler issue that arose in fall 2007. Shipyard workers had used the wrong type of welding filler material on many pipe welds, and the company and the Navy were forced to re-examine a number of submarines, aircraft carriers and surface ships built or repaired at the shipyard. Northrop changed a number of workshop practices as a result.

Both the Navy and Northrop Grumman emphasize that there is no relation between the weld filler issue and the latest problem with the inspector.

Northrop Grumman has developed an inspection plan of the offending inspector’s work that will focus on hull integrity and SUBSAFE joints as a priority, followed by non-SUBSAFE joints, according to the internal report.

The nature of the NCIS investigation is unclear.

“I can confirm that NCIS is investigating allegations made against a weld inspector, but I cannot get into case specifics,” NCIS spokesman Ed Buice wrote in a May 28 e-mail to Navy Times. “NCIS does not comment on the details of ongoing investigations.”

From the Seattle Post-Intelligencer, which, thanks to intrepid reporter Andrea James, has made a special effort in tracking the numerous whistleblower lawsuits against Boeing (My comments are in parenthesis within the article text):

http://blog.seattlepi.com/aerospace/archives/168657.asp

An attorney who worked in Boeing's ethics policing division says that he was demoted to being an administrative assistant and then fired after raising concerns about violation of government regulations.

Joseph Sicilia, who lives in Spokane, filed a lawsuit against The Boeing Co. with the King County Superior Court in April. (Sicilia is wise to ask for a jury trial—finding an honest judge in King County Superior Court would be a crap shoot, indeed. Sicilia's attorney will still have to be on guard for any adverse rulings on Boeing's behalf during trial, as there is still much a biased judge can do to derail justice in even a jury trial, as I witnessed happen during my trial) A Boeing spokesman said Wednesday that the case has no merit. (That statement from Boeing’s spokesman can be taken at face value, if you adjust for the many past other similarly false Boeing announcements and take the opposite of what they state here as the truth—in other words, the case does have merit. Of course, Boeing said that ICO Global’s lawsuit against them had no merit, and look how that turned out: http://www.thestreet.com/story/10456478 ... mages.html )

Sicilia worked for Boeing from 2001 until his firing in November 2007. For most of his time at Boeing, Sicilia worked in the Office of Internal Governance, which is the company's ethics department based at Chicago headquarters. He reported to supervisors in Seattle, the complaint says. (This is what is so damning about his complaint—it documents in detail wrongdoing at Boeing headquarters in the Office of Internal Governance—the last department of Boeing that should be corrupted. The suit documents just how Boeing's compliance with laws and regulations promises after being caught committing serious frauds against our government were just empty promises, and that explains in part why Boeing management continues to willfully engage in fraud to enhance the bottom line up until the present moment. Sicilia wanted Boeing's compliance promises to be born out in actual compliance, whereas his OIG management obviously did not. When complaints of unethical conduct and fraud are ignored within the very department that is tasked with investigating such complaints-Boeing's OIG-that indicts the entire ethics complaint system it oversees, rightly.)

One of Sicilia's responsibilities was to ensure that Boeing complied with promises it had made to the federal government to maintain its ability to bid on government contracts. In 2005, Sicilia perceived that certain policies enacted by his supervisor "would result in the misrepresentation of compliance, thus equating to fraud," the complaint says. (Fraud at Boeing? Does a bear shit in the woods? Sicilia was doomed from the start in that he obviously had integrity and worked in “compliance assurance” activities at Boeing. Integrity in such a position is the last thing you would want to have if your only goal was to stay employed at Boeing. In my experience (and obviously many other’s), the appearance of compliance is the only thing Boeing management wants—real compliance would be far too expensive and prevent the company from engaging in business practices that would give it an edge over its more honest competitor’s management. I know. My job was to ensure compliance of Boeing’s safety critical products to quality, safety, and reliability requirements. However, my management directed me to rollerstamp the inspections (stamp them off on the documentation rather than actually doing them) required to ensure such compliance—thereby only giving the appearance of compliance with those critical requirements for the safety of Boeing aircraft.)

Later on, other program changes made within Boeing further reduced corporate compliance with federal acquisition regulations, Sicilia believed. He reported his concerns up the management chain several times, but the lawsuit states that his complaints were never investigated. (The OIG and Boeing Ethics in my experience only superficially investigate such reports, if that. The chance of a real investigation are much worse the more serious the allegations are for Boeing management’s continuance of the particular scheme the report covers.)

Sicilia charges that Boeing managers began to retaliate against him in several ways, including denying travel requests necessary to perform his duties, verbal abuse, pointing him to other job openings and giving him poor work evaluations. (I was pointed to other job openings as well. When the company wants to fire you for being too ethical and/or for whistleblowing on their fraud, and you are an hourly person represented by a union, they will try to get you to transfer into a salaried unrepresented job where it is much easier for them to wrongly terminate you. My Boeing supervisor tried to do that to me in 2005.)
After returning from a three-month medical leave in April 2007, he'd lost his position in compliance and "was ultimately given a position (as) an administrative assistant in the Corporate Secretary's office." (Interesting, I had to take a three month leave as well, apparently for an eerily similar reason--the stress from harassment and retaliation by Boeing management for doing the right thing--in my case, the stress from the harassment and retaliation I was under for doing my job as an inspector and for reporting Boeing QA management fraud to the FAA.)

The lawsuit alleges wrongful discharge in violation of public policy, and charges that Boeing violated the Washington Law Against Discrimination, the Washington State Family Leave Act, the Illinois Whistleblower Act, the Family and Medical Leave Act of 1993, and the anti-retaliation provisions of the False Claims Act. Sicilia asks for compensation for damages, back pay and future economic loss.
Boeing has not yet filed a response to the court. (The Boeing response would be interesting, if it actually contained the true facts and not just the Boeing Legal pro-forma “we deny each and every allegation” garbage.)

"Boeing's got a strong compliance monitoring system and effective mechanisms for reporting potential wrongdoing," Boeing spokesman Chaz Bickers said." (If God struck people dead instantly for lying, this spokesman would be a goner for making such a statement. The suit itself (and many facts outside of it that corroborate its allegations) prove the spokesman's statement to be false. In this regard, this won't be the first time a Boeing spokesman called white black and black white. Of course, maybe he was just ignorant of the real truth, but you would think that Boeing would put someone knowledgeable of the subject out to comment to the press. In fact, Boeing’s OIG is the organization tasked by Boeing with retaliating against whistleblowers. The antithetically named Boeing Ethics program is also intentionally ineffective, especially if your complaint is against management: http://eastmans.web.aplus.net/pblog/ind ... 202-151930 ) The suit is clearly without merit and Boeing will defend it accordingly."

Bickers confirmed that Sicilia worked in contracts and pricing and then worked in the OIG organization. He also said that Sicilia was not employed as a Boeing attorney. (That appears to be the truth, for once.)

Sicilia's lawyer, reached by phone on Wednesday, says she intends to seek a jury trial. (Smart move. Don’t ever put your fate in the hands of a King County Superior Court Judge—you may get one of the few good ones, but that is extremely unlikely odds.)

"Boeing takes a scorched Earth litigation philosophy," Spokane trial attorney Mary Schultz said. "Never admit. Never acknowledge. Never say you're sorry." (Wow. True, indeed. If Boeing had honest management of integrity, it wouldn’t have to resort to such tactics.)

Schultz' firm, Mary Schultz Law P.S., and William Gilbert of Dano, Gilbert & Ahrend PLLC are handling the case.

To emerge successful in a wrongful termination case such as this one, Sicilia's lawyers do not have to prove that Boeing did anything wrong. Rather, they must prove that Sicilia honestly believed that Boeing did something wrong, and that the company retaliated against him because he spoke out. (That’s good, for getting any responsive information in discovery that would negatively and truthfully reflect on Boeing wrongdoing would be difficult, indeed. Corrupted organizations like the King County Prosecutor’s Office also help in obstructing such discovery, as they did in my case.)

"This is one of these areas that the American public is very concerned about these days," Schultz said, referring to the government contracting process. "People like Joe Sicilia are very important for the integrity of the system." (Amen. A huge understatement, in fact. With many corrupted government agencies still, whistleblowers are the public’s almost only hope to expose and correct fraud by ethically and legally wayward companies.)

Read the full text of the compliant:

http://blog.seattlepi.com/aerospace/lib ... boeing.pdf

The lawsuit is filed in state court. Boeing faces at least two other wrongful termination suits in federal court:

http://www.seattlepi.com/business/38597 ... uit01.html

http://www.seattlepi.com/business/390401_boeing03.html

(Those are the two SOX IT whistleblowers who were wrongfully terminated by Boeing.)

And now my (and others) comments on this news:

Sicilia is right. His suit provides real insight into what I've known for years of Boeing management misconduct and fraud—and it indicts the Boeing OIG and Ethics departments, and rightfully so. As Sicilia's and many others' experiences show, Boeing is never serious about compliance with laws and regulations, even at the highest management levels, and even in the departments created to give the appearance that Boeing intends to comply.

What happened to Sicilia is SOP for corrupt Boeing management against anyone they see as a threat to Boeing management's numerous frauds. There must be a book for corrupt managers on how to do such retaliation and harassment, as Boeing management is too consistent at doing it for there not to be such an "anti-bible" they use for such cover up actions for their fraud.

I and many others have witnessed the deep, deep corruption of Boeing management from the lowest first line to the highest management levels at the company. And many of us have suffered retaliation and harrassment for doing the right thing at a company where the management insists on being able to do the wrong thing--no matter how many lives are lost in the process or how many dollars the government is defrauded out of, or how seriously our nation's security is damaged by their frauds.

RICO laws need to be enforced ASAP against Boeing management for the sake of all Boeing employees. I don't know of any companies' management more deserving of the application of those laws against organized crime. Suits such as these are too slow at reform. Bravo to Sicilia for naming Boeing employees in his suit. That may be a quicker way to reform--not going after the "Queen" of such corruption, but going after the individual corrupt "ants" in the "ant hill," thereby scaring each individual ant into compliance when the management (the "Queen" ant) obviously wants the opposite.

To have a company such as this in America with a management so corrupted and so unreformed and still apparently "untouchable" by law enforcement makes America itself look corrupted. There should be no free passes to violate laws and commit fraud in America--no matter what the size of the company.

BoeingStockHolder on the P-I website had some excellent points on this article:

"The world is finally starting to see the light escaping from the black hole of OIG and BLT (the Boeing Legal Team) and it's not just poor disgruntled OIG auditors as AJ initially reported...now that the tables have been turned on one of the inside men by OIG and BLT...How many of the same complaints of the "Ships on Fire" do we have to hear before the ship burns down to the waterline?"

BoeingStockHolder is exactly right. Perhaps a judgment large enough in this case will finally motivate the Boeing OIG and Boeing Legal Team to follow the laws and regulations rather than finding ways (including whistleblower harrassment and retaliation) to continue to skirt them undeterred. It's all about the money with these types--not right and wrong--so if it can easily be proven that Boeing loses more money engaging in fraud than it gains, then it will finally reform.

Another comment form an unregistered poster:

"BA doing something illegal ? Of course – what’s new? Fish rots from the top. I've dealt with the BOD as a shareholder, with Perkins Coie, and a few corporate sectys over the years. Its been downhill since Frank Shrontz and his entourage left, and over the cliff since BA melded with the Mickey D Klan"

Excellent point, unregistered! True, both about Boeing management and Boeing's outside counsel.

Another astute poster:

"Those of us who have been at boeing - and had to deal with some the jerks in corner offices probably have NO problems in following this guys story as shown in the filing. And more than a few can probably make his story seem mild."

Amen. Worked there. Seen the criminality up close. Too bad Boeing helped install their own King County Prosecutor that covers for Boeing crimes instead of prosecuting them.

Yet another enlightened poster on the forum:

"...ethics every day, not just once a year...I'm more concerned that, even perceived from inside the company, there is merit to these allegations of misconduct and unethical actions. BTW ... The Boeing OIG is not a compliance organization ..... its a damage control team."

Exactly. It is more than a damage control team--it actively retaliates against whistleblowers, as this suit and many other cases prove. The government cannot do business with Boeing rightfully until the OIG, BLT, and Boeing management are reformed.

Glad to see Boeing management corruption and lawbreaking are now common knowledge. As Marianne Jennings said, eventually a companies' frauds will come to light no matter how hard they try to hide it.

Boeing management is now beginning to reap the "rewards" for selecting the ethically bankrupt managers instead of the ethical or competent. When you force the ethical employees out of the company, it shouldn't be too surprising what is left. A whole book could be written about just how Boeing management and Boeing Legal got so corrupted. It would be best however, if ethical police and prosecutors did the work on that "book" themselves. If so, it would have a happy ending for both Boeing and the public, even if the public had to pay for the living expenses of many officials in and out of the company as a result.

Just how compromised "Boeing Ethics" and the Boeing OIG are is starting to become more widely known, finally. Let’s hope that the people outside Boeing with the power to reform Boeing also notice.

Read the documents at the links below to find out the “latest” violations by Boeing management of the laws meant to protect our national security.

The State Department Directorate of Defense Trade Controls (DDTC) feels that Boeing has a “serious, systemic, and longstanding” problem with export violations. They are, of course, right on the mark about that.

Of course, the sanctions implemented for these violations will not deter further violations by Boeing management. Boeing management has demonstrated that even a 615 million dollar fine will not result in reform of itself and real, effective “compliance” processes, so the 3 million dollar fine for these violations will be orders of magnitude less effective at getting Boeing management to begin to fully comply with our most important laws to our national security.

The 3 million dollar fine is equivalent to a person making 60,000 dollars a year being fined one dollar in each of the next three years for serious violations of the laws meant to protect our national security. Would such a fine make such a hypothetical person do anything differently than they had done before? No? That certainly is the most obvious answer. That may explain why the equivalent $15 fine for the last egregious violations by Boeing of ITAR laws were not effective as well.

Sanctions for such serious lawbreaking imperiling the security of our nation would be much more effective if the "veil" the company places over violations is pierced by government officials and individual Boeing employees charged with crimes in addition to sanctions against the company itself. Of course, even such sanctions against complicit Boeing employees would have to be heavily policed to ensure Boeing did not pay any fines brought against individual employees. When I was in Flight Test QA I heard it bandied about that a Boeing pilot had been fined $30,000 for violating FAA regulations, but that Boeing had paid the fine for them. Of course, Boeing paying such a fine would have much less deterrent effect on the pilot than if Boeing hadn't paid it for them.

In one of stories I was the source of about the unauthorized transfer of B-2 technology by Boeing to their Commercial programs, one employee is documented as fearing indictment if they wrongly certified the 787 was free of ITAR data. Boeing also unfortunately stepped in in that case as well and said they would take the blame instead if their certification was proven wrong, thereby short circuiting what was a healthy fear (for compliance) by the employee of the personal consequences of their actions. Obviously, for compliance sake, what is needed is for the consequences of violations of these important laws to reach the individual employees and lawyers responsible for breaking them, not just for Boeing to make them simply another cost of doing business.

Reading the below documents is also a bit concerning for another reason. Like many such agreements with Boeing, one person holds all the cards as to whether Boeing is deemed to hold to the agreement or not.

Laws meant to protect national security are much too important to give one person such an important responsibility. It would be too easy for Boeing management to perform a “Druyun arrangement” with such a person, even if that person had not before succumbed to such an offer. Any such agreements should ensure that no such conceivable fraud (especially considering Boeing's documented history in this regard) by the company could endanger its viability at acheiving its goal--real compliance with the law.

The past agreements with Boeing as part of its management’s habitual lawbreaking (only a small part of which Boeing has been held accountable for in any way) all seem to have been victim to putting the judgment of compliance into many too few hands.

In the case of these violations, Boeing gets to hire their own auditor, as long as the choice is acceptable to that one official.

Boeing’s internal “compliance” processes implemented as C/A for the few past frauds they were caught at have proven ineffective, to say the least. A new suit by a whistleblower I will post about later shows just how badly compromised Boeing Ethics and the Boeing Office of Internal Governance tasked with these “compliance” processes are. Read this blog and www.thelastinspector.com for further evidence of these effectively fraudulent compliance measures instituted as a result of Boeing’s frauds.

Like the proverbial “horse and water” analogy, you can lead corrupt Boeing management toward compliance, however you cannot make them imbibe of it. For that to happen, you need to change out the corrupt management itself. Just a few sacrificial lambs’ heads rolling at the top as happened in the distant past will not suffice.

When it comes to lawbreaking, much of current Boeing management are just like junkies—no amount of fines will get them to quit “shooting up” on such lawbreaking that so easily maximizes the bottom line without the much harder work or real compliance and competence at doing their jobs. Their doing prison sentences would obviously be more effective, especially if managers of competence and integrity immediately were put in their vacated positions.

When will Boeing management stop taking shortcuts by violating laws and regulations in order to meet bottom line and personal stock option value goals?

Your guess is as good as mine.

But one thing is for sure—Boeing management will not undertake such minimally required reforms unless they are forced to do so by other means than mere fines that don't come out of their own pocketbooks.

http://www.pmddtc.state.gov/compliance/ ... mpany.html

BoeingDDTCChargingLetter06092008.pdf
BoeingDDTCConsentAgreement06092008.pdf
BoeingDDTCOrder06172008.pdf

As no reforms in Boeing management have taken place since this letter, please use it as a model for your letters to the next procurement team and your Congressional politicians. Just substitute your own experiences with Boeing management fraud for mine. The taxpayer as well as the warfighter need to be protected from such Boeing management continuing Druyun/Sears-esque fraud. Note that I advocate for a Boeing selection despite corrupt Boeing management. I feel the extra expenses to guard against Boeing management fraud are outweighed by the necessity of this program to Boeing employees and our wider industrial base. This letter was previously posted at www.thelastinspector.com

Here is an important story yesterday in the Seattle Post-Intelligencer that explains in part the corruption detailed in the letter below--the first Boeing tanker procurement scandal was never adequately investigated--no adequate investigation, no adequate reforms.

http://blog.seattlepi.com/aerospace/archives/168964.asp





February 25th, 2008

The Honorable Sue C. Payton
Assistant Secretary of the Air Force for Acquisition
1060 Air Force Pentagon, Room 4E964, AF/AQ
Washington, DC 20330-1060


Dear Assistant Secretary Payton:

This urgent letter is to inform you of matters that I have witnessed that I believe should strongly bear upon how you should go about structuring the KC-X contract and how you perform contract negotiations should The Boeing Company be selected over the Airbus/Northrop team as supplier of the KC-X Aerial Refueling Aircraft.

First, I want to make my motivations in giving you this crucial information clear: I am not trying in any way to influence you to select the Airbus/Northrop proposal for the KC-X instead of the Boeing offer. Instead, quite the opposite is true, although that is not related to this letter other than as background information. I do hope you ultimately select the Boeing RFP even considering the corruption I detail below that I witnessed that is still entrenched deeply within Boeing management following the former tanker contract debacle and other Boeing ethical and legal lapses that have been aired publicly for several years now.

My opinion as a loyal former Boeing employee and U.S. citizen that can trace my roots in this country to eighteen years after the Plymouth Colony was settled and some 138 years before our country was founded is that it is essential for the economy of our country, the preservation of aerospace manufacturing jobs in this country, and therefore the preservation of military aircraft production capacity within the United States, that Boeing is ultimately selected as the winner of the competition for the KC-X contract.

That said, I can now get to the essential crux of this letter, which is how best you and your KC-X procurement team can structure a contract should, as I hope, Boeing wins the competition, in order to protect the Air Force, Air Force personnel who will fly on and use these tanker aircraft, and the American taxpayer from the consequences of the fraud still ongoing within management at Boeing today several years after Boeing’s much self-publicized “ethics reforms.”

As a former Boeing Quality Assurance Inspector until just over a year and a half ago, when I was terminated per the direction of the highest management levels at the company for collecting information in order to bring this continuing fraud in Boeing management to light, I witnessed this management fraud in Boeing Commercial Airplanes Quality Assurance on a daily basis. Knowing not only the lives of the public were being intentionally placed at higher risk by corrupt Boeing management because of this fraud, but the lives of our brave military personnel were placed at much higher risk illegally, as well, to maximize Boeing’s bottom line, I knew I had to act to stop this brazen fraud before more lives of the public and our military that fly on Boeing Commercial Airplane platforms were inevitably lost, so I reported this rampant fraud in QA throughout BCA to the FAA in early 2002, well before the former tanker contract debacle.

By the way, this letter is in no way related to Boeing Corporate Headquarter’s retaliation against me as noted above. I knew the day I decided to try to bring Boeing’s illegal actions I witnessed to justice that I would be ultimately removed from my job by Boeing as retaliation for attempting to bring Boeing management’s fraudulent actions to an end as I knew Boeing management’s corrupt modus operandi almost better that they knew it themselves at that point, when Boeing’s “win at any cost” “ethic” was in full swing, as it had not been publicized yet.

The fraud that I witnessed and reported to the FAA in early 2002 is a fraud that sadly continues to this day, due to a relationship with the arm of the FAA that I reported it to that mirrors to some extent the bias that was unfortunately shown by a few former officials in the Air Force before those officials were removed from their posts following the reforms instituted after the 2003 tanker procurement scandal. While the Air Force, under your new leadership team’s hard work and integrity, is totally reformed now and is up to the task in performing your duties with the utmost integrity for the benefit of the taxpayer and our military you represent, the same cannot be said of the FAA and Boeing management involved in the continuing fraud I witnessed. And it is this continuing fraud that, if not noted and addressed by your team as it relates to the KC-X program, poses a grave threat to military personnel who fly on or use the services of the KC-X tanker, and an unreasonable danger to the wise use of American taxpayers’ dollars. Possible challenges to the hard won reputation of the procurement agency for the program also exist if this ongoing corruption at Boeing and the FAA is not properly addressed before a contract is signed, and is not properly mitigated during the life of the program.

The fraud I witnessed on a daily basis at Boeing is something you have likely heard of. While my coworkers and I referred to it as “rollerstamping,” this fraud does have other names in the industry, such as “hot stamping,” or perhaps its most apt description: Product Substitution.

As you well know, the safety, quality, and reliability of military as well as commercial airplane platforms that are produced must be ensured by strict adherence to inspection, testing, and other quality assurance processes. Without such processes, no matter how well intentioned the people are that do the actual construction of those aircraft and their many component parts, inevitably faulty and/or incomplete aircraft will be produced because all humans by nature make mistakes, especially on fast paced and complex tasks requiring high levels of skill, such as in aircraft manufacturing.

That basic fact is acknowledged in the modern regulations and implementing and necessarily mandatory quality assurance procedures that have been put in place over the years to ensure the safety, quality, and reliability of military and commercial aircraft is ensured, and is ensured to the high level required.

However, to Boeing and FAA management, those critical regulations and implementing procedures are only guidelines, if that.

At Boeing, inspectors are expected by management to “look the other way” rather than actually do their critical jobs of ensuring the safety and conformity of Boeing aircraft, and FAA Aviation Safety Inspectors are also similarly expected by their management to “look the other way” from their duties to enforce the FAA regulations at Boeing and to ensure Boeing is adhering to their FAA required quality system.

Is this corruption just speculation? Hardly. I, as well as many others, witnessed it, and I in fact proved it during my dealings with top Boeing and FAA management in my thusfar futile efforts to end this endemic and symbiotic Boeing/FAA fraud.

My reports of this fraud at Boeing to Boeing and FAA management did not have the desired result of reform so inspectors like me could begin to do their critical jobs without the inevitable harassment and retaliation for doing so. The FAA and Boeing chose to cover up and protect this fraud rather than investigate and end it. My refusal to ignore FAA foot dragging on investigating my report did result in corrupt FAA management having to document a few of my many reported Boeing noncompliances so as to be able to say they did an investigation, so they unwillingly corroborated several systemic noncompliances I reported. However, the major and most serious by far noncompliances the “investigation” of my report by Boeing and the FAA uncovered was in proving that the many noncompliances I reported were not just a result of low level Boeing management corruption—they were instead a result of corruption at the highest levels of FAA and Boeing management—a true “working together” corrupt relationship to ensure Boeing did not have to abide by what they saw as too expensive to comply with mandatory quality and safety ensuring regulations and procedures. What Boeing management got out of this corruption is clear as most of their compensation is tied to bottom line driven stock option prices. What the corrupt FAA management involved got out of ensuring Boeing could break regulations, in opposition to their mandated duties, other than “quid pro quo” well paying jobs at Boeing and organizations funded by Boeing is less clear, but time will tell.

Since you are busy, I will spare you the details in this letter as this letter is to only warn you of this fraud so you can take measures to protect the taxpayer and warfighter from it before it is too late to do so. The details of this fraud are on my website, www.thelastinspector.com . I strongly suggest you visit the site to find out the corroborating and disturbing details of this corrupt FAA/Boeing relationship.

As you are intimately aware of the inner workings of the aviation industry as I am, it should not surprise you then that the ethics reforms Boeing said it undertook after the first tanker contract and the Lockheed RFP data theft debacles did not “take,” and Boeing management still relies on unethical and illegal activities to enhance its bottom line. Even unethical and illegal activities that obviously place many citizen and military lives at risk.

Although Boeing has apparently been very careful to not use such unethical and illegal habits in the current tanker RFP until the contract is sewn up, that has not prevented it from engaging is such misconduct in other areas of its business—especially “safe” areas to do so, such as internally in making quality and safety assurance at Boeing one of the most corrupt organizations within Boeing, and in long fostered corrupt relationships with FAA management. The Boeing Legal department is another area where the illegal is tolerated, if not fostered. They were they department of Boeing tasked with covering up rather than ending the Boeing management corruption I reported to them on two occasions. It is no accident an internal Boeing system used by Boeing Legal is called the “elegal” system, and that one of Boeing Legal’s top attorney’s mantra was “you gotta do what you gotta do.” Rather than end the corruption I reported to them, the same Boeing Legal attorney assigned to “investigate” my report was also assigned to personally ensure I was arrested and charged with a crime for collecting data for my continuing efforts to end the noted Boeing/FAA corruption.

However this letter is not about what Boeing has done to me. It is solely to protect the taxpayer from being defrauded by Boeing as it defrauds its current customers via the ongoing product substitution abetted by corrupt management personnel in the FAA, as well as to ensure such fraud is not allowed unwittingly by your organization to place military personnel’s lives at extra risk by your organization not being informed of it.

I have read disturbing articles about the still unreformed FAA being allowed to certify 767 tankers for Japan and Italy. Such certifications are next to meaningless in the current era of FAA management corruption. This is a key area that will have to be changed should Boeing be awarded the contract.

If FAA personnel have to be used on the tanker program in any way, DCMA Quality Assurance personnel must closely supervise FAA personnel to ensure they are actually doing their critical jobs rather than mostly pretending to do them. They must perform independent audits of Boeing quality assurance as well as FAA inspections and certification work with ending and preventing the fraud reported in this letter and on my website in mind during the program. Such heightened oversight activities by the DCMA must be allowed in the contract.

Boeing will likely pursue language that FAA and FAA delegated Boeing personnel do as much of the inspection and certification work as possible in the contract. After this letter, the motivations of such language should be much more transparent. Language must be inserted in the contract to give the DCMA the authority, headcount, and budget with which to perform the much increased oversight functions that will prevent FAA/Boeing fraud on the program from being used to pump up Boeing’s profits from the program via the noted product substitution currently enabled by “quality assurance” at Boeing and the reduced certification costs lack of real FAA oversight provides.

Such real oversight by the DCMA would uncover problems in the production system hidden for years by the noted Boeing and FAA non-oversight of Boeing’s engineering and production processes. This would add additional costs to the program, but the conforming aircraft that would result would be worth those costs. Drawings and engineering specs that could never be complied with as they were in error and/or conflicting would be uncovered—never fixed because Boeing management thought it would cost too much to fix them and that such fixes were “non-value added” no matter how much the errant engineering confused those who had to try to build per those drawings/specs and how creative mechanics had to become to make what they thought the engineer might have intended. Such evidence of past Boeing and FAA carelessness will be simply more proof of the corruption I am disclosing to you now.

Although I have not been on the Boeing production line for over a year, there is no doubt the FAA/Boeing fraud proven by the handling of my reports continues to this day. I still communicate with Boeing personnel on occasion. Nothing has changed. If the noted fraud was ended by Boeing and/or the FAA, the severe bottlenecks on production programs resulting would have to be made public, and an announcement by the FAA making the public announcement of the ultimately ineffective FAA Special Technical Audit of 1999/2000 seem very insignificant by comparison would have to be done. Neither has happened to date.

As you can see on my website documenting the Boeing and FAA management corruption I and others have witnessed, “working together” fraud in Boeing and FAA management will not be the only Boeing mismanagement and fraud your team will have to be vigilant in preventing in order to protect the interests of the military and our country’s citizens during a Boeing tanker program. Boeing’s past intentional and “unintentional” mismanagement of ITAR controls is an area that will need special emphasis in preventing during a Boeing tanker program. The QRS-11 chip debacle is just one such instance of ignoring such controls that I helped ensure a fair end to for our country. Transfer of ITAR data between commercial and military programs is another area that will need to be of special concern during the program in terms of putting in place controls to prevent such actions by Boeing’s still ethically challenged management during the program, and/or to prevent Boeing management’s past demonstrated disdain for adhering to ITAR controls when more money can be made by ignoring them from affecting how such controls are used on the program.

And then there are the 787 delays and the Japan and Italy tanker delays to consider as far as how to best help Boeing management avoid a repeat of those delays during a tanker program for our government. It is my belief that it was Boeing’s focus on “leaning out” the production and certification processes and focusing on the financial planning aspects of the program rather than planning sufficiently for production of the 787 itself that has resulted in the 787 delays. Schedules planned too tightly in order to meet financial targets ultimately has resulted in the delays thusfar, I believe. Notably, one of the “bright spots” in the 787 program thusfar has been the “smoothness” of certification activities on the program and the FAA siding with Boeing over experts on some controversial certification tests performed and those chosen not to be performed as was required in past new programs. I need not, I trust, give my well informed opinion as to why the FAA has been so accommodating to Boeing’s every wish on the program, and has allowed unprecedented levels of delegation of Boeing personnel to do formerly and exclusively FAA performed certification activities on past programs on the 787 program.

I will let my website give you the rest of the details. Please do not hesitate to contact me if you have any questions for me not addressed in this letter or on my website.

Please do not penalize Boeing workers for the continuing “sins” of their management. I believe, if you heed the warnings in this letter, Boeing and FAA management’s arrogance in continuing to perform unethical and illegal activities if the personal rewards are seen to outweigh the risk can be mitigated completely so that the Air Force will avoid being defrauded and receive the product contracted for, with the required levels of quality, safety, and reliability assured. And our country and the vast majority of Boeing workers not complicit with the noted fraud will reap the benefits of such a key contract to protect our military aircraft industrial base.

I hope one day soon the noted FAA/Boeing fraud will be ended. However, until then, procurement officials like you and the DCMA will have to take actions to protect our country and military from it on programs such as the KC-X tanker program and the P-8A Poseidon program.

Please ensure these warnings are heeded and the contract language is structured to protect the Air Force and the taxpayer from the noted Boeing/FAA fraud. Please delay any contract signing until such contract language is drafted, if necessary.

And please distribute this letter to your Deputy, Lt. Gen. Donald Hoffman, John Young, and any other member of your team that you believe has a need to know this information.

Sincerely,



Gerald Eastman

cc: The Honorable Patty Murray
United States Senate
173 Russell Senate Office Building
Washington, DC 20510
202-224-0238

cc: The Honorable Maria Cantwell
717 Hart Senate Office Building
Washington, DC 20510
202-228-0514 fax

The following is from a comment (minus the political asides) that I entered on The Seattle Times website for the following article on the announcement of DOD proposed cuts in its defense contracting:

http://seattletimes.nwsource.com/html/b ... uts06.html


This is an interesting story, in that Boeing seems to be more affected by the cuts. I may know a little more why that is in addition to the pros and cons of particular programs on the chopping block.

Boeing is a theoretically good company with an almost completely corrupted management. Truth is, Boeing has been stealing technology it does not own from the military side and using it on its commercial side, which the same corrupt executives that stole it then outsource to proscribed countries.

That is a simplistic view of the corruption. The reality is much more complex, however. The corruption is very, very deep, and any technology the government or a subcontractor or prime contractor places within Boeing's walls is not safe from such illegal theft and illegal disclosure.

And that may be why the DOD is "downsizing" Boeing's military side, because they are well aware of Boeing's continuing inability to keep their hands out of the export controlled cookie jar of technology it does not own and is prohibited from disclosing, which it then discloses to our potential enemies anyway.

At the 8/1/06 Boeing GSA (Global Settlement Agreement) hearings before the SASC (Senate Armed Services Committee), some senators seemed to express (carefully) that the 615 million dollar fine was perhaps too lenient for Boeing's crimes, and that perhaps debarrment from any further goverment contracting was really needed in response to Boeing's continual reoffending, but they couldn't do so because Boeing's defense business was so big that the country needed to do business with it, even in its dishonest state.

And these cuts may be the fallout from that meeting--the government making Boeing's defense side small enough (as republican's say) so it can then be "drowned in a bathtub," therefore solving Boeing's theft and illegal export of sensitive military technology wrongly entrusted to its corrupt executives forever.

I realize that these programs employ many people. Although some of them are the idiots like NoBS that post here and actually believe the misinformation they repeat constantly, many are good people who do great work and deserve their jobs. I used to work with many of them.

It would be sad if they have to suffer for the crimes of corrupt Boeing management, but corrupt Boeing management has long ago demonstrated that they care about their own parasitic and destructive jobs at the company far, far more than tens of thousands of the worker bees at Boeing that will lose their jobs because of the fallout of their own personal greed, corruption, and illegal export of military technology to proscribed countries.

The solution is obvious, but as everyone knows, often it is the corrupt management of a company that is hardest to remove before they succeed at bringing the whole company down via their numerous frauds. No one in Boeing management has been held accountable for these numerous ongoing frauds as of yet.

I was hired in on the military side of Boeing. Working on military programs can be hard work but very satisfying work because of the pride in helping your country protect itself. When your management steals that technology and illegally exports it, it doesn't make you feel that great about your companies' role in protecting the nation, however.

Of course, Boeing has been milking government contracts like cash cows for as long as I am aware of. 12 hour days 7 days a week even when there is nothing to do because Boeing supposedly got paid a set amount per the contract for every man hour worked. That abuse, also, should have been ended long ago, however the problems on the ABL and other programs Boeing has seem remarkably similar. Obviously, real oversight over these contracts must be restored.

Such abuse gives fodder to those who oppose military contracts as a matter of course.

I hope that Boeing soon hits the "eject" button on its management and saves its military side from drowning in the bathtub by irate government officials POed at their ongoing fraud, but the greed of those fraudsters never ceases to amaze me. They are parasites in the true sense of the word, not releasing hold of their host until it has died and they can no longer suck further blood from it.

The following is an interesting comment after mine from timmy3923:

Boeing use to be a company that had integrity and a quality product. But around the 1995-96 era and the inception of it's present senior leadership team, the company has turned to nothing more then a company that will do anything to keeps it's stockholders happy. To hell with quality or integrity, make money. That was when folks who helped build a good company and had been working there for 20+ years, bailed as they were disgusted with the direction the company was heading. My father was one of them and opted to take the early retirement that was offered at the time because he didn't want anything to do with where Sr. Management was taking the company and how they were going to do business. During that time frame, Boeing lost a huge amount of talent and has never recovered since.

It' a wonder how they keep the company going now, other then the legacy of work and engineering that was done for the 737, 767 and 747 airplanes. Since then it's been crap and not a wonder why Airbus is beating the pants off of them now.

The following is my response to his comment:

timmy3923--true, Boeing has set a whole new level of corruption in search of the almighty ever increasing bottom line than even Enron did. Your insight about when exactly this happened is valued. The 1997 production debacle and the McD merger helped exacerbate the corruption, as corrupt Boeing management solidified their belief then that the ends (profitability and stock price goals) justified the means (breaking every law).