WhistleblowerSupporter

You can take part in a GAP Conference Call!

Please tell your friends about the Government Accountability Project conference call by forwarding this email. It is free to participate, open to non-members and will contain a lot of important information for anyone interested in a law that could

A)    Ban political appointees from interfering with the work of federal climate scientists,

B)    Extend whistleblower protections to FBI employees and government contractors, and

C)    Provide specific authority for whistleblowers to disclose classified information to members of Congress.

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The Government Accountability Project

For

The Whistleblower Protection Enhancement Act:

News on the Milestone Whistleblower Legislation at a Critical Stage in Congress

And

What You Can Do to Help Us Win an Historic Victory for Whistleblowers

Telephone Conference Call

Wednesday, August 1^st

6:00pm (ET)

With

Tom Devine,

Legal Director, Government Accountability Project

&

Adam Miles,

Legislative Representative, Government Accountability Project

For Details of How to Call-In, Email richards@whistleblower.org

Featuring Presentation, Discussion and Questions from Callers On:

Current whistleblower protection

GAP's role in creating current protections

How and why the current protections are inadequate

What the proposed legislation would achieve

History of attempts to pass new whistleblower law

The current legislative progress and likely timeline

Champions, opposition and fence sitters in congress

Pitfalls: how the law could be derailed by process and amendments

To Listen to Recordings of our Previous Conference Calls, on the Paul Wolfowitz Scandal at the World Bank and our work with drug safety whistleblowers at the FDA, visit our conference call web page.

More Historical Boeing/Whistleblower Patterns?

This is another historical document/article.  It is interesting when one starts researching, the number of things that pop up and the patterns that appear to emerge.  G.F. Scott

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CounterPunch (Out of Bounds Magazine)

Original article at:  http://www.counterpunch.org/stclair07262003.html

July 26, 2003

Onward and Downward

Book Cooking at Boeing

By JEFFREY ST. CLAIR

Early this summer, a top Wall Street stock picker issued a glowing report about Boeing: buy, buy, buy. The unusually rosy assessment for the troubled company had nothing to do with the need to replenish the Pentagon's arsenal of cruise missiles depleted by the Iraq war or the Bush administration's drive to implement Star War, both of which will net Boeing billions. No, this analysis, written by Heidi Wood, a vice-president at Morgan Stanley, pointed to "a no risk" risk deal with the federal government to lease 100 Boeing-767 tanker aircraft.

According to Wood's report, the deal will generate $2.3 billion in profit for Boeing. To put this in perspective, that's about as much profit as Boeing reaps for the sale of 1,033 of its 737 commercial airliners. From Boeing's perspective, the great part of the tanker deal is that the company has few obligations, yet the government is locked into the leases, even if it proves that the Pentagon doesn't need the planes. Boeing is guaranteed a 15 percent profit on each plane it delivers. "There's substantially less risk than is common in the commercial aircraft market," Wood wrote.

Wood should know what she's talking about. The Wall Street Journal calls her the top stock analyst in the Aerospace / Defense sector and she also serves as a Bush appointee to the Commission on the Future of the US Aerospace Industry.

Under the deal approved by the Pentagon last month, Boeing will convert 100 B-767s into military refueling tankers. It's quite a coup, because many Air Force generals have said that the planes aren't needed, an assessment backed up by a Government Accounting Office investigation.

There are currently 545 KC-135 tankers in the Air Force fleet. More than 400 of them are new, fully upgraded "R" models. The other 134 tankers are older "E" models that some inside the Pentagon and the Congress are anxious to replace with the leased planes from Boeing.

On the surface, the Boeing proponents appear to have an argument: the E tankers are aging. Most of the planes are 35 years old. However, the Air Force primarily assesses the life span of planes based not on age but on flight hours. The engines for the "E" model has a projected life of 36,000 flying hours. A 1995 GAO report revealed that the majority of the "E" tankers have accumulated about 13,000 hours. The report projected that not one of the tanker planes in the fleet would reach its limit until 2040. The new plan is to begin replacing the E tankers with the Boeing planes in 2006.

Even if the Air Force decided it needed to upgrade the engines on the E planes sooner, because of added usage and stress from the wars in Afghanistan and Iraq, it would be much cheaper to simply upgrade the engines instead of entering into a lease arrangement with Boeing. The GAO estimates that the entire fleet of "E" tankers could be upgraded with "R" engines for about $3.6 billion. This is more than seven times cheaper than the $26 billion the Air Force will have to fork out for the Boeing commercial tankers.

Despite the fact that Boeing famously fled Seattle to set up its new headquarters in Chicago, the tanker lease deal was engineered through the tireless work of the Washington State congressional delegation, led by Sen. Patty Murray and Congressman Norm Dicks. Wood, who demonstrates a sophisticated understanding of the political economics of the Beltway, cautions investors that Boeing may need to demonstrate its gratitude to the Washington delegation by agreeing to locate some of its manufacturing plant for the new 7E7 commercial jet in Seattle rather than in a more corporate friendly environs.

"A subtle negative may be the payback required considering political capital BA [Boeing] has expended to land the tanker deal," Wood warned. "Now the company is somewhat beholden to its hard-working Washington constituency. This may limit some of the latitude the company would probably like to have in deciding where to build the 7E7, adding pressure to keep some of the 7E7 work in expensive, union-dominated Seattle."

Of course, the congressional delegation couldn't have prevailed on its own. Boeing got some vital help greasing this deal from the inside as well in the form of Darleen Druyun, a top Air Force official who called herself the Godmother of the C-17-the troubled air transport plane made by Boeing. According to Pentagon sources, she helped craft the tanker deal, fought off skeptical Pentagon accountants and auditors, worked the appropriations committees and, finally, when it all seemed nicely tied up, retired from the Pentagon and joined Boeing as an executive vice-president, where she now supervises the company's interests before congress and the Pentagon.

Druyun is not the only Pentagon powerbroker to be recruited into Boeing's corporate hangar. Recently, Boeing's board has boasted both former Defense Secretary William Perry and John M. Shalikashvili, at one time the chairman of the Joint Chiefs of Staff. In 2001, Boeing also hired Rudy de Leon, Clinton's Deputy Secretary of Defense, to run its Washington office. Although De Leon is known as a hawk and a masterful dealmaker, his hiring may have been a rare misstep for Boeing, since congressional Republicans howled that the company should have picked one of their own from the Pentagon's rolls.

It's just this kind of zealous devotion to political payback and behind-the-scenes influence peddling that has landed Boeing in a rare spot of trouble. According to a one paragraph item in Reuters from early June, the Inspector General of the Air Force has opened an investigation into Boeing whether or not Boeing should be debarred from bidding on contracts with the federal government. The probe stems from allegations that Boeing executives received proprietary information from Lockheed concerning bids on Pentagon contracts.

The Lockheed affair is not Boeing's only transgression. The Project on Government Oversight, a DC-based Pentagon watchdog group, reported last year that since 1990 Boeing has committed more than 36 violations and has been forced to pay more than $350 million in fines, penalties, restitution and settlement. Among the more recent allegations:

Boeing placed defective gears in Chinook helicopters;

Company officials offered bribes to officials of the Bahamas government as a means of securing a contract;

Produced a defective safety system for the Apache helicopter;

Misrepresented the progress of clean-up at Rocky Flats nuclear weapons site; Charges from the State Department that Boeing violated the Arms Export Control Act and International Traffic in Arms Regulations-more than 100 instances are cited;

Accused of civil rights violations in hiring and salary practices toward blacks and women;

Routinely mistated labor costs and exaggerated overhead costs.

These are serious charges of criminal and civil malfeasance, some of which Boeing didn't even dispute. Yet, despite the rap sheet, Boeing has never been suspended or debarred from bidding on contracts since 1990. Federal contract guidelines require that contractors to the government sanction violators and only award contracts to "responsible" contractors with a record of "integrity and business ethics".

Of course, Boeing is hardly alone in getting a pass from these high-minded rules. In the past decade, out of the top 50 defense contractors the Pentagon has only suspended the contract privileges of only one major company, General Electric Avionics Division, and that lasted for only five days.

Even so, some in Congress aghast at the mere possibility of a crackdown on cheating contractors make haste to loosen the rules even further. At the behest of Boeing and other big contractors, Rep, Tom Davis, the Virginia Republican who chairs the House Government Reform Committee, has just introduced legislation that will unravel many of the key provisions governing the regulation of Pentagon contracts.

One of the changes proposed by Davis is for the Pentagon to shift to so-called Time and Material and Labor Hour contracts, where the weapons firms would get paid for how much time they spent working on a project rather than by such standards as to whether they completed it on time or according to code. This amounts to a blank check without any incentive ever finish the job. Davis even includes a provision that would prohibit government auditors from examining the contractor's billing records.

The congressman, who once won a Harvard rock trivia contest by correctly identifying the Blues Magoos as the group that performed the 1966 hit "(We Ain't Got) Nothin' Yet, also wants to expand the use of Share-in-Savings Contracts, a kind of Enron-style financial speculation that allows contractors to be lavishly reimbursed for investments in infrastructure upgrades, such as computer systems. The companies are allowed to charge the government for "efficiency savings" over the lifetime of the contract. But even the Bush administration is skeptical of such claims. In hearings before Congressman Davis's committee last year, Angela Styles, the chief procurement analyst for the White House, testified that her office had examined dozens of the contracts and "we have seen no real savings."

The program is so ripe for fraud that one expert in defense contracts compared it to the savings-and-loan scandal. "Share-in-Savings contracts could propagate problems similar to those that accompanied deregulation of the government-insured savings-and-loans institutions or procurement of defense spare parts in the 1980s by sole-source contracts," says Charles Tiefer, a professor at the University of Baltimore School of Law.

The biggest prize for the defense contractors is Davis's plan to scrap key provisions in two hated laws: the Truth in Negotiations Act and the Cost Accounting Standards Act. Back in the late 1960s, Senator William Proxmire teamed with Admiral Hyman Rickover to standardize accounting procedures for defense contractors during the spending frenzy of the Vietnam War. They also set up a board to oversee the enforcement of the standards and deflate the complex accounting tricks of the defense contractors which were costing the government more than $6 billion a year.

The Truth in Negotiations Act forced weapons manufacturers to come clean with the true basis of their pricing and cost data. Under current guidelines, defense contractors must comply with TINA for any contract over $550,000. Davis's measure would effectively gut the bill by making the reporting requirements apply only to contracts involving more than $200 million.

After the defense industry consolidation frenzy of the 1990s, many Pentagon contract offerings now receive only one bid. To allow the defense companies to set their own accounting and pricing rules in this sole-source environment is to invite the kind of runaway fraud last seen in the procurement scandals of the 1970s and 1980s. It's one way to jumpstart the economy. No wonder Wall Street's bullish on Boeing.

[Postscript: This article was written in June. On July 25, the Pentagon announced that it was prepared to impose sanctions on some of Boeing's subsidiaries for contract fraud. This is the first tiime in more than a decade that the Pentagon has taken action against one of its prime contractors. The terms of the sanction have not yet been announced. But don't expect the sentence to be too harsh. The last time the Pentagon barred a big contractor from bidding on new contracts the ban only lasted five days. --JSC]

Jeffrey St. Clair is author of Been Brown So Long It Looked Like Green to Me: the Politics of Nature (Common Courage Press) and coeditor, with Alexander Cockburn, of The Politics of Anti-Semitism (AK Press). Both books will be published in October.

Questioning Boeing's Judgement...and the Government's

The Boeing Scandal After the Boeing Scandals  by Robert Weissman

Posted July 11, 2006 | 07:47 AM (EST)

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The United States treats its petty criminals harshly, and not just the worst offenders.

If you get caught selling small amounts of marijuana, or get caught stealing on a couple occasions, you are liable to get a significant jail term. Once you get out, you may well find you have to pay thousands of dollars in court costs and other fees. Get placed on probation, and you may have to pay the costs of your probation officer.

You may be deprived of your right to vote. You will find it very hard to get a job.

On the other hand, the crimes of corporations get treated with kid gloves. Leave aside for a moment the treatment of individual executives -- that's a topic for another day -- to consider how light the treatment is for corporations that commit crimes.

The latest evidence is a remarkable deal the government just entered with Boeing.

In May, the Justice Department announced a tentative agreement with Boeing to resolve two entirely separate and quite serious cases of apparent criminal wrongdoing.

The deal looked scandalous in May. But then the final agreement was announced just before the July 4 weekend, and it turns out to be worse than anyone could have anticipated.

Both of the instances of Boeing's wrongdoing involved major offenses against the U.S. government and U.S. taxpayers. They both involved projects of considerable importance to Boeing. And in both cases the company's conduct was extraordinarily egregious; these were not failures to comply with arcane rules, but theft of a competitor's proprietary data to facilitate bid-rigging and a quid pro quo arrangement with a government contracting officer to facilitate a massive government overpayment for a weapons system of very questionable benefit.

In the Evolved Expendable Launch Vehicle Program scandal, Boeing acquired 25,000 pages of bidding documents from its sole competitor, Lockheed Martin. It then used the information to set its bids just below those of Lockheed. The government and taxpayers were thus cheated of the benefits of genuine competition.

In the elaborate Darleen Druyan affair, Air Force contracting officer Druyan admitted doing a variety of "favors" for Boeing. In the Pentagon's misguided deal to lease rather than buy tankers from Boeing, Druyan admitted that she "agreed to a higher price for the aircraft than she believed was appropriate." Boeing reciprocated for these gifts -- ripoffs of taxpayer money -- by hiring her. Her hiring was managed at the highest levels of the company, involving then-Chief Financial Officer Michael Sears.

Despite the gravity of the corporate wrongdoing in the two cases, Boeing is going to get off with payment to resolve civil claims and a $50 million "monetary penalty." Not a criminal penalty, mind you, because Boeing is not being charged with any crimes, nor acknowledging that it might have been, based on the evidence. The company gets to avoid the reputational harm of a criminal plea -- or even a criminal charge -- and Lockheed won't be able to use any Boeing concession of criminal wrongdoing in the companies' ongoing civil litigation (which, incidentally, might be resolved by the two firms' rocket launch divisions merging).

For extensive materials on these cases, check out the good work of the Project on Government Oversight.

Non-prosecution deals like the Boeing agreement are the norm, not an exception. My frequent co-author Russell Mokhiber of Corporate Crime Reporter issued a study this past December which found that there were at least 34 non-prosecution and deferred prosecution agreements with large corporations between 1992 and 2005 -- with more than two thirds of the cases occurring since 2002.

But there are a few novel features of the Boeing deal.

First, it settles two entirely separate cases at once. One factor the Department of Justice is supposed to use in deciding whether to prosecute criminally is whether a company is a repeat offender. Here, we know Boeing is -- because the no-prosecute deal itself resolves repeat offenses.

Ralph Nader and I have written to Attorney General Alberto Gonzales, asking him to undo the Boeing deal and formally reassess the routinized use of deferred prosecution and non-prosecution agreements for large corporations. Our letter is here.

The basic idea behind non-prosecution or deferred prosecution deals is that prosecutors can extract commitments for corporate reforms that are more far-reaching than what they would have achieved with a criminal prosecution. A key element in all of these deals is that the company benefiting from the deal promises not to repeat the behavior that got them in trouble in the first place.

The second novel feature of the Boeing deal is how Boeing's lawyers restricted this pledge. As Russell Mokhiber first noted, under the terms of the actual agreement -- which the Justice Department only made available after Russell harrassed them -- if a non-executive level Boeing employee violates the agreement, that doesn't count as a violation by Boeing. "Drawing the line between executives and other employees is a little crude," said Columbia University Law Professor John Coffee. "I don't think you want to tell non-executive employees they are legally immune and can't get the company in trouble. You want the company monitoring all employees." That's not all. Under the terms of the actual agreement, if an executive commits a violation but the company turns them in, that doesn't count as a violation either. Russell and I wrote about these remarkable provisions -- which means to a considerable extent that Boeing can't violate the agreement with the Justice Department even if it does violate the agreement -- here.

While Congress is going through the Kabuki dance of considering flag-burning amendments, the real business of Washington goes on.

Boeing pays $ to make allegations go away...again

Forbes reports in “Boeing to Pay $1M to Settle Bills Claims” July 16, 2007, that the Boeing Company has agreed to pay more than $1 million to settle allegations that the company over billed for materials used in installing new KC-135 aircraft engines.  U.S. attorney’s announced this Monday, July 16.  Forbes story available at:  http://www.forbes.com/feeds/ap/2007/07/16/ap3919116.html

U.S. attorney, Eric Melgren, is quoted as saying “that the government alleged that Boeing double-billed for materials used in modernizing KC-135 Stratotankers and RC-135 reconnaissance aircraft.  Materials double billed included nuts, bolts, rivets, and fasteners.”   Further more, prosecutors alleged, “that Boeing charged for the materials even though those costs were included in the company’s contract with the government.”

It appears that, if the allegations of double billing are true, by allowing Boeing to settle out of court, the U.S. Attorney General’s office has rescued the company once again from the logical consequences of their actions.  Criminal charges, which if they’d been found guilty in court, would have caused an official record of criminal wrong-doing and the probability,  if not requirement,  of punitive removal of the company’s eligibility to bid on and be awarded lucrative government defense contracts for a set period of time, or possibly indefinitely. 

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This is the kind of thing, that an alert employee or other person might notice and choose to report the wrongdoing.  This is an example of  how ethical employees find themselves labeled as whistleblowers, and find their life disintegrating.  Anonymous reports of fraud, waste and abuse may be reported ANONYMOUSLY  to the Project On Government Oversight (www.pogo.org) and possibly other organizations as well.     

Boeing Whistleblower, Gerald Eastman, Speaks

Responsibility

Monday, July 23, 2007, 04:16 AM

Please see my post on 7-18-07 if you might be interested in contributing to my Legal Defense Fund. Thanks. Gerald Eastman, The Last Inspector  (www.thelastinspector.com)

Responsibility. An interesting concept. Of course, I am responsible for my own actions just as other people are responsible for theirs. Boeing and the county are attempting to make me responsible for actions I didn't even do, and to punish me in the worst possible way for those "crimes." While I didn't commit the crimes they wrote in a novella that they thought I committed, I do admit to mistakes in my long history of trying to bring FAA and Boeing fraud to an end. It was those errors that placed me in a vulnerable position for their unfounded charges. But hindsight is 20/20. You can't expect a corrupt corporation (the most arrogant one on the planet per the Boeing corporate security manager listed in my charging papers) to do anything different than what they did in my case, and to not influence the SPD and King County Prosecutor's office in similar ways that they control the FAA and certain other government agencies.

I am responsible for what I did. That is for sure. What I did, however, is quite the opposite of what I am accused of. That will be proven in court.

However, the real criminals are still on the loose, apparently with the full blessing of the King County Prosecutor to continue their crimes. One of my fellow inspectors called the process, "pushing garbage out the door."

You have to wonder how these criminals live with themselves. If it wasn't for their criminal inaction and protection of the rollerstamping quality system at Boeing at all costs, I wouldn't be in the situation I am now. That's not saying I don't take responsibility for my actions--it is saying that they don't take responsibility for their own criminal activities.

If any of the people I contacted had acted to end the obvious fraud going on at Boeing, I would have been happy and still working there if I wasn't therafter harassed and retaliated against for being the one responsible for ending the fraud at Boeing.

However they refused to do their jobs--Boeing QA management was doing the opposite of their duties to ensure the integrity of the Boeing quality system. I couldn't get them to reverse course on their bent.

The FAA refused to do their jobs so many times I lost count. It would have only took one person of integrity that was involved in the "investigation" of my report to do the right thing and therefore end the fraud at Boeing. From local FAA MIDO and TAD personnel, to FAA Headquarters in Washington D.C., none of the many people involved chose to do the right thing. My report documented the result of years of Boeing and FAA fraud. The FAA could have "turned a new leaf" and severed their corrupt relationship with Boeing after the saw how decrepit Boeing's quality system had become under their "hands and eyes off" "oversight" of Boeing's production system. But they didn't. They didn't pick up the phone to the FBI to bring my QA management to justice because they likely feared that they would also be held accountable for their corruption by the FBI. So they did next to nothing, and made my report go away with the minimum action possible against their partners in crime.

Surely I ruffled some feathers at the FAA in trying so hard to get them to end this fraud that obviously threatened many lives. These corrupt people are likely happy I am where I am today, even if it was their own refusal to do their jobs that led me to where I am today.

Boeing headquarters in Chicago is also responsible in part for where I am today. Twice they refused to take serious measures to end the fraud I reported to them. It would be a very costly fix to end this fraud--a cost they weren't willing to bear.

The Boeing Ethics Department is also partly responsible for continuing this fraud and making me go elsewhere to get it ended. They refused to touch corrupt QA management no matter how many witnesses there were. They worked together with Boeing Legal to ensure no manager was implicated in the corruption noted in my report. I don't think it is an accident the QA manager I complained about the corruption of was saved from layoff and promoted after my cpmplaint.

So, I think its kind of interesting what all of these people think about me paying for their crimes of intentionally not doing their regulation required duties. Do you think any of these people have a conscience and wish they had done their jobs instead of looking the other way? Or do you think they derive pleasure from getting me, the "do gooder" in the position I am now in? I agree that it is likely the latter feelings they are having, if any. After all, most of their dirty laundry is on my website to see. Maybe they think my website will go away if I do, and they will be free to practice their fraud behind closed doors as before.

A chief reason I think these people who refuse to do their jobs to this day to end this fraud feel no responsibility for the situation I ended up in directly as a result of their fraud is not simply because I tried to expose their fraud to their similarly corrupt superiors. It is instead in their very nature that they have had to cultivate over the years in order to take part in this fraud without seemingly blinking an eye--they have no empathy for anyone--especially the public they are supposed to protect. They have grown these careless hearts similar in character to the ones that let a serial killers kill without any feeling for their victims. They don't seem to care that their own "oversight" of their responsibilities in their critical aviation roles could easily make them the killers of many as well, in just one fell swoop. They simply are unable to take responsibility for their actions. If they did have consciences, they could not be part of their corrupt organization's pretend oversight of quality and safety processes critical to public safety.

My problem that got me in this situation is that I cared about the lives they were placing in danger by their fraud, and I had a conscience--something they could never understand--a conscience that led me to take action to protect the public when they would not. In their twisted logic, it is me that was "defective"--not them.

So, the county is trying to make an example of the "do gooder" in me that tried to end this fraud, while protecting the real criminals in this affair. How ironic. Maybe I shouldn't take responsibility for my "mistakes" in trying to bring them to justice until they take responsibility for their own crimes in all of this. If I did that, however, I would probably be waiting forever for them to come clean.

And so it goes. Those responsibile for much greater crimes than I am accused of go free, while I am held responsible for the trumped up crime of trying to make Boeing and the FAA responsible for their own crimes when they are unwilling or unable to take responsiblity for them themselves.

Loss of Liberty? A new book to read

ThomasPaine.com Blog Posting, of interest to anyone who is concerned about the state of Liberty in the U.S.!

Repeating myself

Submitted by Rick Perlstein on July 24, 2007 - 11:23pm.

Dude arrested for telling Dick Cheney his Iraq policy was reprehensible, leaving his eight-year-old child to fend for himself.

Matthew Rothschild tells that story in his new book. Here's the Amazon blurb:

Chilling true stories of ordinary Americans whose everyday liberties have been violated since September 11. 

"I'm very liberal and sometimes my friends say I'm giving them some kind of paranoid, nutty stuff, and I agree, but then the FBI show up."—Marc Schultz, reported to the FBI for reading an article called "Weapons of Mass Stupidity: Fox News hits a new lowest common denominator" while he stood in line at a coffee shop.

In West Virginia, Renee Jensen put up a yard sign saying "Mr. Bush: You're Fired." She's questioned by the Secret Service. In Alabama, Lynne Gobbell put a Kerry/Edwards bumper sticker on her car. She's fired from her job. In Vermont, Tom Treece had his high school students write essays and make posters either defending or criticizing the Iraq War. After midnight, the police entered his classroom and took photos of the student artwork.

The heated debates about the Patriot Act, about extensive registration and arrest programs for immigrants, and about domestic spying by the FBI, Pentagon, and National Security Agency have all been front-page news. But less understood are the effects of ramped-up national security policies on ordinary people across the country.

In this hard-to-put-down book, Matthew Rothschild, editor of The Progressive magazine, shows that post-9/11 America has entered a repressive age. Through dozens of engrossing and disturbing individual stories, You Have No Rights makes clear that America is now a country that is both less safe and less free.

Like I said, maybe we should hope the Secret Service keeps at it. One time something like this happened, the miscreant rode her arrest all the way to congress.

Scope of Apparent DOD/Boeing Corruption Just Continues to Expand

Senators raise questions on Air Force bid for more cargo planes

By Megan Scully CongressDaily July 24, 2007 

A bipartisan trio of senators is raising questions about whether the Air Force has launched an inappropriate, behind-the scenes campaign to secure more funding for Boeing Co.'s C-17 Globemaster III aircraft.

In a letter Friday to Defense Secretary Robert Gates, Senate Armed Services ranking member John McCain, R-Ariz., and Sens. Edward Kennedy, D-Mass., and Thomas Carper, D-Del., raised concerns that the Air Force may have given Boeing assurances it would keep production going on the cargo plane, which has enjoyed significant congressional support over the years.

In March, Boeing said it would shut down C-17 production lines if Congress did not step in and buy more planes. Three months later, the aerospace giant announced that it would invest its own money to keep the C-17 lines open.

Citing a June 19 Boeing statement that there are "increasing signs that the U.S. Air Force has requirements for 30 additional C-17s," the senators said they feared Air Force optimism spurred Boeing to avert a production line shut down.

"The Air Force has informed us that it does not intend to request funding for additional C-17s in next year's budget," they wrote. "We are therefore disturbed by the possibility that the Air Force may have induced the prime contractor into assuming the business risk of covering the costs of keeping long-lead-time parts available -- ostensibly to ensure the continuity of the C-17 production line until new Air Force orders materialize."

Doing so would be "inappropriate, especially if it exposes taxpayers to liability in the event that Congress declines to purchase additional C-17 aircraft," they added.

The senators asked Gates to clarify his plans for the C-17 and requested he respond by July 30 to several questions -- including one seeking the department's "official position on the Air Force's apparent communications" with Boeing.

An Air Force spokesman said Monday the service is aware of the letter, but added that it would be "inappropriate" to comment.

"The Air Force stands by ready to assist [the Defense Department] in their response to ... the senators," the spokesman said. "The Air Force is committed to transparency and accountability in all of our major weapons system acquisition programs."

A Boeing spokesman said he could not comment on communications between Congress and Gates.

The Air Force did not request any funding for new C-17s next year, but gave Congress a list of "unfunded requirements" -- priorities it could not fit into the fiscal 2008 budget -- that includes $472.8 million to buy two C-17s.

Air Force leaders have argued they could buy more C-17s if Congress would lift restrictions preventing them from retiring C-5 Galaxy cargo aircraft. The Air Force would like to retire 30 older C-5s, which are twice the size of the C-17, but far older. And service leaders have not been shy about declaring the versatile C-17 a more valuable asset than the C-5.

Kennedy and Carper are part of a small, but vocal, coalition of C-5 backers who fear buying more C-17s would put the Galaxy's modernization at risk. McCain, who successfully challenged a now-defunct Air Force lease agreement for Boeing KC-767 aerial refueling tankers as a bad deal for taxpayers, continues to cast a suspicious eye on both the service and the aerospace giant.

The House-passed fiscal 2008 defense authorization bill includes $2.4 billion to buy 10 C-17s, which supporters say are needed to transport the influx of troops in an enlarged Army and Marine Corps. But the Senate Armed Services Committee's version of the bill does not have money for more C-17s.

House appropriators plan to follow House authorizers in September, when they consider the fiscal 2008 wartime supplemental spending bill. Meanwhile, Senate Defense Appropriations Subcommittee Chairman Daniel Inouye, D-Hawaii, said in an interview in March that he prefers buying more C-17s.

Justice Dept. Drops the Ball Again

There MAY be a rational reason for this, but with the current environment and the growing amount of corruption and pandering surrounding government agencies and industry, this does not inspire confidence in any capability of our current Justice leadership to do right by the American people. It just looks like more graft and corruption.

-G.F. Scott

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Justice Dept. drops massive fraud case

By Marisa Taylor | McClatchy Newspapers

WASHINGTON — Two years into a fraud investigation, veteran federal prosecutor David Maguire told colleagues he'd uncovered one of the biggest cases of his career.

Maguire described crimes "far worse" than those of Arthur Andersen, the accounting giant that collapsed in the wake of the Enron scandal. Among those in his sights: executives from a subsidiary of Berkshire Hathaway, the investment empire overseen by billionaire Warren Buffett.

In May 2006, he felt strongly enough about his case that he prepared a draft indictment accusing executives from a Virginia insurer, Reciprocal of America, of concocting a series of secret deals to hide its losses from regulators. Although he didn't name anyone from Berkshire Hathaway's subsidiary, he described the company as a participant in the scheme.

But Maguire never brought those charges.

Months after preparing the draft, he was removed as the lead prosecutor on the case and reassigned.

His replacement, a prosecutor who hadn't been involved in the case until then, soon announced that the Berkshire Hathaway subsidiary, General Reinsurance, wouldn't be indicted. By April of this year, the entire investigation, which the Justice Department once hailed as one of the largest insurance-fraud cases in the history of Virginia, had fizzled.

Former employees and policyholders of the Richmond-based insurer were astounded. Why had the Justice Department spent upward of $2 million to investigate the case only to decline to prosecute? Maguire and his team of investigators had secured two related guilty pleas, interviewed dozens of witnesses and gathered 7,000 boxes of documents.

At the Justice Department, some whispered that Maguire and his team had overreached and had been knocked down. Others heard that the government needed resources for terrorism investigations.

Lawyers for the two companies had another explanation: Prosecutors realized they didn't have evidence of a crime.

"It was a black and white decision," said Stanley Twardy Jr., one of General Reinsurance's attorneys and a former U.S. attorney. "They just called it like they saw it."

But Tom Gober, a certified fraud examiner who worked on the case, thought investigators had gathered plenty of evidence.

Gober, a government-contracted investigator, concluded that the Justice Department had buckled under pressure from defense lawyers. Shortly before Maguire was removed, his supervisors were urging him to drop the case against General Reinsurance, Gober said.

Gober's suspicions were fanned by allegations of politicization in the Justice Department after nine U.S. attorneys were fired.

He took his complaints to the Office of Professional Responsibility, which investigates Justice Department misconduct.

"It just stinks," he said. "You don't come in out of nowhere and in no time kill three years of sophisticated effort."

Maguire and officials with the U.S. Attorney's Office and the FBI in Virginia declined to respond to questions about the decision.

Justice Department spokesman Bryan Sierra said he couldn't comment, either. "As with any investigation, circumstances change day to day, and in the end the decision was made not to charge certain defendants in this case," he said.

Internal documents that McClatchy Newspapers obtained show that Justice Department lawyers in Washington had become locked in an intense debate with Maguire over the case until he was removed from it.

The documents, together with court records and interviews, provide a rare look inside a corporate fraud case and the Justice Department's deliberations on whether to pursue an indictment.

Five years after Enron collapsed and tough measures aimed at white-collar crime were enacted, federal officials struggled with questions of corporate accountability:

Who should be held responsible when fraud leads to a company's demise? How far should federal prosecutors go in pursuing corporate suspects?

In the Reciprocal of America case, the fallout was clear. More than 80,000 lawyers, doctors and hospitals in 30 states lost their malpractice coverage. As they couldn't expect new insurers to cover them for past cases, some who were sued have claimed losses of hundreds of millions of dollars.

As doctors and lawyers faced bankruptcy, the victims of malpractice feared they'd never get their due.

Even so, prosecutors had to be certain that their evidence of wider wrongdoing justified the financial damage that an indictment could cause to General Reinsurance.

After the Enron scandal provoked an aggressive Justice Department crackdown on corporate fraud, federal courts made it clear that the department had overstepped its authority in several high-profile cases. The pendulum appeared to be swinging back in favor of corporations.

A COMPANY UNDER SIEGE

A team of state insurance auditors arrived at Reciprocal of America's headquarters in January 2003 to launch their investigation. They shepherded the company's 300 employees into a conference room and locked the doors.

Suspicious accounting activity had been detected. The company and its subsidiaries were being shut down for the duration of the investigation.

As auditors carted away boxes of documents and computers, several employees burst into tears.

Federal agents soon expressed interest in joining the case. The auditors had found troubling numbers.

Insurance companies are supposed to avoid insolvency by socking away vast surpluses collected from policyholders' premiums and passing risk to giant reinsurance counterparts such as General Reinsurance.

The more risk the reinsurer carried, the higher the premium it would collect. When the arrangement worked, both companies prospered.

But Reciprocal hadn't accumulated the surplus required by law. Even worse, it was more than $450 million in the hole, according to regulators.

Year after year, millions of dollars in losses somehow had been concealed from regulators.

The company wouldn't be delivering on its promises to policyholders anytime soon.

Dr. Joel Schroeder of Olathe, Kan., lost his coverage when he needed it the most.

The family of Bertha Walker, who'd died of a stroke at 71, had filed a medical malpractice lawsuit against him. The suit dragged on for five years, until a judge awarded her family $750,000 in damages.

Schroeder said he could pay only about $10,000. He's now suing his insurance broker for selling him the Reciprocal policy. The Walker family, however, may never collect.

The whole ordeal probably would have been avoided if he'd had coverage, said Schroeder, who's since signed up with a new insurer.

"There's a chance that a settlement could have been reached before trial," he said. "But I didn't have enough money to offer a settlement that the family would accept."

Greg Mitchell, an attorney for 25 Kentucky hospitals and former policyholders with Reciprocal, said the Justice Department's decision disappointed his clients because the loss of coverage had hurt many of them financially.

State insurance commissioners in Virginia and Tennessee are suing former and current executives from Reciprocal and General Reinsurance in an attempt to collect damages. The federal suit accuses the companies of participating in a fraudulent accounting scheme similar to the allegations that federal authorities investigated. The judge preliminarily dismissed many of the claims, but allowed the plaintiffs' attorneys to prepare a new complaint.

"It's been a very bad saga," Mitchell said of the Justice Department's decision. "We were advised it was worth the effort to cooperate. After all that cooperation, nothing happened."

Reciprocal's surplus began to erode in the late 1990s, when medical malpractice awards shot up. Desperate to pump up the surplus, the company's executives asked General Reinsurance to assume millions more in risk.

The Berkshire subsidiary agreed, according to documents from both companies. General Reinsurance, known as "Gen Re," treated the unusual transactions as "side" or "unenforceable" deals. Its executives referred to one deal as an "off balance sheet loan," according to internal documents.

Maguire included details of the deals in his draft indictment as part of the alleged accounting-fraud scheme designed to help Reciprocal falsely inflate its surplus and hide its losses from regulators.

As Reciprocal of America continued to lose money, executives from the company and General Reinsurance took trips together aboard a yacht, the Scottish Lass. They dubbed their outings on the Chesapeake Bay their "Chesapeake Audits," according to the pending lawsuit.

In pursuing suspects, regulators and FBI agents sifted through thousands of e-mails and memos. The trail led straight to Reciprocal President Kenneth Patterson and his executive vice president, Carolyn Hudgins.

Investigators found evidence that the pair had manipulated the company's accounting records to conceal losses, and urged the pair to admit their guilt.

In February 2005, Patterson and Hudgins pleaded guilty to felony fraud charges. They agreed to cooperate with investigators. But agents soon became frustrated with the pair because they didn't appear to be divulging much detail. Corporate fraud cases were hard enough to prosecute because of their complexity. Without testimony from convincing cooperators, the case could be difficult to sell to a jury.

A federal judge sentenced Patterson to 12 years in prison and Hudgins to five years. Both declined requests for interviews.

That spring, Justice Department lawyers in Washington began to voice skepticism about proceeding against General Reinsurance. They pointed out that some of the evidence, which dated to the late 1990s, might be too old. They also warned that an indictment could hurt a major corporation unnecessarily.

"The bottom line has always been what do we want to do with Gen Re," Joshua Hochberg, the Justice Department's then chief of the fraud section, wrote to Maguire. "Indicting the company would have enormous collateral consequences."

Hochberg, who's no longer with the Justice Department, declined to comment.

Maguire pushed back, arguing that his team had plenty of evidence that demonstrated a pattern of fraud over more than 15 years.

"Gen Re has been a public menace for a long time," he wrote colleagues. "Their 'I'm not my brother's keeper' attitude has enabled them to make millions by 'aiding and abetting' bad guys."

At the very least, Maguire argued, the department should impose a fine of up to $600 million. "If they balk, they should know that we are more than ready to indict Gen Re," he wrote.

SOME SETBACKS

Two weeks later, the Supreme Court dealt the government a major setback in its pursuit of corporate fraud by throwing out the Justice Department's conviction of Arthur Andersen for shredding documents in connection with the Enron scandal.

The Justice Department decided not to retry the case. By then, Arthur Andersen had collapsed.

General Reinsurance's lawyers hired their own experts to counter Maguire's view of the case in briefings with Justice Department lawyers.

While they acknowledged that General Reinsurance might have entered into "handshake deals" with Reciprocal, they described them as harmless and the industry norm.

Ronald Olson, an attorney for General Reinsurance and a director on Berkshire Hathaway's board, argued that his client was a victim of Reciprocal's fraud. After Reciprocal collapsed, General Reinsurance lost millions from the deals, he said. It later banned "side" deals as a bad business practice.

"There was no knowledge at Gen Re that people at Reciprocal of America were hiding information from regulators or auditors," Olson said.

He now describes the criminal case as "maybe the longest investigation I remember being associated with. We were extremely frustrated."

FBI agents urged Maguire in May 2005 to proceed at least with an indictment against John William Crews, Reciprocal's general counsel, who'd co-founded the company in 1977, according to internal documents.

Maguire and the agents believed that Crews had participated in many of the meetings with General Reinsurance and had received memos and e-mails about the companies' relationship.

Crews and his law firm also had collected more than $63 million in legal fees from Reciprocal of America and its subsidiaries, according to allegations in the pending lawsuit.

Nonetheless, the threat of indictment remained very real to General Reinsurance.

Authorities had launched a separate investigation of General Reinsurance's relationship with American International Group, the largest U.S. insurer. The probe resulted in the ouster of Maurice "Hank" Greenberg, the chief executive officer and president of American International Group. The New York Attorney General's Office later sued Greenberg, accusing him of misleading investors. That suit is still pending.

Under pressure by the New York attorney general, the Justice Department and the Securities and Exchange Commission, Buffett agreed to talk to regulators, although investigators said he wasn't a target.

In February 2006, three former General Reinsurance executives and a former American International Group executive were indicted on charges of manipulating financial statements.

As Maguire considered indicting Crews in June 2006, a federal judge who was overseeing a massive tax case against accounting firm KPMG slammed the Justice Department as violating the Constitution "it is sworn to defend" by pressuring the firm to stop paying for defense lawyers for its employees.

"Those who commit crimes — regardless of whether they wear white or blue collars — must be brought to justice," U.S. District Judge Lewis Kaplan wrote. "The government, however, has let its zeal get in the way of its judgment."

The ruling reverberated throughout the legal community, prompting the Justice Department to soften its prosecution policies.

Within months, Maguire was removed from the Reciprocal of America case.

His replacement, Assistant U.S. Attorney Michael Gill, quickly set a new tone. In his first meeting with the team last fall, he called General Reinsurance's lawyers to tell them that no case would be brought against their clients in connection with Reciprocal.

Worried that Gill also might kill the investigation of Crews, FBI agents assigned to the case prepared a memo detailing their strongest evidence against him. Gill, however, decided this spring not to indict Crews either.

Crews' lawyer, J. Jonathan Schraub, said his client wasn't indicted because he never did anything illegal.

"There are many reams of allegations," Schraub said. "None of them are valid."

Gober, the certified fraud examiner, refused to let go. He wrote Deputy Attorney General Paul McNulty in February to ask for an explanation. McNulty, who'd overseen the case as U.S. attorney for the eastern district of Virginia until his promotion in November 2005, never replied. McNulty is due to leave the department soon.

(Tish Wells contributed to this article.)

Posted on Mon, July 23, 2007

2007 McClatchy Newspapers

Venture Itch's post and Mr. Gerald Eastman's Response

What follows is an example of what happens to a whistleblower after his situation is very briefly and incompletely covered in a few newspaper articles, which are picked up by editors or posters in newsletters, blogs, message boards etc.  Not having full knowledge of the case, the writers often treat it lightly turning it in to a joke, as this one did, or sometimes make unsupported assumptions about the content of the whistleblowing complaint, the motivations or intent of the whistleblower, or even the legal details of the case.    The editor of this Venture online publication apologized and asked for better information to be sent to him.  After the original Venture post, please read Mr. Eastman’s response. 

Venture Itch Posting and then Mr. Eastman’s comments about it.  7-22-07

Thelastinspector.com - whistleblowing has consequences

Posted on July 11, 2007
Filed Under Venture News |

When Gerald Eastman, a former Boeing quality-assurance inspector, has decided to wage war against his former employer Boeing Co. on the pages of his website Thelastinspector.com, he could hardly imagine that his personal crusade might land him in federal prison for five years. Now Gerald Eastman is charged with theft of 300,000 pages of confidential Boeing documents found on the hard disk of his computer.

Four things to remember when you decide on career of whistleblower:

1. don’t forget to clean your hard disk;
2. get a good lawyer before, not after;
3. going against large corporation may ruin your life;
4. whistleblowing motivated by personal vendetta for being fired is slippery slope.

Now the website name, The Last Inspector, sounds rather ironically. Gerald, you should not watch The Last Samurai.

Here is the comment of Gerald Eastman.

Mr. Eastman Responds:

Whomever posted the original post has some serious inaccuracies in their statements. I was not waging war against my former employer. I was simply continuing my attempts that began in 2002, four years before I was fired, to bring fraud in my department of quality and safety assurance to an end despite Boeing and the police department’s unwarranted actions against me. If you know Boeing, you learn very early not to underestimate their will to perform anything and everthing they want in order to retaliate against anyone in their way as far as their own continuing breaking of the law goes.

Clean your hard disk? Boeing headquarters was well aware I was bringing home data for my reports to the FAA and other oversight agencies.

Boeing Legal also tacitly approved my going public with any info I had as they were unwilling to end the fraud themselves, and when I said I was going to go public, their last words to me were, “you gotta do what you gotta do.” They knew I was not going to drop the issue and I was going to go public with the data I had, which they (Boeing Headquarters Legal) never told me I could not have, or make public. Indeed, they appoved of and/or dared me to do so. They were so arrogant they thought they could weather any press that might result and still not reform Boeing internally absent the two CYA “micro-audits” they did of just my immediate work area that did not find or fix anything significant.

So I had no reason to “clean my hard disk.” As Boeing was well aware I had data and had not asked for it back or told me I couldn’t have it.

Getting a good lawyer is not easy in any circumstance unless you make CEO level income. I did look for lawyers off and on to help me, but none stepped up to the plate as they didn’t think the risk/reward ratio would get them the money they wanted fast enough.

#3 is a “duh” statement. I knew my job would likely be doomed once I first decided to go to the FAA. Sometimes you have to think of more than just yourself, especially when faced with the brazen and widespread fraud at Boeing in my department that was driven by management.

Again, my whistleblowing began in 2002 and still goes on today despite all their efforts to stop me. It was never driven by a personal vendetta. I could have had a job at Boeing forever if I did what my management wanted me to do and rollerstamped inspections off. However, I chose to protect strangers’ lives like yours by ignoring the danger to my own livelihood that seeking to protect your life by attempting to end this fraud would surely bring.

My website name is factually based and is not ironic. Boeing has been trying to “exterminate” their inspectors for so time. They have long sought to kill their independence, integrity, and drive to actually do their jobs. The next step is to just get them off of the payroll as they will essentially be doing nothing. Their actions against me, the last real inspector who worked at Boeing that I know of, are just a microcosm of their war against inspectors like me who understood the importance of our jobs and therefore tried to do them despite our corrupt management’s extreme efforts to get us not to. Once they “kill” me and have me locked up, they will have won their battle to illegally decimate quality assurance of Boeing airplanes.

Gerald Eastman
The Last Inspector 

Portland Business Journal and a Response

I found this article in the Portland Business Journal while
researching last night:

Portland Business Journal - August 21, 2006
http://portland.bizjournals.com/portland/stories/2006/08/21/story2.htm
l
Local whistle-blower goes after Boeing
Portland Business Journal - August 18, 2006 by Matthew KishBusiness
Journal staff writer
Cathy Cheney | Portland Business Journal

Attorney David Hollander is expecting his client's lawsuit to make
its way to a courtroom.
View Larger A federal judge will soon hear oral arguments in a
whistle-blower lawsuit that alleges Boeing Co. manufactured faulty
components at its Gresham plant for 737s and 747s that it sold to the
federal government.

Court documents allege the parts are "flight-critical" and make
hundreds of Boeing planes in operation "unairworthy."

"The allegations are pretty significant," said Neil Evans, the
Assistant U.S. Attorney following the case. "Whether or not they play
out, we'll have to see."

The suit was filed in 2002 by Cliff Berglund, an engineer who still
works at the plant. Boeing employs roughly 1,400 people at its 125-
acre plant in Gresham. The facility manufactures 400 different metal
parts, including engine mounts, gearboxes, landing gear beams, flap
tracks, flap carriages, flap support mechanisms and pilot control
systems.

In June, a federal judge denied a motion to dismiss filed by Chicago-
based Boeing. Simultaneously, the judge asked Berglund's attorney to
refile the lawsuit. Boeing has since filed a second motion to
dismiss.

The two parties will return to the courtroom in less than two months
to give oral arguments on the latest motion. If the judge denies it,
a trial date could be set. Legal experts said a trial could start
within a year.

Boeing spokeswoman Cindy Wall said the case is without merit.

"Our safety record is bar-none the best," Wall said. "We have
multiple inspection layers in our oversight process to prevent things
from slipping through the system and ever making it on a plane."

She did, however, confirm that an audit at the Gresham plant a few
years ago turned up a problem on the assembly line.

"That non-conformance was corrected," she said. "That's how our
process works."

She added that the parts involved in the non-conformance issue were
still flight-worthy, they just did not meet Boeing's highest
standards.

Nonetheless, the attorney for the plaintiff said he's got a rock-
solid case.

"Unless it's settled or somebody files a motion for summary judgment,
in all likelihood this case will go to trial," said David Hollander,
a partner at the Portland law firm of Hollander Lebenbaum &
Gannicott.

The lawsuit was filed under the False Claims Act, which allows
private citizens to initiate lawsuits on behalf of the federal
government. It alleges that from at least 1996 to 2003, Boeing
neglected a critical step in the manufacturing of airplane parts
because the process "took too long, cost too much, and jeopardized
aircraft delivery dates."

The parts in question include the flap carriages that move wings up
and down and the mounts used to affix engines.

The lawsuit further states the parts were installed on numerous
planes sold to the U.S. government as well as hundreds of planes sold
to foreign governments. It does not specify whether the parts were
installed on planes sold to the private sector.

It claims that at least 17 "in-field" failures of aircraft have
resulted from the defective parts, including one accident that
involved a foreflap breaking free from a plane and creating a hole
the size of an executive's desk in the plane's fuselage.

Wall said Boeing had knowledge of the 17 accidents, but added, "They
are not related to these allegations at all."

In June of last year, the federal government declined to intervene ,
a point Boeing says is evidence of the case's frivolousness.

In all whistle-blower cases, the Department of Justice has the option
to assume the plaintiff's position. If it does, it takes a bigger
share of any settlement received. If it declines to participate, it
retains the option of joining the case at a later stage.

Legal experts, however, said the case shouldn't be considered
frivolous just because the U.S. Attorney isn't taking over. Evans
said he'll be sitting in the back of the room for all future court
dates in case his office decides to get involved.

"It's impossible to speculate why the U.S. Attorney would decline to
pursue a case more publicly," said John Kroger, a professor at Lewis
& Clark School of Law. "They could be working on a case but not
disclosing it. They could have decided that the case doesn't have
merits. They could have decided the case is interesting, but they
don't have the resources to pursue it."

For some, the fact the lawsuit is going forward means it must have
merit.

"It probably means the plaintiff's lawyers feel it is a strong case,"
said Stephen Kohn, an attorney and chair of the National
Whistleblower Center, a not-for-profit based in Washington, D.C. He
noted the federal government passes on nine out of 10 whistle-blower
cases.

The lawsuit seeks a civil penalty of roughly $10,000 for each faulty
part sold to the government. As with all whistle-blower cases,
Berglund and his attorney would share roughly 25 percent of any
settlement received by the federal government. That percentage would
be roughly cut in half if the federal government gets involved.

Experts said the plaintiff's share of any settlement could easily
approach seven-figures.

"It's not uncommon for a whistle-blower to get judgments that net
well over $1 million-plus for these cases," Kohn said. "Sometimes
it's $10 [million], $15 [million], or $20 million or more."

Berglund joined the company as an engineer in 1978 and had
responsibility for planning the manufacture of aircraft parts and
assemblies. According to a retaliation claim filed as part of the
case, he was fired in September 2003 after the company learned of the
suit. He has since been rehired.

"We contend that his terms and conditions of employment have changed
even after he was reinstated," Hollander said.

Boeing has not filed a motion to dismiss the retaliation claim, but
Boeing spokeswoman Wall said the company would fight it in the later
stages of the lawsuit.

Boeing has a market cap of $60.7 billion. It employs roughly 153,000
companywide, according to its most recent annual report.

mkish@... | 503-219-3414

----------------------------------------------------------------------

flyover_27's response to the PBJ:

7-22-07

This is what happens when, if the allegations are true, a company
tries to cut corners, tries to enhance the bottom line for the
stockholders and the CEO's at the expense of the quality of the
product or the work done, and at the expense of public safety. Just
think if instead of a concerned employee who was trying to prevent
something from happening that would have been harmful to the public
and military, as well as his company, it had been a well trained
foreign intelligence officer, who had access to federal defense
projects using slipshod information security protection? This does
not exactly inspire confidence in this company from me.


Regarding another whistleblower story, you’ve printed information about in the past,

I believe there is more to the Gerald Eastman story than you've been told. I
first encountered Mr. Eastman's website thelastinspector.com about 6
months ago while researching whistleblowers for my blog on the same
topic at both TypePad and Yahoo, for those who want to read what I've
found out. And I believe there are a bunch of other things going on
(other whistleblowers, and even problems in government contracting)
that are making the company very very edgy. (Not enough to clean up
their act, as they were given a chance to do however -remember the
$615 million dollars in fines and the promise they had to make sure
that this type of thing, (fraud) would never, ever happen again? In
return the company was not made to admit they'd done anything wrong,
and was not barred from bidding on or being awarded government
defense contracts for a period of time at least, (if not for all
eternity), as is possible, if policy and law are strictly followed.


I believe Mr. Eastman, (upon observing some major things affecting
airplane safety, including alleged faulty parts, fraudulent
inspections, failure to fix things noted by inspectors before
delivering the products), tried to use every step of the process
available to him, starting at the lowest level and moving up a step
at a time, ending up at the highest management levels within the
company, to no avail. He even went to the FAA, who is supposed to be
the watchdog here, but they appear to possibly be corrupted too.
(Ask yourself - when inspectors have to rely on the Attorney Generals
office to support taking things to trial and prosecuting (what a
novel idea), and the company is a "friend, read that contributor" to
the members of the executive branch, how effective that will be? In
any case, I believe Mr. Eastman was trying to keep some proof of the
wrongdoing, which he got in the computer system he was given access
to by the Boeing Company as a part of doing his job, as he was trying
to go above the FAA to the OIG (Office of Inspector General) with his
concerns of airplane safety to both the American public and the
military who may well fly in those planes. The company was trying to
make all of this go away in the mean time, including it appears, the
documented evidence and Mr. Eastman.


I've been told by several sources the company has been turning over
every rock, trying to find out who is talking to federal
investigators and is trying to shut them up, for what that is worth.
I fear Mr. Eastman, who may well be the least of their troubles is
the scapegoat.


I hear there are several other investigations, some not publicly
known yet, but one reported by the U.S. House Committee on Oversight
and Government Reform. Apparently this defense contractor may very
well be on thin ice. Read my blog (http://360.yahoo.com/flyover_27)
for more information on some of these other situations as well as
what I've been able to discover about Mr. Eastman's situation. It
will be most interesting to see what happens, and I do encourage
people to support Mr. Eastman to assure truth and justice prevail,
and the American public is also protected in the air or on the
ground.