WhistleblowerSupporter

Former Boeing Engineer Found Guilty of Spying for the PRC (China)

Visit Andrea James' blog at the new online Seattle Post Intelligencer and read her comments on the trial of a PRC spy who infiltrated Boeing.  Even more enlightening, read the reader comments that follow the article.

http://blog.seattlepi.com/aerospace/archives/173894.asp

Boeing Whistleblower, Gerald Eastman, on Corporate& Government Corruption and the Need for Change

Gerald Eastman urges employees of industry to write to the incoming Obama/Biden President/Vice President Elect’s offices to request true whistleblower protections are put into place immediately for all whistleblowers, industry employees or government employees. 

This post is on fire.  After all of the pain and trouble Mr. Eastman has had to go through after trying to make his former employer, Boeing, fly straight, and having them target him for destruction, he’s really found his voice here.  You will want to read it.  Here is the link to that specific entry:

http://eastmans.web.aplus.net/pblog/index.php?entry=entry090104-214935

Or you can go to his website: http://www.thelastinspector.com

Boeing 737 Inspections ordered due to possible faulty fuel pump wiring

Link to Original  Full Story:  http://seattlepi.nwsource.com/printer2/index.asp?ploc=t&refer=http://seattlepi.nwsource.com/business/388557_boeingfuelpump20.html

FAA orders some 737 inspections

Last updated November 19, 2008 5:23 p.m. PT

By JAMES WALLACE
P-I AEROSPACE REPORTER

The Federal Aviation Administration has ordered emergency inspections on some next-generation Boeing 737s because of possible faulty fuel pump wiring that could lead to a fire or explosion of the fuel tank.

Gerald Eastman Responds 11-19-08

Thanks, flyover_27, for highlighting my case. I still can say "bad" things about the company, as long as they are the truth. I have never strayed from telling the truth, and my blog, accessible from my website, is pretty hard hitting, most recently pointing out that not only former Assistent Attorney General Paul McNulty perjured himself before congress, but Boeing's CEO Jim McNerney did as well, knowingly (most likely) or not. I just can't give out the details of what Boeing and their counsel ask me in their interviews. True, Boeing did ruin my life in an effort to go on the offensive agaunst one of their most "dangerous" (to their fraud) whistleblowers ever, trying to discredit me and imprison me in the process using illegally gathered "evidence" against me. Had I been convicted, corrupt Boeing management would have had one of their grandest back slapping parties ever in celebration, knowing they had imprisoned a whistleblower on their own crimes, knowing it was they who should have been imprisoned themselves for far worse crimes they committed than I was even accused of. Arrogant? Yes. But they do have a lock on the most arrogant, incompetent, and criminal management since Enron went down in flames.
 
Thanks again
 
Gerald Eastman
 
The Last (Boeing) Inspector
 
www.thelastinspector.com 

 

Boeing Responses to Seattle PI Questions

From The Seattle P.I.

http://seattlepi.nwsource.com/printer2/index.asp?ploc=t&refer=http://seattlepi.nwsource.com/business/323843_boeingqa117.html

http://seattlepi.nwsource.com/business/323843_boeingqa117.html

Boeing responses to questions: Round one

Last updated July 16, 2007 10:08 p.m. PT

Before providing executives for interviews, The Boeing Co. asked the Seattle P-I to outline its questions in written form. The P-I submitted two rounds of questions, which are displayed here along with the company's official responses.

Boeing's summary statement:

Follow links to read full response to questions.

The Seattle P.I.

http://seattlepi.nwsource.com/printer2/index.asp?ploc=t&refer=http://seattlepi.nwsource.com/business/323842_boeingqa217.html

http://seattlepi.nwsource.com/business/323842_boeingqa217.html

Boeing responses to questions: Round two

Last updated July 16, 2007 10:08 p.m. PT

These are the P-I's second round of questions and Boeing's written responses.

·  Some organizations, including Standard & Poor's, encourage full disclosure of deficiencies even though law does not require it. What factors went into Boeing management's decision not to discuss internal control deficiencies in its filings to the Securities and Exchange Commission?

Follow links to read full response to multiple questions. 

Boeing Whistleblower, Gerald Eastman, Review 11-15-08

Mr. Eastman endured two trials if one can call them that.  Boeing settled in an odd agreement requiring Mr. Eastman not to say bad things about the company, and to agree to undergo several what is turning out to be long interrogations from Boeing managers and legal.  He is still enduring retribution and harassment from Boeing and trying to put his life together that Boeing turned upside down and backwards.    See his website:  http://thelastinspector.com

-GFS

****************************************************************************************

Internal Boeing Documents Support Whistleblower's Allegations: Aircraft Quality Control Problems Cited

May 8, 2008

Internal Boeing documents obtained by the Project On Government Oversight show that the allegations of a former Boeing quality control inspector facing criminal charges have merit.  Quality control problems at Boeing increase the likelihood that defective aircraft parts end up on planes and flaws in the manufacturing of planes remain uncorrected.  This can potentially threaten public safety and drive up the cost of aircraft maintenance. These documents are linked at the bottom of this release.

Gerald Eastman, the former Boeing inspector, is facing a second trial of criminal charges for disclosing Boeing information to the press.  His first trial last month resulted in a mistrial when jurors could not agree on whether Eastman committed "computer trespass."  Mr. Eastman claims that his involvement with the press stemmed from the lack of corrective actions taken by Boeing and the government in response to his disclosures of wrongdoing to them.

An internal Boeing memo sent to Boeing employees in October 2000 stated that misuse of "production stamps" or "roller-stamping" can result in negative consequences for the company and the individual misusing their stamp.  Roller-stamping is the misuse of production stamps to stamp work on critical parts and assemblies as complete and fully inspected when there has only been a cursory inspection, if one at all, of the part or assembly in question.  Eastman's central claim is that he had perceived widespread "roller-stamping" and Boeing did little to curtail the practice.

"These documents show that Eastman clearly had a reasonable basis for his belief roller-stamping was occurring," according to Nick Schwellenbach, POGO investigator.  "It's one thing to break company policy on releasing documents and getting fired, it's another matter to file criminal charges.  Who do the prosecutors work for?"

The Boeing memo came months after the Federal Aviation Agency conducted a special technical audit of Boeing that concluded that there were systemic quality control problems.  The 2000 FAA special technical audit found "in some cases, manufacturing planning was not adequate, requirements were not followed, inspections were not specific, or personnel were not knowledgeable about requirements."  Thus, "parts, assemblies, and installations are released through the system that do not conform" to approved designs.  Also, in 2000, the FAA proposed "a record $1.24 million in civil penalties against Boeing for inadequate supplier oversight and for failing to quickly report cracked parts on two older jetliners," according to a news report (James Wallace, "FAA Audit Rips Boeing Over 100 Production, Design Problems Detailed; Company Plans Corrective Action," Seattle Post-Intelligencer, August 11, 2000.). 

Years later, roller-stamping was still occurring when Eastman acted on his concerns.

Boeing certainly was aware of the practice because a Boeing document dated January 2004, states that, "There appears to be a systemic issue within BCA [Boeing Commercial Aircraft] involving parallel process breakdowns of mechanics and inspectors involved in assembling and inspecting aircraft, assemblies and parts."  The 2004 document also states that the FAA examined 55 issues at Boeing between 2002 and 2003 and found that "24% of these issues have involved instances where the mechanic and inspector created and accepted nonconforming conditions"—i.e. roller-stamping.

In further support of Eastman's claims, other Boeing employees became whistleblowers when they reported that Boeing supplier Ducommun was regularly supplying non-conforming parts to Boeing, according to the whistleblowers' False Claims Act lawsuit obtained by POGO.  Now-former Boeing employees Taylor Smith, Jeannine Prewitt and James Ailes were then retaliated against by management because Boeing allegedly did not want to deal with the repercussions of their findings. 

For additional information

Boeing Commercial Airplane Group memorandum, "Use of personal stamps in our production system," October 31, 2000.

Federal Aviation Administration, "Special Technical Audit of Boeing Commercial Airplane Group," December 1, 1999, through February 11, 2000.

Boeing Airplane Program Systemic Issues Chartered Team 1, "Investigation of 'Dual Failures,'" January 2004.

United States of America ex rel Taylor Smith, Jeannine Prewitt and James Ailes vs. The Boeing Company and Ducommun, Inc., Federal District Court of Kansas. Filed on March 11, 2005.   

Founded in 1981, the Project On Government Oversight (POGO) is an independent nonprofit that investigates and exposes corruption and other misconduct in order to achieve a more accountable federal government.

# # #

Boeing and Sarbanes-Oxley: A Notable Trainwreck

Here are some articles and link to the Seattle Post Intelligencer and the work of Andrea James, and others.  -GFS

 

 http://seattlepi.nwsource.com/boeing/sox/

Boeing struggles with Sarbanes-Oxley

Sarbanes-Oxley is a wide-ranging law aimed at preventing stockholder rip-offs like the Enron scandal from happening again. Among its requirements, it forced public companies like Boeing to shine a light on their internal controls. It must show it has checks and balances on people and computer systems to guarantee accuracy of financial statements.

The P-I provides a rare glimpse into Boeing's struggles with Sarbanes-Oxley compliance in its information technology department.

Computer security faults put Boeing at risk
For the past three years, The Boeing Co. has failed, in both internal and external audits, to prove it can properly protect its computer systems against manipulation, theft and fraud.

Businesses say accounting reform costly, onerous
Sarbanes-Oxley was passed as a tool to restore honesty to corporate behavior and reassure investors. But many businesses say it's onerous and costly and hurts U.S. competitiveness.

Boeing has been stung by internal theft before
Information security controls are meant to do a lot more than stop hackers and kill computer viruses -- especially because corporate fraud comes from within. Internal fraud can happen to any size firm -- even tech-savvy Boeing.

Boeing responds
Before providing executives for interviews, The Boeing Co. asked the Seattle P-I to outline its questions in written form. The P-I submitted two rounds of questions, which are displayed here along with the company's official responses:
- Round One | Round Two

Follow-up articles

The world of audit contracts is in the money
Some folks familiar with the world of regulatory compliance have joked: Those who can, do. Those who can't, audit. Perhaps those folks should add, "and make gobs of money." A look at the high-stakes arena of audit contracts.

SEC unanimously votes for new rules to lower audit costs
Nearly five years after the passage of a sweeping corporate accounting reform law, the U.S. Securities and Exchange Commission threw a lifeline to public companies by voting to accept new rules that would lower audit costs.

Boeing worker says he was fired for talking to P-I
The Boeing Co. fired at least one employee Friday for having a conversation with the Seattle P-I in July, the employee said.

Boeing bosses spy on workers
Reading private e-mails, following workers, collecting footage of them -- it's not the latest Bond flick, but rather how The Boeing Co. investigates its employees, the P-I has learned.

Progress made in computer compliance, Boeing says
The Boeing Co. has told the Seattle P-I, in response to questions, that it is making progress on its Sarbanes-Oxley compliance testing in its information technology department, despite auditor turnover.

Boeing damages to be paid to ICO grow

Jury:  Boeing must pay $462 million in damages to satellite firm ICO

A Los Angeles jury today awarded $462 million in damages to a satellite company in a dispute against Boeing Co. over canceled plans for a satellite network that could beam TV programming and other services to mobile users around the globe.

ICO Global Communications Inc., whose chairman is cellular phone billionaire Craig McCaw, accused Boeing of thwarting its plans to build the network. The verdict doesn’t include punitive damages, which the jury is expected to take up next week.

ICO attorney Barry W. Lee said he was “generally” pleased with the verdict, which came after more than a month of jury deliberation, but reserved further comment until punitive damages were determined.

Boeing said in statement that it would appeal the verdict, which it described as having errors and suggested that the case might “well take several years to run its course.”

“There were fundamental errors in the conduct of the trial. There were fundamental errors in the instructions to the jury and in the court’s interaction with the jury during the deliberations,” Boeing general counsel J. Michael Luttig said. “We thus have significant grounds for appeal.”

The initial award calculated by the jurors Tuesday was actually much higher at $742.2 million, but Judge Emilie H. Elias said after the jury panel had left the court that the jurors had made an error in arithmetic and she reduced the damages to $462 million.

Adding to the complexity of the case, Boeing lawyers contended after the courtroom was cleared late Tuesday that the actual damage award was $370 million and that the total already included interest and a separate $91-million award related to a rocket contract. ICO attorneys said interest and damages were separate and as such totaled $462 million.

The disagreement, which the jurors probably will have to resolve next week, was par for the course for one of the more convoluted contract cases in the aerospace industry.

Boeing, which denied any wrongdoing, originally sued ICO in 2004 after ICO terminated its contract for the satellites. ICO countersued, accusing Boeing of breach of contract and fraud, among other things.

ICO was seeking $1.5 billion in actual damages – more than $2 billion with interest – and unspecified punitive damages. The jury began deliberations Sept. 15 after hearing 2 1/2 months of testimony.

The court battle dates to the 1990s, when ICO contracted with El Segundo-based Hughes Electronics Corp. to build and launch a dozen satellites to support a global service for beaming such services as roadside assistance and navigation information to mobile users on earth.

Only two of the satellites were ever completed, and one of those was destroyed when the rocket carrying it into space exploded. The second made it into orbit, but is essentially useless on its own. The other 10 sit in a local warehouse in various stages of near-completion.

Boeing inherited the problem when it bought Hughes’ satellite business in 2000. At the time, ICO was struggling to emerge from bankruptcy protection with the help of investors led by McCaw, and the telecom industry was mired in a severe downturn.

ICO contends Boeing made matters worse by demanding that the company fork over an additional $400 million to finish the job it had originally hired Hughes to perform. At the same time, ICO alleges, Boeing was making its own inroads into the satellite-based communications business and now viewed ICO as a competitor – a claim Boeing denies.

In court, ICO attorneys alleged that Boeing wanted the company “dead and gone.”

Analysts say ICO is short of cash and could use money from a successful court battle to pursue its latest venture, which focuses on beaming TV programming from space to mobile-device users.

Initially, ICO hoped to sell its mobile broadcast service to people whose vehicles were already equipped with video devices, such as back-seat video players and front-seat navigation screens, said Patrick Comack, an analyst at Zachary Investment Research in Miami.

Eventually it wants to offer the service for laptops and cellphones, he said.

The company successfully launched a satellite this year that will provide the service for North American customers. But it needs to launch a backup bird soon, and also wants to get the warehoused satellites into orbit so it can expand the service to Europe and other regions. ICO also faces growing competition from services such as Qualcomm Inc.’s MediaFlo.

Zimmerman and Pae are Times staff writers.

 

martin.zimmerman

 

@latimes.com

 peter.pae@latimes.com

Boeing Issues Statement on ICO Verdict

Link to original:  http://www.smartbrief.com/news/aaaa/industryPR-detail.jsp?id=DCA3B75F-4D6F-4937-B4AF-CD11AD590873

 

 

CHICAGO, Oct. 21 /PRNewswire-FirstCall/ -- Boeing Senior Vice President and General Counsel J. Michael Luttig issued the following statement today after a Los Angeles jury rendered a verdict against the company in its defense of a breach of contract suit pressed by ICO Global Communications Holdings Ltd:

"I have directed that an appeal be taken from the decision rendered by the California jury today. That appeal may well take several years to run its course. But there were fundamental errors in the case as it was submitted to the jury. There were fundamental errors in the conduct of the trial. There were fundamental errors in the instructions to the jury and in the court's interaction with the jury during the deliberations. We thus have significant grounds for appeal."

ICO sued Boeing in Los Angeles Superior Court, alleging breach of a satellite network contract. Jury deliberations have continued since Sept. 15.

Boeing

CONTACT: Diana Ball of Boeing, +1-562-797-4303

Web site: http://www.boeing.com/

Boeing Must Pay Damages to ICO

Boeing Co. ordered to pay ICO $236M in damages

The Associated Press
2008-11-01 01:49:50.0

Link:  http://www.examiner.com/a-1667151~Boeing_Co__ordered_to_pay_ICO__236M_in_damages.html

 

LOS ANGELES -

A jury ordered the Boeing Co. to pay $236 million in punitive damages Friday for breaching a contract to build and launch satellites for a company headed by cellular phone pioneer Craig McCaw.

Boeing now owes at least $607 million to ICO Global Communications, including $371 million in compensatory damages the jury awarded last week. The total could top $700 million after the court adds interest, ICO said.

The jury's decision follows a four-week trial in which Reston, Va.-based ICO accused the aerospace giant of hindering the launch of its satellite network by fraudulently raising prices for the project.

Boeing "was extremely hurtful and harmful to the company and almost destroyed ICO," said ICO attorney Barry W. Lee.

Boeing spokeswoman Diana Ball said the company will appeal the case, citing "fundamental flaws throughout this trial." She said the process could take several years.

ICO's lawsuit, filed in 2004 in Los Angeles County Superior Court, stems from the company's decade-old plan to launch a fleet of satellites that would broadcast video and other services to mobile device users around the world.

ICO contracted with El Segundo-based Hughes Electronics Corp. in the mid-1990s to build and launch 12 satellites. Boeing acquired Hughes in 2000 and inherited the ICO contract, but only finished two satellites - one of which was lost because of a failure aboard a Boeing Sea Launch rocket.

ICO sued Boeing and its satellite division four years later over breach of contract after Boeing allegedly demanded ICO pay another $400 million to finish the job.

Ball said costs of producing the satellites increased as ICO tried to delay the project during a major slump in the telecommunications sector.

ICO attorneys argued during trial that once Boeing got into the satellite communications business, its former customer became a competitor. Boeing's attorneys argued the aerospace company attempted to keep the deal alive and accused ICO of canceling the contract for convenience.

The jury found Boeing acted with fraud and malice and awarded ICO $59 million from Boeing Satellite Systems, which is based in El Segundo, and $178 million from the Chicago-based parent company.

The judge will determine whether $91.6 million in compensatory damages related to a separate contract with the parent company is already included in the $371 million award or should be added to the total.

ICO, which McCaw and other investors rescued from bankruptcy in 2000, has said the money from Boeing will help pay for its international expansion plans and to put its 10 warehoused satellites into space.