Pentagon to Probe Air Force Pacts Influenced by Ex-Boeing Official

The Wall Street Journal 02/15/05
author: Andy Pasztor
(Copyright (c) 2005, Dow Jones & Company, Inc.)

The Defense Department's top weapons buyer ordered investigations into eight more Air Force contracts valued at about $3 billion after a preliminary review revealed they were "unduly influenced" by now-disgraced former acquisition official Darleen Druyun.

The decision shows the continuing level of concern inside the Pentagon over Boeing Co.'s dealings with Ms. Druyun, the former Air Force acquisitions official who later went to work for Boeing and now is serving a prison sentence for holding improper employment talks with the company. Four Boeing contracts -- ranging from sensors for military weather satellites to maintenance of aerial-refueling tankers -- were among those identified for further investigation yesterday by Michael Wynne, the Pentagon's acting procurement chief.

The latest move offers a bit of good news for Boeing, since no specific improprieties were announced and the follow-up investigation was referred to the Pentagon's inspector general rather than federal prosecutors. Still, every new inquiry threatens to fuel additional scrutiny from lawmakers and complicate the company's efforts to resolve its legal problems, including the one sparked by Ms. Druyun's courtroom admissions of favoritism toward the company. Boeing has hired a high-powered legal team to begin settlement discussions, and Justice Department officials have expressed a willingness to talk.

Officials said the report, which wasn't publicly released, describes points when Ms. Druyun deviated from normal contracting steps. It doesn't describe criminal behavior, though further investigation will focus partly on Ms. Druyun's justification for her actions. Yesterday's move also raises new questions about Ms. Druyun's contacts during the same 1998-to-2001 time frame with Lockheed Martin Corp., which won two of the other contracts under scrutiny, involving training for F-16 jet fighter squadrons and upgrades of C-5 cargo aircraft.

Reiterating that Boeing wants to cooperate with all investigations, spokesman Dan Beck said that as "new problems turn up, we have the will and the process to fix them." Lockheed Martin said it "will fully support" the new investigations but "there are no indications or suggestions" the company did anything inappropriate.