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

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.

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

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.

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

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

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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.