With all of the information being posted which shows runaway contractors, fraud and corruption in contracts and in contract oversight and management, particularly in the area of defense contracts, it is interesting to note that currently, the Oversight of such contracts is under the purvey of The Defense Security Service (formerly Defense Investigative Service) who’s employees have the charge of fulfilling their agencies assigned mission to “protect classified information and technology in the hands of industry.” It would appear that DSS is broken and that this critical mission is no longer being accomplished. I checked with someone who had access to the laws and policies and found out the following:
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The National Industrial Security Program (NISP)

“DoD 5220.22-M, Chapter 1, Para. 1-101- Authority

The NISP was established by Executive Order 12829. The Secretary of Defense (SecDef) has been designated Executive Agent for the NISP by the President.

While the SecDef serves as the Executive Agent for inspecting and monitoring contractors, practical day-to-day administration of the program has been, and continues to be, the purvey of the Defense Security Service (DSS).

One of the responsibilities of the DSS is the administration of the Facility Clearance (FCL) program of defense contractors. DoD 5220.22-M, Chapter 2, Para. 2-102- Eligibility Requirements, Sub Para. c. stipulates “The company must have a reputation for integrity and lawful conduct in its business dealings.”

So why isn’t the Secretary of Defense and the Defense Security Service enforcing this requirement? They have the authority to revoke a defense contractor’s facility clearance and participation in the NISP until that contractor comes into compliance. It appears to be used very selectively on small defense contractors, but never as a compliance tool in large defense contractor transgressions.”
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So, current law does provide legal means to enforce expectations, policies, and laws regarding the actions of defense contractors, but the expectations, policies, and laws are not being enforced. In fact, over less than a decade, it has become decidedly out of control. It appears that Congress is going to have to stand up and take this to the mat, or it will never be wrestled back into control. It would appear the following must be done:

1. Corruption within and connected to the Executive, Judicial, and Legislative Branches must be confronted and routed.

2. Government Agencies must also be audited, removing first appointed managers who are either not doing the job required, or who are actively thwarting the employee’s efforts to do the oversight work ethically. This will include on an agency by agency basis, determining which employees are a part of the problem and those who may be paralyzed victims of the corruption and the corrupted managers and/or coworkers.

3. Congressional intervention into defense contractor influence pedaling and lobbying, must be accomplished and violations of current laws stopped.

4. The Government needs to step up to its role as the governing authority. Far too often contractors, defense contractors in particular have much too much influence into decisions that should be inherently governmental decisions. This is not to say that defense contractors should not have input into the process. However the final determination of policy needs to squarely rest on the shoulders of government.

5. Government employees who have oversight responsibilities must be uncompromised and independent of pressures either directly or indirectly applied from defense contractors or corrupted employees or managers within the government who are “owned” by those contractors.

6. The defense contracting community is its own best advocate. It does not need government workers or agencies advocating on its behalf. The government should not be trying to be the “friend” of industry. In business dealings, the government and industry, must maintain appropriate separation because of the legal oversight responsibility government has. There are currently laws and policies, which have been in place a long time to assure that the lines between contractor and oversight authority are clear and clean. However, those policies have in some cases been corrupted, and in others ignored, and in all cases where problems are evident have not been enforced.

Will all of this be easy? No, although the path that must be taken is clear. The heaviest weight in responsibility at this time, due to the level of corruption and dysfunction in the Executive and Judicial branches, falls squarely on the shoulders of the Legislative Branch. The Senate and House must stand up and do the right thing for our country.

VM
9-9-07

GAO Sustains 2nd Protest Over Rescue Helicopter Contract

(from Pogo.org, 9-8-07)

Yesterday, Lockheed Martin and Sikorsky prevailed for the second time in protesting the Air Force’s handling of the contentious $15 billion CSAR-X search and rescue helicopter contract. POGO has been closely observing a growing series of questions which plague the contract including internal emails which may reveal the Air Force intends to continue steering the contract to current winner Boeing, and questions whether Boeing's helicopter meets contract requirements for such issues as downwash brownout and deployability. Here’s the Government Accountability Office’s statement which is not yet on line.

NationalMonitor.org
July/August 2002 - VOLUME 23 - NUMBER 7&8

C o r p o r a t e R e f o r m A f t e r E n r o n

The Dormant
Power of the Purse
The Failure of the Government to Use
its Purchasing Power to Promote
Corporate Compliance with the Law
By Seth Morris

The U.S. government is the world's largest consumer. It spends more than $200 billion annually on goods and services, for everything from jet fighters to food services.

The Federal Acquisition Regulation (FAR) prescribes that these taxpayer dollars only be awarded to "responsible" contractors that have a satisfactory record of "integrity and business ethics," but frequently this regulation is honored in the breach.

The top 43 contractors of fiscal year 1999 received over 45 percent of all contract dollars awarded that year. In a year-long investigation, the Project on Government Oversight (POGO) compiled administrative, civil and criminal violations and alleged violations for these companies, using a wide variety of sources, and including cases and settlements where a company was found to be a responsible party, as defined under the Superfund legislation, for the cleanup of hazardous substances at Superfund sites. (Alleged misconduct here includes government claims against a company resulting in a consent decree or other settlement without admission of guilt or wrongdoing; it does not include allegations which did not result in such final agreements. In all, the investigation documents over 400 instances of misconduct and alleged misconduct committed by these contractors.

POGO found that, since 1990, fine/penalty, restitution, settlement and Superfund clean-up costs for the 43 top contractors totaled approximately $3.4 billion. Sixteen of the 43 contractors have been convicted of a total of 28 criminal violations; four of the top 10 have at least two criminal convictions. Only one of the 43 contractors has been suspended or debarred from doing business with the government. This suspension action, against General Electric's Aircraft Division, lasted only five days after the company pled guilty to diverting millions of dollars from the U.S. Foreign Military Aid Program to finance the sale of F-16 engines to Israel.

These findings almost certainly understate the extent of contractor misconduct, both because there is no comprehensive centralized database of corporate crime and misconduct, and because the government has in the last decade become much less aggressive in enforcing laws and regulations. Criminal enforcement of administrative referrals for federal procurement fraud, for example, fell from over 306 referrals in 1992 to only 102 in 1998. Prosecutions fell as well, with 36 percent of referrals prosecuted in 1992 and only 28 percent prosecuted in 1998, according to data compiled by the Transactional Records Access Clearinghouse (TRAC) at Syracuse University. The number of referrals for civil actions from federal agencies to the Department of Justice fell from over 35,000 in 1992 to only 6,324 in 1999, according to TRAC.

The Department of Housing and Urban Development referred 2,945 civil enforcement actions to the Department of Justice in fiscal year 1995, but only 69 in fiscal year 1999. The Department of Defense referred 489 civil enforcement actions to the Department of Justice in fiscal year 1995, but only 98 in fiscal year 1999.

Rolling back Responsibility
In July 1999, the Clinton administration proposed a "contractor responsibility" rule to address the issue of lawbreakers receiving federal contracts. The rule would have:

·required contracting officers to consider a prospective contractor's business record when awarding a contract;
·clarified that one element of a "satisfactory record of integrity and business ethics," according to the FAR, is compliance with the law; and
·required contractors to certify if they had been convicted of any felonies within the past three years, or had any felony charges currently pending against them, or had otherwise been found liable in a civil proceeding.

The proposed rule met with strident corporate opposition. "This rule gave government agents blanket discretion to blacklist federal contractors based on subjective and arbitrary notions of satisfactory compliance with any federal, state or even foreign law," says Randy Johnson, U.S. Chamber of Commerce vice president for labor, immigration and employee benefits.

Elaine Guth of the Manufacturers Alliance/MAPI, echoed this line, arguing that the rule was "overreaching, unconstitutional and failed to give due process to contractors."

As a result of intense lobbying by the business industry, the contractor responsibility rule had only a fleeting existence. Finally adopted by the Clinton administration on its last day in office, January 19, 2001, it was temporarily suspended by the Bush administration on January 20, suspended again on January 31, and then permanently repealed on December 27, 2001 [see "Controlling Corporate Scofflaws or Blacklisting?" Multinational Monitor, July/August 1999 and "Defending Contractor Irresponsibility," Multinational Monitor, May 2001.]

Bigger and Badder
Although public interest groups welcomed the contractor responsibility rule, current regulations provide the government with the needed authority to deny contracts to lawbreaking companies, even without the rule. This authority is lodged in both the general federal acquisition regulations, and in specific procurement and agency rules which authorize government officials to put irresponsible companies on a list of entities ineligible to receive government contracts.

The federal government annually takes suspension and debarment actions against hundreds of contractors and individuals. Some of these actions are taken against contractors for reasons other than a criminal conviction or civil judgment, such as civil settlements or default on a student loan. The one thing that these hundreds of suspension and debarment actions have in common is that they are almost always taken against small contractors.

Large contractors enjoy an unfair advantage over smaller contractors in navigating the federal government's suspension and debarment system. Larger contractors have the financial means, plus high-priced attorneys, that enable them to avoid suspension and debarment.

"Many of these large companies which continue to violate ethical and criminal laws possess the legal manpower and expertise to avoid serious penalties," says Rep. Albert Wynn, D-Maryland. "It is my concern that while these companies continue to contract with the federal government, small businesses who lack the funds and the ëlegal eagles' are put at a disadvantage when competing for federal contracts." Many of the largest federal government contractors have a record of repeat misconduct and alleged misconduct, yet the government continues to award them billions of dollars in contracts. The top 10 repeat offenders identified through POGO's investigation covering the period since 1990 are: General Electric, with 63 instances of misconduct and alleged misconduct and fines, penalties, restitution, settlements and clean-up costs totaling $982,859,555; Lockheed Martin with 63 instances of misconduct or alleged misconduct and $231,872,404 in payments; Boeing, 36 and $357,973,000; Raytheon, 24 and $128,652,919; Northrop Grumman, 21 and $87,876,581; Fluor, 19 and $70,016,614; United Technologies, 18 and $214,836,860; TRW, 16 and $389,484,000; AT&T, 14 and $16,090,000; and Unisys, 12 and $182,245,692 in payments.

On rare occasions, the federal government does suspend large contractors. The Navy suspended General Dynamics twice in 1985 for procurement fraud. The first suspension lasted five months and the second lasted two months. Also in 1985, the Air Force suspended General Electric for five months as a result of procurement fraud.

But inaction is the norm. A few years after GE's five month suspension, the Defense Department established an office specifically to handle GE violations because the Pentagon believed General Electric was violating laws at such a high rate. At the request of the Department of Defense Inspector General, the Philadelphia Remedies Unit was established within the Defense Contract Management Agency's Mid-Atlantic District on June 1, 1990. During the three-year existence of this unit, 163 investigative and 147 administrative matters were resolved, resulting in the government recovering a total of $221.7 million from General Electric on noncompliance matters.

Regarding suspension and debarment, the Unit's report states: "None of the recommendations made for action against a corporate entity of the General Electric Company were approved by the debarring officials at DLA [Defense Logistics Agency] or the Army who reviewed these recommendations. In the only matter involving a GE entity which resulted in administrative action, the DLA debarring official issued a suspension against the Aircraft Engine Group and lifted it five days later. The result of these efforts make it fairly clear that, at least in the case of the General Electric Company and probably other major contractors, administrative action is not a threatening remedy."

The report concluded, "Without a real possibility of the issuance of administrative action, the government loses an important remedial tool to force compliance."

The Administrative Agreement Out
A major problem in enforcement of contractor responsibility and debarment rules is that, especially in the defense sector, the government frequently relies on a single contractor, or just a few contractors, to provide big ticket items such as major weapons systems. A wave of corporate mergers in the defense industry over the past 10 years -- supported by the Pentagon -- has exacerbated the situation. As a result, procurement officials often find themselves constrained by the fact that the government is wholly reliant on certain companies for specific projects.

The contractors' preferred alternative to suspension or debarment is an administrative agreement. The goal of these agreements is to change the corporate culture of a company, to make it a responsible and ethical company, through implementation of a corporate ethics program.

There is reason to doubt whether these agreements foster ethical behavior, however. For instance, in January 1995, Lockheed Martin pled guilty to bribing an Egyptian official. In addition to paying a $24.8 million fine, Lockheed Martin entered an administrative agreement with the Air Force. Since implementing the agreement, Lockheed Martin and its subsidiaries have been accused of at least eight violations -- related to procurement fraud, environmental pollution, employment discrimination, shareholder fraud, nuclear safety violations and violations of the Arms Export Control Act -- and have paid approximately $7 million in fines/penalties and settlements.

Similarly, Litton Industries paid $82 million to settle allegations of procurement fraud and entered into an administrative agreement with the Navy in January of 1995. Since implementing the 1995 agreement, two Litton subsidiaries pled guilty to two criminal violations for making false statements and paid approximately $17.8 million in fines.

Despite these examples suggesting that administrative agreements do not adequately protect the government's interests, the government tends to rely on these agreements as the preferred tool to deal with large contractors.

An alternative approach to deter companies from breaking the law is to actually suspend and debar them. The leverage of the federal government's enormous buying power can be used both to protect taxpayers from unethical corporations whose record suggests they are likely to deliver shoddy goods and services, mistreat workers or defraud the government, and to serve the broader public policy goal of instilling respect for the law among large corporations. States and local governments can take similar measures, with similar impact.

There are few administrative difficulties in pursuing such a course. The challenge is only one of generating sufficient political will.

Creating a centralized database of information on corporate misconduct would enable federal procurement officials to make informed contracting decisions, and enable debarment officials to make informed suspension and debarment decisions as well.

To ensure procurement officers and debarment officials are fully informed, contractors should be required to disclose current suspensions or debarments, litigation initiated against them on either the federal or state level in the past three years, and any administrative agreements they are currently implementing.

Armed with adequate information, debarment officials should use suspension and debarment actions equally against large and small contractors.

And to ensure the even-handed and more rigorous application of relevant regulations, suspension or debarment should be mandatory for a contractor who is criminally convicted or has had a major civil judgment rendered against it more than once in a three-year period.

Seth Morris is a research assistant with the Project on Government Oversight.
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Crime And Not So Much Punishment

The following are examples of instances of defense contractor misconduct and alleged misconduct that did not result in suspension, debarment or denial of contracts:

2000: Lockheed Martin was charged with 30 violations of the Arms Export Control Act and the International Traffic in Arms Regulations, for transferring space launch assistance technologies to China. Lockheed Martin paid a civil penalty of $13 million.

2000: Boeing was charged with 110 violations regarding the Arms Export Control Act and the International Traffic in Arms Regulations, for the export of munitions and defense articles (i.e., technical data) exported to Australia, Singapore, Malaysia, Turkey, Spain and Italy. Boeing paid a civil penalty of $4.2 million.

1998: IBM East Europe/Asia Ltd. pled guilty to violations of the International Emergency Economic Powers Act and Export Administration regulations relating to the unlawful export of computers to a Russian nuclear weapons laboratory. The company paid an $8.5 million criminal fine.

1998: Boeing was charged with 207 violations of the Arms Export Control Act and the International Traffic in Arms Regulations for allegedly exporting defense articles to Russia, Ukraine and Norway. The company paid a $10 million civil penalty.

1993: An Army Blackhawk helicopter crash killed Colonel William Densberger, Colonel Robert Kelly, Specialist Gary Rhodes, Jr. and Major General Jarrett Robertson and seriously injured two others. Sikorsky Aircraft had found serious controllability problems with asymmetric fuel, but had failed to warn the Army. United Technologies, the parent company of Sikorsky Aircraft, paid a $22 million verdict to the families of the deceased and to survivors of the crash.

1988, 1991, 1993: Three Army Chinook helicopter accidents resulted in five deaths and two injuries. Boeing allegedly placed defective gears in the helicopters and then sold the aircraft to the Army. On August 3, 2000, Boeing agreed to pay the government $54 million in a settlement agreement in connection with the allegations.

1990: An Army Blackhawk helicopter crashed, allegedly due to fractured lock washers in the helicopter's tail rotor assembly. Five soldiers died and eight were injured. Sikorsky Aircraft, a subsidiary of United Technologies, paid a $9.74 million civil settlement and took steps to prevent similar accidents in 1,500 Army, Navy and Air Force aircraft containing the same lock washers. Contractors charged with serious violations of the law commonly state in their financial reports that their current litigation troubles in no way will have a material effect upon their company. Large contractors are able to make this statement with confidence because so few large contractors have ever been suspended from government work, even if criminally convicted of breaking the law. For example:

1996: Archer Daniels Midland (ADM) pled guilty for its role in two international conspiracies to fix prices to eliminate competition and allocate sales in the lysine and citric acid markets worldwide, and paid a $100 million fine. In fiscal year 1997, ADM was awarded $98 million in federal contracts.

1995: Lockheed Martin pled guilty to violating the Foreign Corrupt Practices Act for paying bribes to officials of the Egyptian Government. In fiscal year 1996, Lockheed Martin was awarded $19.8 billion in federal contracts.

1995: Beech Aircraft, a subsidiary of Raytheon, pled guilty to cost/labor mischarges on a federal contract. In fiscal year 1996, Raytheon was awarded $3.7 billion in federal contracts.

1995: Lucas Western, a subsidiary of TRW, pled guilty to 37 felony counts of making false certifications to the Department of Defense. In fiscal year 1996, TRW was awarded $1.5 billion in federal contracts. -- S.M.

Corpwatch.org
US: Boeing’s Skillful Lobbying Efforts
by Marianne Brun-Rovet, Joshua Chaffin, Caroline Daniel and James Harding, Financial TimesDecember 8th, 2003

In a June day this year, just over 50 executives from the Boeing Company trooped into Room 405 upstairs in the Old Executive Office building adjacent to the White House. From the podium where George W. Bush often hosts visiting groups, Karl Rove, the president's chief political strategist, briefed the Boeing managers on the administration's agenda and how it overlapped with Boeing's concerns.Second only to a private audience with the president himself, a meeting with Mr Rove is arguably the most sought-after appointment in Mr Bush's White House. The fact that Boeing could bring in a cohort of managers - not to mention the meetings on June 17 and 18 with senior officials from the State Department and Commerce Department and at least 13 members of Congress - was a testament to Boeing's government relations team.But then Boeing has made an extraordinary effort to make its presence felt in Washington, as it has moved from influencing the government as regulator to wooing it as its biggest customer, accounting for half its sales. In the past fortnight, its most ambitious lobbying effort - to secure an Dollars 18bn (Euros 15bn, Pounds 10bn) contract for aerial refuelling tankers - has ended in scandal and scrutiny. Mike Sears, Boeing's chief financial officer and leading successor to run the company, has been fired for his part in hiring Darleen Druyun, a Pentagon procurement official who was central in arguing the case to lease 100 Boeing 767 tankers. Phil Condit, chief executive, has resigned, becoming the highest-profile executive since the 1980s to lose his job in the aftermath of a military lobbying scandal. The Pentagon last week put the deal on hold, pending an investigation.Keith Ashdown, director of Taxpayers for Common Sense, an opponent of the deal, says: "What was unusual about Boeing's lobbying was that it gained complete access to all divisions of government from the president down, to having the key leadership of the House and Senate and dozens of lawmakers pushing their wares on the deal. People like Card, Hastert, Dicks, were lobbying for this."Andy Card is the White House chief of staff, Dennis Hastert is Speaker of the House and Norm Dicks is US Congressman from Washington state, the home of Boeing's manufacturing base.Boeing is not the only company to cultivate powerful people. In June Lockheed Martin, a defence rival, recruited Pete Aldridge, the Department of Defence official in charge of acquisitions, to its board. (He approved the Boeing tanker deal on his last day at the Pentagon.)Yet more than 8,500 e-mails gathered by the office of John McCain, the Arizona senator who has led efforts to stop the Boeing deal, reveal how Boeing lobbied the Pentagon, Capitol Hill and the White House. The e-mails provide a unique insight into the military industrial complex at work and show how Boeing pushed back the boundaries of corporate lobbying.Of all the industries damaged by the events of September 11 2001, the commercial aviation industry was perhaps the most severely hit. In the emotional aftermath, the US airlines secured Dollars 15bn in aid. Boeing, however, which was heavily dependent on the US airline industry, missed out on the first tranche of aid. Even before the attacks it was suffering from sluggish sales, ceding its lead in new aircraft orders to Airbus, its European rival. The production line for its mid-sized 757 and 767 was suffering weakening orders and faced closure. Mr Dicks was prompt to present a solution in Sepember 11 terms. In a letter to Mr Bush on October 4 2001 he wrote: "We have a unique opportunity to address the problems affecting Boeing while also meeting urgent requirements to modernise air force and navy aircraft."Boeing had already developed a plan to extend the prospects for its 767 line by adapting it as a military refuelling tanker. In February it had presented the air force with an unsolicited offer: to purchase 36 767 aircraft to be delivered by 2010. After September 11, however, the scale and the structure of the deal changed. Ms Druyun, then a leading procurement official in the air force, put together a proposal at the end of September for a deal to lease, not buy, 100 tankers as well as an action plan to win political approval.Whether the US military really needs the tankers remains a moot point. In testimony to Congress, James Roche, secretary of the air force, said the existing tankers had the oldest average fleet age, at 44 years, of any air force aircraft and the costs of maintenance promised to escalate dramatically. But there have been plenty of contradictory assessments. For example, the air force's own economic service life study in February 2001 concluded that the existing KC-135 fleet could "remain viable through the year 2040".Still, in the aftermath of the attacks the sense of urgency changed and the proposal seemed to be a win-win for both sides. The air force could afford - through the use of a lease - to get the aircraft promptly. For Boeing, any deal could keep its 767 line open. Signs also emerged that the contract could expand to 200 aircraft. As an internal e-mail from a Boeing executive on May 22 2003 put it: "We may actually be looking at a Dollars 35+B (Dollars 35bn-plus) deal with some additional political work."By late 2001 Ted Stevens, the Republican senator from Alaska who chairs the powerful appropriations committee, had inserted language to get the air force its aircraft through a leasing contract. Mr Stevens, a long-time recipient of political contributions from Boeing, had a month earlier received Dollars 21,900 from Boeing at a fundraiser in Seattle.Even early on it was clear there would be problems selling the deal. An air force e-mail sent on September 30 2001 noted: "Throughout the uniformed air force, the realisation exists that leasing is considerably more costly to the air force and taxpayer." Mitch Daniels, director of the Office of Management and Budget, also consistently opposed the idea, which was seen to add Dollars 2bn-Dollars 6bn to the costs.But Boeing had built a strong political base. As America's largest exporter and as the leading aerospace manufacturer (building, among other things, the iconic Air Force One), it had long commanded attention. It and its subsidiaries employ more than 153,000 people in 47 states, generating more than Dollars 1bn of wealth a week in the US.Boeing had long understood the appeal of job generation. The company has an internal database that allows executives to type in a state and find out how many jobs Boeing creates there. The database also shows how much Boeing spends on utilities and charitable contributions. "When Boeing was a commercial aircraft maker, they were prominent in sponsoring tables at philanthropic and arts related events and wanted to be seen as America's flying icon, creating a warm, fuzzy feeling in Congress," says one aerospace veteran.The nature of Boeing's lobbying efforts, however, changed after the merger with McDonnell Douglas and Rockwell in the late-1990s, shifting gear from monitoring benign issues, such as air traffic control, to aggressively elbowing for multi-billion-dollar contracts. "MDC was the lobby king in aerospace," says an employee in Boeing's defence operations. "The DC office became decidedly MDC after the merger; all the MDC guys got the leadership positions."The appointment of Rudy deLeon, deputy secretary of defence from March 2000 to 2001, as senior vice-president of Boeing's Washington operations also bolstered the company's defence connections. Boeing improved its clout oversees by recruiting Tom Pickering, a former US ambassador, to create a global network of diplomats. Boeing wooed mid-level military officials through, for example, golf tournaments for the Army Guard and National Guard. "They were very chummy events. They made sure each foursome had a Boeing guy and one or two government people along with a supplier," says one employee.The company was also active in Washington, making strategic political donations, such as Dollars 100,000 to Mr. Bush's inauguration party, and funneling nearly Dollars 1m in contributions to politicians on the armed services and defence appropriations committees.As Boeing ran into opposition over the tanker deal last year, it mobilised its supporters. An e-mail from Mr deLeon in September 2002 notes: "Speaker Dennis Hastert and congressman Norm Dicks spoke directly with President Bush in support of moving ahead on the tanker lease. In both cases, President Bush reportedly expressed his support for moving ahead with the tanker initiative and asked chief of staff Andy Card to be 'on point' for this effort."The White House, meanwhile, had cause to be sympathetic. "The reason the president and Karl Rove are interested is because they want to win in Washington (a battleground state) in the next election. That is why the president went out there and endorsed the tanker deal two months ago," says a former government official.Boeing brought in outside lobbyists with impeccable connections to help its cause. According to a draft review by Taxpayers for Common Sense, Boeing spent at least $1.2 million on lobbyists for the tanker deal, led by Akin, Gump, Strauss Hauer & Feld, which was paid $300,000. Its chief Boeing lobbyist is Bill Paxon, a former Republican congressman who served as one of the "gang of six" advisers who aided Mr Bush during his presidential run. When the tanker deal was running into trouble, Jim Albaugh, head of Boeing's defence division, sent an e-mail setting out a new case: "Rudy, we'd like you to ask Bill (Paxon) to try this on Andy Card."Boeing courted the defence elite, hiring as consultants two members of the Defence Policy Board (which advises Donald Rumsfeld, the defence secretary): General Ronald Fogelman, air force, and Admiral David Jeremiah, ex-navy. A Boeing executive says in December 2002 he held talks with consultants "who have relationships with Rumsfeld (Jeremiah)."Boeing also invested Dollars 20m last year in adefence-related venture capital fund run by Richard Perle, a former Reagan-era assistant defence secretary, regarded as an architect of US policy in Iraq. Mr Perle co-authored an editorial in The Wall Street Journal in August supporting the deal. He did not disclose the Boeing investment.Towards the end of the process even Mr Bush and Mr Card were involved in price negotiations. An e-mail from Andy Ellis, a Boeing executive, in May notes that "both the president and Andy Card" reacted negatively when they saw the Pentagon was getting the same discount for 767s as Continental Airlines. Mr Card was then reported as saying the White House would be happy to negotiate down the price on the understanding that Boeing could sell not 100 but 200 aircraft. "I asked her (another official) about the 200 tankers, she said YES, that was Andy Card's view of the deal," said a Boeing e-mail of May 22.Yet, while the scale of the corporate lobbying was extensive, what marked it out was how it was promoted within the Pentagon. "It was not so much the lobbying as the way Boeing handled it internally, with the games they played with the contracts, from manipulating the alternative analysis document and helping define the requirements," says one former government official.Ms Druyun from the start acted as much as lobbyist for the deal as customer. "She was a very powerful person and built up an empire in the air force. No one crossed her," says one person who has dealt with her in previous negotiations. Within Boeing Ms Druyun was seen as a supporter. "Darleen was the 'godmother of the C-17' (a Boeing military airlift). There were banners proclaiming that throughout the factory," says a Boeing defence employee. "They first showed up during her first visit to Long Beach and stayed up in the Moose Cafe until she came to work for Boeing."Ms Druyun worked in close collaboration to shape the contract. On ber 12 2001 a Boeing e-mail stated: "USAF wants us to support their language for an operating lease. Darleen will make the actual contract favourable." On June 17 2002 another noted: "Meeting today was very good. Darleen spent most of the time bringing the USAF price up to our numbers.""Everyone in Washington was talking about Darleen before this happened and her perceived relationship with Boeing," says one procurement lobbyist. "People were nervous about it." Even so, Ms. Druyun was not in a position to swing the final contract. Last November she left the Pentagon to take a job with Boeing.Other Pentagon officials worked closely with Boeing. Marvin Sambur, assistant secretary of the air force for acquisitions, in April e-mailed Mr Albaugh an internal e-mail he had sent his bosses, adding: "Please treat this as sensitive." He also sought Boeing's help in fending off criticism from Mr. McCain about the deal.Boeing denies there was anything unusual about its ties. It says that throughout the negotiations it followed government regulations.On November 24 Mr. Bush signed legislation authorising the compromise deal to buy 80 tankers and lease another 20. Almost as soon as it had gone through, it started to come apart. That same day Mr. Sears and Ms. Druyun were fired from Boeing, accused of breaching internal rules about holding job talks before she had excused herself from working on Boeing-related work, and of covering this up.Opponents of the 767 deal moved quickly to exploit the dismissals. They want an inquiry into what effect this apparent conflict of interest may have had on the contract and whether Boeing gained unfair advantage in other contracts Ms. Druyun worked on. Senator McCain is considering hearings on the wider question of "revolving door" appointments from the government to the private sector. Boeing has denied that it gained any unfair benefit from these early job discussions.The scandal could bring more fallout for prominent people in government, such as Mr. Roche, who is seeking confirmation to become secretary of the army, Mr. Sambur and even Mr. Card.Boeing now faces the hard task of ensuring the 767 deal is not permanently grounded. But it is unlikely to be fatally wounded. With the US current account deficit worsening, the US needs to protect Boeing's status as the leading aerospace group. And, with the merger activity in the defence industry over the last decade slimming the number of contractors, it is simply too big to fail.

FIND BELOW LINKS TO ARTICLES ABOUT THE MERGER, CHARGES AND FINES PAID AS REPORTED BY THE FEDERAL TRADE COMMISSION (FTC) AND MORE BELOW.

It would appear that The Boeing Company has made an effort to make it look like they are multiple companies working with/through the American Hospital Association to try to defeat the Qui Tam laws and further silence and emasculate whistleblowers. The obvious connection would appear at surface level to be about medical issues and suits, but they’ve attached the whole defense area to this also, so if the medical area of Qui Tam is disabled, they will also have disabled the defense area Qui Tam, to the detriment of well-meaning whistleblowers, who have little to protect or help them now as it is!

1. Boeing Company News Release August 1, 1996 “Boeing to Acquire Rockwell Aerospace and Defense Units” http://www.boeing.com/news/releases/1996/news.release.960801.html

2. Boeing Press Release put online by Chicago Software Works, August 1, 1996 “Boeing to Acquire Rockwell Aerospace and Defense Units”

http://www.kls2.com/cgi-bin/arcfetch?db=sci.aeronautics.airliners&id=%3Cairliners.1996.1535@ohare.chicago.com%3E

3. Article on GlobalSecurity.org
The Boeing Company: Mergers, Acquisitions and Subsidiaries
http://www.globalsecurity.org/military/industry/boeing.htm

4. Federal Trade Commission Dec. 5, 1996, “Boeing Company to Settle Charges in Rockwell Acquisition “
http://www.ftc.gov/opa/1996/12/boeing.shtm