Federal prosecutors are seeking a prison term for Michael Sears, Boeing Co.’s former chief financial officer, who has pleaded guilty to arranging a job for a top Air Force official while she was working on Boeing business.
Putting Sears behind bars for violating federal contract laws will act as a deterrent to “such illegal conduct in the future by companies and their senior management,” wrote Assistant U.S. Atty. Robert Wiechering in a prosecution memo released Thursday.
Although he stopped short of accusing the company of wrongdoing, Wiechering was critical of Boeing’s management for not asking enough questions about Sears’ wooing of Darleen Druyun, an Air Force acquisition official who oversaw billions of dollars in contracts for next-generation fighter jets, refueling tankers and other military projects.
Prosecutors say Boeing’s top executives never asked “logical questions” about Sears’ negotiations with Druyun. In particular, they say a Sears e-mail sent to other Boeing executives describing his “non-meeting” with Druyun should have raised a red flag at the company’s Chicago headquarters.
But there are no bombshells in the memo like there were at Druyun’s sentencing last fall. Druyun admitted arranging Boeing jobs for her daughter and son-in-law and later increasing the price on a $20 billion-plus tanker contract as a “parting gift to Boeing” before she went to work there in January 2003.
In what has become the biggest defense contracting scandal since the 1980s, Druyun also admitted favoring Boeing on a number of other contracts, revelations that came out after she failed a lie-detector test.
Those allegations are being investigated by the Pentagon’s inspector general, which expanded the list of suspect contracts by eight this week, bringing the total to 15.
Druyun began serving a nine-month prison sentence in January.
Despite their criticism, prosecutors did not implicate any other high-ranking Boeing managers in their eight-page memo, which was filed in federal court in Alexandria, Va.
They aren’t seeking a specific prison sentence for Sears, 57, who faces a maximum of six months in prison under federal sentencing guidelines.
Boeing on Thursday defended its handling of the Sears-Druyun matter, noting that it uncovered the conduct that led to their firing.
Other company officials believed the two were following the appropriate laws and procedures during their negotiations, Boeing said in a statement.
The Chicago aerospace giant also said it “added an automatic set of checks and balances to prevent this kind of situation from happening again.”
In a separate memo, Sears’ defense attorneys ask the judge to spare Sears a prison term and sentence him to probation because his actions were a “clear aberration from an otherwise moral, ethical and principled life.”
Sears, who was fired by Boeing in late 2003, has “suffered incalculable embarrassment and emotional anguish, lost millions of dollars in income and stock benefits … and is now completely unemployable in the industry in which he spent his entire career,” the defense memo said. “This is as steep a professional penalty as any defendant can pay.”
Sears, who had authored a book on how to become an effective corporate manager that was dumped after he was fired, was a “strong candidate” to be Boeing’s next chief executive, his attorneys wrote.
His “highly publicized fall from grace” is more than enough to dissuade others from following his course of action, it adds.
In a letter to the court, Sears said his entire life has “darkened” because of his lapse in judgment in offering a job to Druyun after he learned she had not recused herself from handling Boeing business.
But, he said, the scathing experience has strengthened his bonds with his family and with God.
His request for leniency was supported by letters from several former Navy rear admirals, retired Boeing executives, a 23-year-old African-American man he had mentored and his pastor at the First Presbyterian Church in Deerfield.
