[corp-focus] Boeing Criminal Agreement: Odd and Unusual

[robert weissman]

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Boeing Criminal Agreement: Odd and Unusual
By Russell Mokhiber and Robert Weissman
	
It was 3:36 p.m. on Friday June 30.
	The Friday before the July 4th holiday weekend.
	Reporters were on their way out of town.
	And into our e-mail box comes a press release from the Justice 
Department announcing that Boeing will not be criminally prosecuted for 
alleged criminal activity.
	According to the press release, Boeing will pay a $50 million criminal 
penalty and $615 million in civil penalties to resolve federal claims 
relating to the company's hiring of the former Air Force acquisitions 
chief Darleen A. Druyun, by its then CFO, Michael Sears, and its 
handling of competitors' information in connection with the Evolved 
Expendable Launch Vehicle (EELV) Program and certain NASA launch 
services contracts.
	Attached to the press release was a copy of the nine-page civil 
settlement agreement.
	But where's the non-prosecution agreement -- the settlement agreement 
for the criminal side?
	This non-prosecution agreement was not attached to the press release.
	Why not?
	No answer from the United States Attorney in Alexandria Virginia.
	No answer from the United States Attorney in Los Angeles.
	No answer from the Justice Department.
	After all, it was late Friday.
	And then, after all, it was the Monday before the Fourth of July.
	No answer.
	Finally, only later in the week, Main Justice sends along the 
non-prosecution agreement.
	And now it is clear why Boeing didn't want the document released.
	In the agreement, which covers a two-year period, Boeing agrees not to 
commit any criminal offenses related to stealing of other companies' 
sensitive procurement information or the laws governing federal bribery, 
graft and conflict of interest.
	But unlike the 50 or so corporate deferred and non-prosecution 
agreements that have preceded this one, Boeing's team of lawyers had 
inserted this item:
	If a non-executive level Boeing employee violates the agreement, that's 
not a violation by Boeing.
	Don't believe it?
	Here's the exact wording:
	"For the purposes of determining compliance with this agreement (as 
opposed to legal responsibility), the commission of a defined offense by 
a Boeing employee classified at a level below executive management as 
defined by Boeing's internal classification structure in place at the 
time of the execution of this agreement shall not be deemed to 
constitute the commission of a defined offense by Boeing."
	When told the provision, experts in the field expressed surprise.
	"It's an odd and unusual provision," said Ryan McConnell of Baker Botts 
in Houston who has closely followed the rise of corporate deferred and 
non-prosecution agreements. "I've never seen it before."
	"Drawing the line between executives and other employees is a little 
crude," said Columbia University Law Professor John Coffee. "I don't 
think you want to tell non-executive employees they are legally immune 
and can't get the company in trouble. You want the company monitoring 
all employees."
	"Under this agreement, Boeing gets a pass," said University of 
Connecticut Law Professor Leonard Orland. "It's pretty good negotiating. 
That's amazing. Nobody else has it."
	And then the Boeing lawyers inserted this:
	That even if a Boeing executive violates the agreement, it's not a 
violation by Boeing if the company reports the violation to the federal 
government.
	Don't believe it?
	Here's the exact language:
	"The commission of a defined offense by a Boeing employee shall not be 
deemed to constitute the commission of a defined offense by Boeing as 
long as the underlying allegation or conduct is reported by Boeing."
	The lawyers for Boeing did not return calls seeking their 
interpretation of these provisions.
	Those lawyers, as listed in the non-prosecution agreement, are:
	Brad Brian and Jerome Roth of Munger Tolles & Olson.
	Stephen Preston and Jamie Gorelick of Wilmer Cutler Pickering Hale and 
Dorr.
	And Richard Cullen of McGuire Woods.
	Only Boeing's Tim Neale would speak on the issue.
	"We're not going to comment on what the provisions mean," Neale said. 
"The agreement speaks for itself."
	Well, it does.
	It means that over the past couple of years, we have gone from 
convicting corporate criminals for corporate crimes, to allowing them to 
get off with deferred and non-prosecution agreements, to the low point 
of the Boeing non-prosecution agreement, which says that even if Boeing 
violates the agreement, it's not a violation.
	Federal prosecutors in Washington, D.C., Alexandria, and Los Angeles 
did not return calls seeking answers to some questions, like:
	Why wasn't the Boeing non-prosecution agreement promptly released along 
with the civil agreement?
	Did Boeing lawyers request that the non-prosecution agreement not be 
released?
	Why did federal prosecutors agree to the loophole-ridden 
non-prosecution agreement?
	Awaiting your call.


Russell Mokhiber is editor of the Washington, D.C.-based Corporate Crime 
Reporter, <http://www.corporatecrimereporter.com>. Robert Weissman is 
editor of the Washington, D.C.-based Multinational Monitor, 
<http://www.multinationalmonitor.org>. Mokhiber and Weissman are 
co-authors of On the Rampage: Corporate Predators and the Destruction of 
Democracy (Monroe, Maine: Common Courage Press).

(c) Russell Mokhiber and Robert Weissman

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