Sun, Feb 20, 2005 - Page 11 News List

Former Boeing executive sent to prison

NY TIMES NEWS SERVICE , ALEXANDRIA, VIRGINIA

A former executive at Boeing, Michael Sears, once in line to become chief executive, was sentenced on Friday to four months in prison for his role in illegally recruiting a former top Air Force official to work for the company.

Sears, 57, stood before the court and said he was ashamed of his actions.

"I know what I did was wrong," he said.

He and his lawyers asked for probation, but Judge Gerald Lee of US District Court took note of a growing Air Force-Boeing procurement scandal and said prison had value as a deterrent to other Pentagon contractors.

"You are a person who had everything, and in a blink of an eye you jeopardized everything," said Lee, who also imposed a US$250,000 fine, two years probation and 200 hours of community service for the felony conflict-of-interest charge.

After the sentencing, US Attorney Paul McNulty said his office was continuing to investigate the case, which has already led to the departure of officials at Boeing and the Air Force. In addition, McNulty announced the formation of a working group of eight federal investigative agencies to look for possible conflict-of-interest violations involving the Pentagon and its contractors.

"The Michael Sears sentence demonstrates the efforts made by the government to pierce the corporate veil," said McNulty, who prosecuted the case. "Michael Sears had a clear choice, and he made the wrong choice. Contractors have to respect the system. He put Boeing's interest ahead of the interest of the taxpayers."

Sears' sentence grows out of employment discussions that he had with Darleen Druyun, a former Air Force acquisitions officer, while she was still at the Pentagon and overseeing billions of dollars in Boeing contracts, including a US$20 billion aerial tanker refueling contract.

At the time, Druyun had not disqualified herself from matters involving Boeing -- something that Sears knew at the time and shared with other Boeing executives. Druyun is serving a nine-month prison sentence after admitting that she steered Pentagon business to Boeing in hopes of gaining a job there, which she later did.

Sears' involvement with Druyun put an end to a 34-year career that brought him to the highest levels in his industry.

Starting as an avionics engineer, Sears held top positions at McDonnell Douglas, where he was best known for managing the F-18 Super Hornet program. When Boeing later acquired McDonnell Douglas, he rose there and was one of four members of Boeing's "office of the chairman" before he was fired.

In a presentencing memorandum, Sears' lawyers said he had lost "by conservative estimates" more than US$10 million in "salary, stock benefits and future compensation."

A book on management that Sears was about to publish, Soaring Through Turbulence, was withdrawn after his arrest.

In some ways, his wealth worked against him. In arguing for a prison term, McNulty, the prosecutor, said that a fine would "not be a significant" burden for Sears, nor would serving his sentence at his home, which is valued at more than US$5 million. Sears' salary at Boeing was more than US$1 million a year.

Sitting beside Sears in court were his wife and two grown sons.

"The past 15 months have been the worst of my life," he said before the sentencing. "I am truly sorry. I would like to apologize to the Air Force, the Department of Defense and the citizens for the country for any upheaval."

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