Sun, Mar 20, 2005 - Page 11 News List

Extra-marital high jinks costs Boeing execs their jobs

NY TIMES NEWS SERVICE

The Boeing executive whose romantic relationship with Boeing's chief executive, Harry Stonecipher, led to his ouster has voluntarily resigned, the company said Friday in a statement.

Debra Peabody, a vice president in the company's Washington, DC , office, resigned after an internal Boeing investigation conducted by company lawyers and by outside legal counsel. A notice of Peabody's departure was posted on Boeing's private Web site for employees, although she was not identified by name.

"By mutual agreement, neither Boeing nor the former executive is releasing further information," Boeing said in the posting. The posting also cited Boeing's general counsel, Doug Bain, as saying the executive had "voluntarily left the company."

Stonecipher, 68, was forced to resign last week after the Boeing board received an anonymous tip from a Boeing employee that he was having an extramarital affair with Peabody, 48.

That tip prompted an internal investigation of e-mail messages that Stonecipher had exchanged with Peabody as well as an examination of corporate expense and travel records for the two.

Last Thursday, Stonecipher's wife of 50 years, Joan, filed for divorce in Chicago. In a brief interview with the Chicago Tribune, Joan Stonecipher said she was stunned by her husband's actions. "I'm just as blown away by this as everybody else," she said.

John Dern, a Boeing spokesman, declined to elaborate on Friday's statement or to comment on whether Peabody, who is divorced and had worked at Boeing for more than 20 years, would forfeit any employment benefits.

Stonecipher, who will remain at Boeing until April, is continuing to earn his US$1.5 million annual salary but will not be entitled to a year-end bonus for his work in 2005.

Peabody joined Boeing in 1980 as an engineer and worked for three years in the London office before returning to the United States in 2001 to the company's headquarters, then in Seattle.

She also worked as international sales director for Connexion, a Boeing operation that provides high-speed Internet services to aircraft.

Before joining the Washington government relations office, Peabody worked in the office of Boeing's chairman in Chicago.

The relationship between Stonecipher and Peabody began in January after the two met at a Boeing corporate event in California. A call to Peabody's home in Virginia was not returned.

Stonecipher was brought out of retirement 15 months ago to lead Boeing, succeeding Philip Condit, who was forced to resign. Stonecipher's main task was to restore Boeing's reputation amid a Pentagon procurement scandal that led to the jailing of two former Boeing executives.

As part of that cleanup effort, Stonecipher required that Boeing's 150,000 employees sign a code of ethical conduct. It was that code that the Boeing board found Stonecipher violated by his actions.

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