Posted on 05/05/2003 8:28:52 PM PDT by anymouse
Boeing Discloses Government Probe of Rocket Contract Data
Boeing Co. acknowledged Monday that it is being investigated by the Justice Department and the Air Force to determine whether the company improperly used documents of rival Lockheed Martin Corp. to win a big rocket contract in 1999.
Investors' concerns about the investigations, which were reported by The Wall Street Journal, sent Boeing shares down $1, or 3.5 percent, to $27.62 on the New York Stock Exchange.
Chicago-based Boeing formally disclosed the investigation in a filing with the Securities and Exchange Commission late Monday after earlier confirming the published report of the probe.
The U.S. Attorney in Los Angeles is conducting criminal and civil investigations while a separate Air Force administrative inquiry will determine whether to suspend or bar Boeing from specified military work, according to the SEC filing.
"The company is cooperating with these parallel investigations, but it is not possible at this time to predict the outcome of these matters or whether an adverse outcome would or could have a material adverse financial impact on the company," Boeing said in its filing.
Boeing spokesman Dan Beck confirmed that the investigations are intended to discover whether Boeing illicitly obtained or used documents from Lockheed Martin in order to secure the contract making it the government's primary manufacturer of rockets for launching spy, communications and other satellites.
"Boeing is cooperating fully with those investigations," Beck said. He declined further comment.
The investigation stems from a 1999 incident in which two Boeing employees, who were later fired, had information about a competitor under the Evolved Expendable Launch Vehicle Program, according to the filing. A third employee also was disciplined.
Bethesda, Md.-based Lockheed Martin is the biggest U.S. defense company; Boeing, whose commercial airplane business has suffered because of an industrywide slump, is No. 2.
Boeing already has said in its response to a 2000 civil lawsuit over the contract that it didn't use any Lockheed proprietary information in its rocket bid.
Ouch. I bought at $55.00. Just when I think they can't go any lower, they do. Then again, this company is under the worst, most inepot management a company can have. Under the circumstances, maybe I should be glad the stock is as high as it is. It used to be a really great company until Harry Stonecipher took over.
Not to mention inepot investors.
Boeing's price can be directly traced to 9/11/2001. If you cannot perform this complex intellectual feat, I'll be glad to lead you through it.
--Boris
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