Ex-Boeing, Air Force Official Guilty

Reuters ^ | Tuesday April 20, 3:23 pm ET | Andrea Shalal-Esa

[BenLurkin]

ALEXANDRIA, Va. (Reuters) - A former top U.S. Air Force official wept when she pleaded guilty to conspiracy on Tuesday for discussing a job with Boeing Co. (NYSE:BA - News) while still overseeing its business dealings with the Air Force. ADVERTISEMENT

Darleen Druyun, 56, who retired as the No. 2 Air Force acquisition official in November 2002 and took a job with Boeing two months later, agreed to cooperate with prosecutors who are still investigating Michael Sears, the former Boeing chief financial officer who hired her.

"I deeply regret my actions," an emotional Druyun told Judge T.S. Ellis III in U.S. District Court for the Eastern District of Virginia.

Druyun has been under investigation for possible conflicts of interest in a $23.5 billion Air Force plan to lease and buy 100 Boeing 767s as refueling planes, a deal that Defense Secretary Donald Rumsfeld said on Tuesday remained on hold pending several additional reviews.

Boeing fired Druyun and Sears on Nov. 24, saying the two violated company ethics rules by discussing a Boeing job for Druyun while she was still working on Boeing-related Air Force programs and then trying to cover it up. Boeing Chief Executive Officer Phil Condit resigned a week later.

Druyun admitted negotiating the Boeing job with Sears while still at the Air Force and then conspiring with him to try to conceal the talks. She also admitted to asking a senior Boeing executive to secure jobs for her daughter, Heather McKee, and her then-boyfriend, now husband.

Druyun faces a maximum of five years in prison and a $250,000 fine. Her sentencing is scheduled for August 6.

Under the terms of the plea agreement, Druyun will provide any information and documents she has about any criminal behavior and submit to a lie-detector test.

The government agreed not to prosecute Druyun's daughter -- who is still employed by Boeing -- for her role in facilitating communications between Druyun and Sears, who was named in the government case only as "a senior executive" at Boeing.

Druyun and her daughter declined to comment after the hearing, but Druyun's brother, Edward Lofton, a Catholic priest in South Carolina, said the deal on her daughter was critical for Druyun. "It's been very painful for her," he said.

U.S. District Attorney Paul McNulty told reporters the government's investigation would continue but gave no details.

"Darleen Druyun placed her personal interest over the interests of the Air Force and American taxpayers," he said. "Secretly negotiating employment with a government contractor at the same time you are overseeing the negotiations of a multibillion dollar lease from that same contractor strikes at the heart of the integrity of the acquisition process."

Druyun met with Air Force and White House officials regarding the terms of the Boeing tanker deal, and a fair price for the 767s just days after Sears offered Druyun a $250,000-a-year job and a signing bonus of $50,000 at a private meeting on Oct. 17 in Orlando, Florida.

Druyun told Sears she had not recused herself and they agreed to "keep the meeting to themselves," the plea said.

She did not recuse herself from overseeing the Boeing negotiations until Nov. 5, the same day Sears met her at the Pentagon to formally discuss Boeing's job offer.

She offered no explanation for why she failed to recuse herself from the Boeing talks, although she had done so for Lockheed Martin Corp. (NYSE:LMT - News) and Raytheon Co. (NYSE:RTN - News) in August 2002, with whom she was also discussing employment.

But Druyun and Sears agreed to maintain their "false story" when Boeing began investigating the job offer to Druyun in July, and even after the company discovered e-mails showing the discussions started before Nov. 5, the government said.

In late summer 2003 and again in October, Sears told Druyun to "hang tough" and that he would insist any conflicting e-mails reflected "pre-planning" by Boeing for the job offer.

[BenLurkin]

"Mike Sears, left, former chief financial officer for Boeing Co., and Darleen Druyun, right, former deputy general manager of Boeing's Missile Defense Systems unit, are shown in these undated company photos."Yahoo News Photos

[Bobibutu]

This arrogant turkey foot needed to go down - from what I have followed over the past couple of months. Tip of the iceburg - we have rot to the core.

[BenLurkin]

Sold my Boeing stock at 38 (D'oh!).

Still, I hope you're wrong for the sake of the country as well as Boeing and its employees.

[jocko12]

DON'T ANYONE TELL PHONE BOOK TOMMY ABOUT THIS.

[Living Free in NH]

"I deeply regret my actions,"

Translation: "I deeply regret getting caught."