Boeing Paid $615 Million to Resolve U.S. Government Procurement Fraud Allegations

Summary

In June 2006, Boeing agreed to pay $615 million to resolve criminal and civil allegations tied to government procurement misconduct involving U.S. Air Force and NASA contracts. The U.S. Department of Justice said Boeing improperly used competitors’ information in connection with launch-services contracts worth billions of dollars and also investigated Boeing’s hiring of former senior Air Force procurement official Darleen Druyun. The settlement included $565 million in civil payments and a $50 million criminal monetary penalty. Boeing accepted responsibility for employee conduct, agreed to continue cooperating with investigators, and committed to maintaining an effective ethics and compliance program focused on hiring former government officials and handling competitor information. DOJ described the settlement at the time as a record government-procurement fraud resolution involving a defense contractor. The underlying matters included Boeing employees’ handling of Lockheed Martin competitor documents in connection with the Air Force’s Evolved Expendable Launch Vehicle program and the company’s relationship with Druyun, who had exercised substantial influence over Air Force contracting before joining Boeing. Related individuals were criminally convicted, while Boeing itself resolved the corporate exposure through the 2006 agreements. Sources: DOJ — Boeing to Pay United States Record $615 Million to Resolve Fraud Allegations DOJ — Statement on the Boeing global settlement and procurement investigations