It was 3:36 p.m. on Friday June 30.
The Friday before the July 4th holiday weekend.
Reporters were on their way out of town.
And into our e-mail box comes a press release from the Justice Department
announcing that Boeing will not be criminally prosecuted for alleged criminal
According to the press release, Boeing will pay a $50 million criminal penalty
and $615 million in civil penalties to resolve federal claims relating to the
company's hiring of the former Air Force acquisitions chief Darleen A. Druyun,
by its then CFO, Michael Sears, and its handling of competitors' information
in connection with the Evolved Expendable Launch Vehicle (EELV) Program and
certain NASA launch services contracts.
Attached to the press release was a copy of the nine-page civil settlement
But where's the non-prosecution agreement -- the settlement agreement for the
This non-prosecution agreement was not attached to the press release.
No answer from the United States Attorney in Alexandria Virginia.
No answer from the United States Attorney in Los Angeles.
No answer from the Justice Department.
After all, it was late Friday.
And then, after all, it was the Monday before the Fourth of July.
Finally, only later in the week, Main Justice sends along the non-prosecution
And now it is clear why Boeing didn't want the document released.
In the agreement, which covers a two-year period, Boeing agrees not to commit
any criminal offenses related to stealing of other companies' sensitive procurement
information or the laws governing federal bribery, graft and conflict of interest.
But unlike the 50 or so corporate deferred and non-prosecution agreements that
have preceded this one, Boeing's team of lawyers had inserted this item:
If a non-executive level Boeing employee violates the agreement, that's not
a violation by Boeing.
Don't believe it?
Here's the exact wording:
"For the purposes of determining compliance with this agreement (as opposed
to legal responsibility), the commission of a defined offense by a Boeing employee
classified at a level below executive management as defined by Boeing's internal
classification structure in place at the time of the execution of this agreement
shall not be deemed to constitute the commission of a defined offense by Boeing."
When told the provision, experts in the field expressed surprise.
"It's an odd and unusual provision," said Ryan McConnell of Baker
Botts in Houston who has closely followed the rise of corporate deferred and
non-prosecution agreements. "I've never seen it before."
"Drawing the line between executives and other employees is a little crude,"
said Columbia University Law Professor John Coffee. "I don't think you
want to tell non-executive employees they are legally immune and can't get the
company in trouble. You want the company monitoring all employees."
"Under this agreement, Boeing gets a pass," said University of Connecticut
Law Professor Leonard Orland. "It's pretty good negotiating. That's amazing.
Nobody else has it."
And then the Boeing lawyers inserted this:
That even if a Boeing executive violates the agreement, it's not a violation
by Boeing if the company reports the violation to the federal government.
Don't believe it?
Here's the exact language:
"The commission of a defined offense by a Boeing employee shall not be
deemed to constitute the commission of a defined offense by Boeing as long as
the underlying allegation or conduct is reported by Boeing."
The lawyers for Boeing did not return calls seeking their interpretation of
Those lawyers, as listed in the non-prosecution agreement, are:
Brad Brian and Jerome Roth of Munger Tolles & Olson.
Stephen Preston and Jamie Gorelick of Wilmer Cutler Pickering Hale and Dorr.
And Richard Cullen of McGuire Woods.
Only Boeing's Tim Neale would speak on the issue.
"We're not going to comment on what the provisions mean," Neale said.
"The agreement speaks for itself."
Well, it does.
It means that over the past couple of years, we have gone from convicting
corporate criminals for corporate crimes, to allowing them to get off with deferred
and non-prosecution agreements, to the low point of the Boeing non-prosecution
agreement, which says that even if Boeing violates the agreement, it's not a
Federal prosecutors in Washington, D.C., Alexandria, and Los Angeles did not
return calls seeking answers to some questions, like:
Why wasn't the Boeing non-prosecution agreement promptly released along with
the civil agreement?
Did Boeing lawyers request that the non-prosecution agreement not be released?
Why did federal prosecutors agree to the loophole-ridden non-prosecution agreement?
Awaiting your call.
Russell Mokhiber is editor of the Washington, D.C.-based
Corporate Crime Reporter.
Robert Weissman is editor of the Washington, D.C.-based
Multinational Monitor, and
associate counsel for the Consumer
Project on Technology. Mokhiber and Weissman are co authors of
the Rampage: Corporate Predators and the Destruction of Democracy"
(Monroe, Maine: Common Courage Press).
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