Michael Sears, Boeing Co.'s former chief financial officer, was sentenced to four months in prison for holding improper job talks with Darleen Druyun, a former senior Air Force procurement official, while she still had sway over contracts involving the company.
Mr. Sears also received a $250,000 fine and two years probation, after previously pleading guilty to a single count of aiding and abetting illegal employment negotiations. Ms. Druyun, who also pleaded guilty, is currently serving a nine-month prison term at a minimum-security facility in Marianna, Fla., after she admitted giving Boeing special treatment on billions of dollars in high-profile contracts while negotiating jobs for herself and family members. Her expected release date is Oct. 1.
Judge Gerald Lee, during a hearing at U.S. District Court in the Eastern District of Virginia, said Mr. Sears's sentence reflects the impact his offense had on the government and taxpayers. Under federal sentencing guidelines, Mr. Sears was eligible for a maximum sentence of six months. Judge Lee acknowledged that Mr. Sears's conduct wasn't as severe as that of Ms. Druyun, who initiated the job negotiations. "Yours is not equal to hers," Judge Lee said.
Speaking at the hearing, Mr. Sears apologized for what he described as an impulsive decision to pursue Ms. Druyun in October 2002 even though she hadn't removed herself from authority over Boeing contracts. "I take full responsibility for this bad decision on the 17th of October. I know what I did was wrong and I'm truly sorry for that error," Mr. Sears said.
Mr. Sears's lawyers had requested a sentence of only probation. But prosecutors sought prison time, which they said would deter other government contractors from similar mistakes.
Analysts said the four-month sentence was harsher than expected. Keith Ashdown, of watchdog group Taxpayers for Common Sense, said prosecutors may have been disappointed that Mr. Sears didn't provide stronger evidence against other Boeing executives. In court documents filed in anticipation of today's sentencing hearing for Mr. Sears, the U.S. attorney's office in Alexandria, Va., blamed Boeing's "senior management" for failing to ask "the logical questions" or "confront the obvious legal and ethical issues" that might have avoided scandal.
The government had homed in on e-mail traffic between Mr. Sears and other top company officials. Instead of demanding to know why an October 2002 e-mail from Mr. Sears to several other senior Boeing executives described his employment discussions with Ms. Druyun as "a non-meeting," according to the filing, company leaders "appear to have accepted the negotiations as business as usual."
As part of his cooperation agreement, Mr. Sears told prosecutors that he never told any fellow executives in 2002 that Ms. Druyun hadn't stepped away from her Air Force responsibilities.
Boeing has been angling to avoid facing a corporate charge in the case, but culpability on the part of Mr. Sears, one of Boeing's top executives, doesn't help its case. Prosecutors, who are probing why no concerns were raised inside Boeing's executive suites, face a tougher time pursuing other executives because Mr. Sears hasn't singled out any of them in his interviews, according to people familiar with the case.
At a press conference Friday, U.S. Attorney Paul McNulty said Boeing remains under investigation regarding the procurement scandal, but declined to give details of the investigation or discuss the possibility of a settlement with the company. However, he acknowledged the government could choose to try to recover taxpayer money spent on the Druyun investigation.
"There are civil implications to the Boeing matter -- there may be an interest in looking at the money side," Mr. McNulty said. Prosecutors have estimated $2.5 million in costs associated with the investigation.
For its part, Boeing said it had been fully cooperative with the government investigation and that the sentencing of Mr. Sears furthers resolution of the Druyun affair. "Today's action brings this matter one step closer to closure," said Senior Vice President and General Counsel Doug Bain, in a prepared statement.
Meanwhile, Boeing's lawyers want to hammer out a comprehensive agreement covering the myriad civil, criminal and administrative investigations pending against the company. Those include a separate, two-year grand-jury investigation in Los Angeles targeting Boeing for improper acquisition of thousands of pages of proprietary Lockheed Martin documents.
In a setback for Boeing, the General Accountability Office on Friday said it was sustaining a protest by Lockheed over a Druyun-tainted contract that Boeing won to build small-diameter bombs. The GAO recommended that the Air Force hold a competition for any additional orders.
--Wall Street Journal Reporter Andy Pasztor contributed to this article
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