Major defense contractors frequently prowl the halls of the Pentagon and Congress, working to protect and increase their share of the $59 billion the military spends annually on arms and supplies.
But last spring, Boeing Co. of Seattle, the nation's fourth largest defense contractor with some $1.6 billion a year in Pentagon business, apparently went too far.
Pentagon investigators assert that several Boeing officials violated national security restrictions by gaining unauthorized access to information classified top secret. They then handled the sensitive material in such a way that Pentagon officials believe it probably was intercepted by Soviet intelligence agents.
The information came from a document the Pentagon was preparing last March for President Carter. The draft memo discussed whether the administration should build a new land-based intercontinental ballistic missile (ICBM), called the MX, or proceed with one of several less costly alternatives for modernizing the nation's strategic arsenal.
That question, still unanswered, is one of the most important military issues President Carter faces. It is also of vital concern to Boeing. Depending on the decision, Boeing could win or fail to win billions of dollars of business over the next decade.
A Pentagon investigation completed February 23 alleges that several Boeing officials successfully obtained facts from the top secret draft and then conspired to prevent defense agents from discovering the story behind the unauthorized disclosure.
It wasn't until early this year, some 10 months after the Pentagon investigation began, that James L. O'Rourke, a Boeing employe testifying under a Justice Department grant of limited immunity from criminal prosecution, gave the history of the leak.
O'Rourke, a marketing representative in the Washington office of Boeing's Boeing Aerospace Co. subsidiary, told investigators that he had read the secret draft memo and made notes. He then prepared a summary that was transmitted by telecopier from Boeing's Washington office to its Seattle headquarters last March 27. Pentagon officials presume that the information, transmitted over a normal telephone line, was routinely collected by Soviet agents, who they say monitor telephone lines to and from defense contractors.
The Pentagon is referring the case to the Justice Department for possible criminal prosecution.
Meantime, the Pentagon has suspended the security clearances of six Boeing employes, including O'Rourke and Ben T. Plymale, currently marketing vice president of Boeing Aerospace and formerly deputy assistant secretary of defense for strategic and space systems. In addition, the government temporarily barred two Pentagon officials, Lt. Col. Kenneth Van Dellen and Stuart Rubers, a civilian strategic analyst, from access to classified information for alleged roles in the security breach.
Boeing isn't anxious to discuss the matter. In response to a query, a Boeing spokesman read a statement saying that "six Boeing employes -- two of whom are secretaries -- have had their security clearances suspended temporarily. Restoration of the clearances depends on the outcome of the investigation by the Department of Defense into an incident of handling classified information without appropriate safeguards."
The movement of weaponry experts between industry and government jobs, frequently on the same project, facilitates the easy flow of information and tends to blur the distinction between national security and corporate goals. Several of the principals in the Boeing case have alternated between jobs with the government and with the giant aerospace firm.
As a result, "this type of thing goes on all the time," one defense official says, referring to the Boeing case. But "nobody gets caught," partly because such security breaches rarely come to light. Thus, defense officials jumped on the Boeing case as a way to issue a warning, even though the secret that may have been compromised wasn't a major one.
Based on interviews with about 50 people, many under oath, agents from the Pentagon's Defense Investigative Service produced an account of the leak.
The saga began last March 20, investigators say, when the staff of Seymour Zeiberg, deputy undersecretary of defense for strategic and space systems, began work on a memo entitled "MX and Alternativesc for President Carter. A day or two later, Peter Hughes, a former Boeing empolye currently on the staff of the House Armed Services Committee, told Boeing's. O'Rourke that he understood the report has gone to the president.
Over the next few days, O'Rourke learned that the report was still being drafted and that one of the alternatives, if adopted, could sharply reduce the amount of new bussiness potentially available to Boeing.
The MX is a big new ICBM with up to 10 nuclear warheads. The Air Force wants to deploy the MX to modernize its current force of 1,000 smaller Minuteman missiles, which are stationary in underground silos. Because defense officials believe these silos will become vulnerable to attack from increasingly accurate Soviet missiles, they want to make the MX missiles mobile. A mobile MX system would cost about $20 billion to build and deploy.
At the time of the incident, Boeing was competing to become the prime contractor for the MX program, as it had been for the Minuteman. In a decision unrelated to the security investigation, the Air Force subsequently selected Martin Marietta Corp. to supervise development and construction of the missile. But Boeing still might win large contracts for aircraft or construction if the administration proceeds with plans for mobile deployment.
Pentagon investigators reconstruct the Boeing case this way:
While checking the tip from Hughes about the draft memo, O'Rourke discovered that one of the MX alternatives that Pentagon civilians were preparing for the president involved placing the Lockheed Corp. Trident missile, an ICBM designed for launch form submarines, into existing Minuteman silos. Such a move -- which now seems highly unlikely -- would sharply reduce Boeing's opportunities to participate in the program.
Then O'Rourke visited some Air Force officers to discuss the memo for the president. Although the officers were involved in the MX project, they apparently lacked detailed knowledge of what was being drafted for Carter, O'Rourke suggested that the Air Force should make some contribution to the memo.
On March 23, Maj. Gen. Charles Kuyk, then the head of operational requirements in the Air Force Research and Development Office, got what defense investigators call a "bootleg" copy of the closely held memo from Hua Lin, a Boeing employe on leave to work in the Pentagon's Weapons Research and Development Office. Kuyk gave the copy to Lt. Col. Kenneth Van Dillen, one of the officers O'Rourke had already told of the draft, with instructions to analyze it for top Air Force brass.
On the same day, Plymale, the Boeing aerospace marketing vice president, discussed the memo with Hughes, the Hill staffer who had initially tipped Boeing officials to the report. The next day, Plymale asked O'Rourke to get a copy of the memo.
Several days later, O'Rourke asked Van Dillen for a copy of the memo. The Air Force officer refused to hand one over, but he did allow the Boeing man to read it and take notes. From these notes, O'Rourke wrote the report that was transmitted by telecopier to Plymale in Seattle.
Van Dillen declines to comment about the case.
On March 28, Plymale talked to Zeiberg, whose office had written the memo, at a conference in California and discussed aspects of the memo in such great detail that the Pentagon official concluded that Plymale had read the memo. When Zeiberg asked how the Boeing man had obtained his information, Plymale said he had found on his desk a telecopied report in a brown envelope delivered by an unknown source.
Pentagon officials say that Plymale's "fabrication" about receiving the information from an unknown source was the first step n a concerted campaign to impede the investigation of Zeiberg's report of a suspected leak.
The efforts included the destruction of evidence and other steps to hinder the inquiry, investigators say.
Ironically, the memo Boeing obtained was never sent to President Carter. "It was too technical," a defense official says. "A simpler one went."