A former high-ranking Air Force procurement official was sentenced to nine months in federal prison yesterday after admitting that she approved excessive prices on contracts awarded to Boeing Co. to enhance her job prospects with the company.
Conceding that she lied to prosecutors, Darleen A. Druyun, 56, revealed that she committed the Air Force to buy 100 airplanes from Boeing at an inflated price of about $20 billion as a "parting gift" before her Pentagon retirement to ingratiate herself with her future employer. She also slipped to Boeing proprietary pricing information from a rival European bidder on the aircraft contract. Druyun awarded Boeing an unrelated $4 billion contract because she felt in debt to the company for hiring her daughter and future son-in-law, according to court documents. An "objective selection" process, she said, may not have picked Boeing from the four competitors.
In a quivering voice, Druyun apologized before U.S. District Judge T.S. Ellis III in Alexandria, telling the court she felt "shame and remorse" that her 30-year tenure as a government employee "has been tarnished. . . . I understand that this was wrong and I regret any damage my conduct may have caused to the Air Force."
Druyun's case is the highest-profile defense procurement scandal since the Operation Ill Wind investigation, which resulted in more than 60 convictions starting in the late 1980s. It is expected to ripple throughout the industry, renewing concern about the potential pitfalls of the revolving door between government and the defense industry. Chicago-based Boeing, the Pentagon's second-largest contractor, will likely face fresh questions about several of its contracts, and the procurement system that allowed Druyun to favor one company over another will come under sharper scrutiny.
The Air Force said it has already taken steps to ensure Druyun's conduct is not repeated, saying her long tenure allowed her to gain more power than was proper. "This was a case of an individual who engaged in personal misconduct and does not reflect the high levels of integrity and accountability within the Air Force acquisition community," said Col. Jay DeFrank, Air Force spokesman.
Druyun, a civilian, was at the grade of a lieutenant general when she retired and became vice president in charge of Boeing's missile defense systems in January 2003. Druyun's Boeing salary -- $250,000 plus a $50,000 signing bonus -- was nearly double the top Pentagon pay for her position.
Officials said Druyun admitted the extent of her deceptions only after being subjected to a polygraph test. She acknowledged altering her personal journal before turning it over to prosecutors. "She did great harm to the government, and that harm is continuing now," said Assistant U.S. Attorney Robert W. Wiechering.
In addition to nine months in prison, Ellis ordered Druyun to serve seven months in a community facility, which could include a halfway house or home confinement. She also received three years of probation. Prosecutors had asked for 16 months in prison. Before prosecutors uncovered her deceptions, Druyun was eligible for up to six months in prison or just probation.
Boeing said Druyun's admissions of years of preferential treatment to the company came as a surprise. "Our reputation is being tested once again," Harry C. Stonecipher, Boeing president and chief executive, said in a message to the company's 157,000 employees. "We don't know how this will come out; but whatever we find, we have the will and a process to deal with it."
"It's going to take time, but we'll get through this," Stonecipher said.
Boeing fired Druyun and its chief financial officer, Michael M. Sears, in November for illegally negotiating Druyun's employment with the company while she was overseeing several Boeing contracts. Sears was scheduled to plead guilty last month, but the hearing was postponed while investigators untangled Druyun's conflicting statements, a law enforcement source said.
Druyun oversaw thousands of contracts in her Air Force tenure, but the most controversial was the deal to lease then buy the 100 refueling aircraft from Boeing. Sen. John McCain (R-Ariz.), a chief critic of the deal, has complained that the Air Force acted as a advocate for Boeing and not taxpayers.
During the negotiations, Druyun contacted an unidentified senior Boeing official involved in the talks to discuss her daughter's job in the company's St. Louis office. Her daughter, Heather McKee, feared being fired over performance issues, according to court documents. After Druyun intervened, McKee was transferred to another position and the senior official continued to update Druyun on her daughter's performance, including informing her about a pay raise, the documents said.
McKee left Boeing voluntarily more than a month ago, but Druyun's son-in-law is still employed at the company, a Boeing spokesman said.
Druyun's misdeeds dated back to 2000, when she was seeking employment for her future son-in-law, according to court documents. At the time, Druyun was negotiating a price adjustment on Boeing's C-17 aircraft contract, which would reflect changes in labor or material costs. Druyun awarded Boeing a $412 million payment. She told prosecutors her decision was influenced by Boeing's assistance to her son-in-law.
Druyun's admissions will force Boeing to seek again to regain trust within the Pentagon and industry. A suspension of Boeing's space unit for unrelated misdeeds was expected to be lifted soon, but that is now unlikely, analysts said. "It's not like that company wasn't already under microscope; now it's an electro-microscope," said John A. Howell, a government contracts expert.
Boeing's 767 line, which would be boosted by the tanker deal, is back in jeopardy. Defense Secretary Donald H. Rumsfeld was expected to make a decision on the tanker lease after the election, but an advisory group Rumsfeld asked to study the issue, the Defense Science Board, agreed during a March meeting that tanker modernization could be postponed for up to 10 years, according to documents read to The Washington Post by sources familiar with the matter.
Investigations continue into the 100-aircraft deal. The Department of Defense inspector general is withholding from the Senate Armed Services Committee more than 100 e-mails from Marvin R. Sambur, the Air Force's acquisition chief, because they are "law enforcement sensitive" and have been referred to the U.S. attorney's office, sources said. A Defense Department spokesman could not be reached late yesterday for comment.