Darlene Druyun and Mike Sears Ethical Violation free essay sample

Misconduct Shocks the Defense Industry In 2003 misconduct of conflict-of-interest laws shocked the defense industry. Serious violations were committed at The Boeing Company by former top Air Force procurement official Darleen Druyun who admitted to helping The Boeing Company obtain a $23 billion tanker refueling contract in exchange for an executive job at the company. While verbally accepting a position with Lockheed Darlene Druyun did not disclose her job negotiations with a Mike Sears a Chief Financial officer while overseeing aerial tanker negotiations between Boeing and the U. S. Air force. This non-commitment to ethical behavior and compliance gave Boeing a competitive advantage while bidding on the contract. There were several ethical conflicts by both Darlene Druyun and Mike Sears. Mike Sears violated the company’s policy by approaching Darlene Druyun about joining the company, before she had disqualified herself from acting in her official government capacity on issues involving Boeing. This misconduct in the hiring procedure by Sears clearly violates the conflict-of-interest laws at Boeing. Darlene Druyun and Mike Sears secretly tried to conceal a deal to exchange an executive job at Boeing in exchange for the Tanker refueling contract, which violates procurement regulations (Procurement Integrity Act), stealing trade secrets related to several aerospace programs (Economic Espionage Act), fraudulent attempts to falsify contract documents (False Claims Act), and to commit fraud (Major Frauds Act). Not to mention conspiracy and aiding-and-abetting charges. Utilitarianism says that an act is ethical if its result increases total human happiness. The consequentialism of the utilitarianism theory for Darlene Druyun and Mike Sears was â€Å"Is it ethical to exchange an executive job for a high profile contract? † Both parties are going to benefit from the exchange and both parties will have something that they want. The pull begins with the participants honest, being well know, high ranking employees so there was an unwritten code of silence that resulted in employees failing to report suspected wrongdoing. The Categorical theory is ethical only if it is acceptable for everyone to put into practice. Yes, if this scandal was not brought to the attention of the Boeing and the U. S. Attorneys they may have gotten away with it. Pulling in the other direction, if everyone lied on bidding contracts and favored their each other the world would be in chaos. These two theories are contradictory and leave you to ponder if they are right or wrong, while the categorical theory proves to be unethical. The pull from the virtue theory challenges Boeings leadership to change the culture that allowed violations to occur and to handle the problem before it’s too late. Ethics and compliance are all of our responsibilities as the company motto vs. of the unwritten code of silence and the good old boy motto. The golden rule establishes a culture that ensures that there is no next time because if there not careful it can happen again. The investigations took six long years not to mention the world had changed their view of the Boeing Company. A newspaper headline read â€Å"Misconduct Shocks Defense Industry†. This National disgrace stands out, because this violation extends beyond favorable negotiations with Boeing. In this case, Darlene Druyun may have influenced the competition. Lockheed Martin, BAE Systems and Raytheon (in a unit later sold to L-3 Communications) were also in the running for the contract. Druyun never confessed that another bidder was the stronger competitor, but a statement lead the government to believe that another person on the panel may not have chosen Boeing. At that time, Lockheed Martin was building the C-130 while BAE Systems was working on an AMP-like program for KC-135s. In addition to working on the tanker negotiations with the Air Force, Druyun also chaired the NATO Airborne Early Warning and Control Program Management Board of Directors, which managed the NATO E-3A Airborne Warning and Control System (AWACS) program. Darleen Druyun was involved in the decision-making process that terminated changes made to evaluation factors including deletion of specific technical requirements. U. S. Attorneys presented compelling evidence that the two were collaborating to make sure their activities were kept a secret. Boeing investigated Druyun’s employment and when her name kept surfacing Boeing wanted to make sure the company’s hiring policies and procedures were followed. During the course of the investigation, the company discovered that both Sears and Druyun had been using Druyun daughter who was a Boeing employee in the Integrated Defense Systems department for several years. She was used as a mediator to relay messages. Boeing fired both Druyun and Sears the executive who hired her, last year after the company learned of their negotiations over Druyun’s job. The U. S. Justice Department reported that Prisoner 47614, Druyun plead guilty to one count of conspiracy, served nine months in prison in Marianna, Florida, seven months community confinement, and a $5,000 fine, three years of probation sentenced to and community service in April 2004. Druyun was to be sentenced Aug 6, 2004, but the sentencing was delayed to Oct. 1, 2004. Darleen received a stronger sentence because she lied to the prosecutors throughout the court process. Prisoner 70040, Mike Sears the Boeing senior executive plead guilty to one felony count of aiding and abetting, served four months in a federal prison in Oxford, Wisconsin, paid a fine of $250,000, two years of probation, and community service to. Also, when he was fired he forfeited approximately $5 million in equity-based compensation. Things could have been handled better by the company paying more attention to its compliance and ethics requirements. Boeing could start by educating leadership at Boeing, which in turn would educate the employees. This would challenge the Companys leadership to change the culture that allowed violations to occur in the first place. Stiffen the fines for violations. I think they got off the hook rather lightly, but that’s just my opinion. Establish a no repercussion rule to report violations and report suspected wrongdoing in an attempt to erase the unwritten code of silence. Although the acquisition proposal would have been a financial bonanza for Boeing, the theory pulls the other way when we stop to think that it would also have ultimately placed billions of taxpayer dollars at risk of abuse. Jim McNerney of the Boeing Company said it best â€Å"We as the leaders of the Boeing Company get to choose what kind of culture we are going to have. And we make these choices every day by what we do and frankly what we choose not to do. But the consequences of all those choices are our collective responsibility. †