Boeing CEO asserts commitment to ethics

WASHINGTON – Boeing Co.’s chief executive, W. James McNerney Jr., told Congress on Tuesday that a recent $615 million settlement with the government over ethical lapses was tough but fair and that the Pentagon’s second-largest contractor was attempting to move beyond this “dark cloud” in its history.

Since Boeing admitted to hiring a high-ranking Air Force official illegally and to possessing Lockheed Martin Corp. proprietary documents during a competition, the company has implemented a robust ethics program, McNerney told the Senate Armed Services Committee. “We aspire to do more than just stay out of trouble,” he said.

But Paul J. McNulty, deputy attorney general, acknowledged in an exchange with Sen. John McCain, R-Ariz., that the company’s hiring of another former Air Force official is still under investigation. “Did this person discuss employment with Boeing while he was still with the Air National Guard?” McCain asked.

“It is a matter of ongoing criminal investigation,” McNulty said, declining to name the Air Force official. McNerney also declined to name the official but said he no longer worked for Boeing.

McCain and other members of the committee also questioned some aspects of the settlement, including Boeing’s contention that most of it, $565 million, was tax deductible. McNerney said the company decided not to pursue the deduction, which could have been worth $200 million. McNulty said the Justice Department leaves questions about the taxability of settlements to the Internal Revenue Service.