Boeing, founded in $1916,$ has long been an admired and successful company. Cited by management

books for its excellence, the experts praised Boeing$$s ability to "stick to its knitting," $*$ with

"knitting" being $($originally$)$ the commercial airline market which was responsible for $90\%$ of its

revenue. In the $1940$s$,$ Boeing expanded by entering the military aircraft market. However,

government contracting does carry its share of minefields. Those ethical minefields in defense

contracts were the focus of the $1985$ Packard Commission report on government waste that famously

included the $$600$ toilet seats and $$400$ hammers. Public outrage not only fueled additional oversight

and regulation but also provided the impetus for the Defense Industry Initiative $($DII$),$ a voluntary

group that was the beginning of the focus on ethics and compliance beyond just the $1977$ focus on

bribery and foreign corruption. Boeing was one of the original $32$ signatories to the initiative and

became one of the original $25$ paying members. $*$ The DII developed a code of ethics for defense

contractors and has continually worked with companies to develop and maintain ethical cultures.

The Boeing$-$Lockheed Competition for the U$.$S$.$ Satellite $($EELV$)$ Project

However, ironically, it was in the pursuit of military contracts just $10$ years following the DII that

Boeing had its first major legal and ethical missteps in its history. In $1996,$ Boeing and Lockheed Martin

were in a head$-$to$-$head competition for a multibillion$-$dollar government contract for furnishing the

rockets that are used for launching satellites into space $($a project referred to in the industry as the

Evolved Expendable Launch Vehicle, or EELV$).$ The satellites perform various functions and could be

communication or spy satellites.

It was during this competitive time frame for the rocket launcher project that Kenneth Branch, a space

engineer and manager at Lockheed facilities in Florida, traveled to McDonnell Douglas facilities at

Huntington Beach, California, for a job interview. $*$ McDonnell Douglas was working on the EELV

bid at the same time that it was being acquired by Boeing. Boeing's acquisition of McDonnell Douglas

had been finalized by the time of the Branch interview, but the logistics of acquisition had not yet been

completed $($it would be completed in August $1997).$ Boeing$$s acquisition of McDonnell Douglas and the

combination of Lockheed with Martin Marietta meant that the federal government would be dealing

with only two large contractors.

Near the end of his interview at McDonnell Douglas, Mr$.$ Branch showed the participants in the

interview process a copy of Lockheed's proposed presentation for the government project. Six months

after his interview, in January $1997,$ Branch began work at Boeing on the $$5$ billion EELV project. The

pressure for Boeing to win the contract became intense, and Boeing executive Frank Slazer, the

director of business development, encouraged Boeing employees working on EELV to develop $"$an

improved Lockheed Martin EELV competitive assessment.$*$ He also encouraged the employees to

find former Lockheed employees to get their thoughts and impressions about the project.