Boeing Baddie Gets a Wrist Slap

We don't usually give our readers advice on how to hone their criminal skills, but the sentencing news from former Boeing (NYSE: BA  ) CFO Michael Sears confirms a belief I've held for years.

If you're going to break the law, at least wear a suit and tie. And most importantly, do your thieving from the U.S. government.

That, my friends, is how you can engineer a multi-billion-dollar taxpayer rip-off and end up with a four-month sentence plus a $250,000 fine. (Note that the smaller fish in this filthy pond got twice the time.)

Sound stiff to you? Well, I don't know how pleasant that four-month stint in the pen will be, but don't shed too many tears for Sears on account of that $250,000 -- at least, not until you read Boeing's proxies. From 2000 until 2002, his total compensation came to $10.8 million.

If you're still in the dark, I'm talking about the way Boeing gamed a huge Pentagon contract -- victimizing taxpayers like you and me -- by offering an influential government buyer a fancy executive job. Unfortunately, this isn't Boeing's only major indiscretion over the past few years. Stealing classified info from competitor Lockheed Martin (NYSE: LMT  ) ? C'mon, that's just part of the game, right?

While investors might be breathing a sigh of relief now that this particular affair looks officially over, I wonder whether they should. How many chances do you give a company to do the wrong thing? This week, a judge publicly worried about the fact that other Boeing execs had simply treated this massive fraud as if it were "business as usual." My guess? That's because it is.

If Congress or the Pentagon shows a bit of backbone, the continuing investigation might have fallout for future Boeing contracts, but even if this doesn't take a chunk out of the top line, these frauds ought to raise questions with investors. What's your comfort level with Boeing? If this company will bite the very hand that feeds it -- repeatedly -- what makes you, Barbara Odd-lot, think it will be good to you?

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Seth Jayson thinks there are a few million shareholders out there who could use some of Dr. Phil's tough love on co-dependence and enabling. At the time of publication, he had positions in no firm mentioned. View his stock holdings and Fool profile here. Fool rules are here.


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