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Boeing's drone unit to pay $25 million to settle fraud charge that was sparked by whistleblower complaint

Dominic Gates, The Seattle Times on

Published in Business News

According to the court filing, O’Hara was stymied as he tried to uncover pricing and other data needed to validate contracts, and when he pushed for answers his managers grew obstructive and hostile. In fall 2014, he filed a complaint to the Boeing Ethics hotline, expressing his concern about Insitu’s deficient accounting practices.

Though the complaint should have been a protected communication, Boeing Ethics sent an email to Insitu’s Human Resources department identifying him, he said.

“Within a few weeks, I was terminated,” O’Hara said Tuesday in a phone interview from his home just outside Bingen. “They made up some stuff, slanderous charges that had no basis in fact.”

He was told then that he could not reapply to work anywhere at Boeing. His career ended, he lost the extra years his Boeing pension would have accrued.

Boeing did not respond Tuesday to a request to comment on the alleged failure of the ethics program, which it touts as a safe way for employees to anonymously report activities that are illegal or pose safety issues.

O’Hara said Insitu executives constantly asked him to sign off on cost and pricing data, but he refused because he wasn’t given validating data.

“The U.S. government was able to get it and that’s how they validated the fraud that was going on,” he said.

He recalled challenging an executive who asked him to change the pricing on a contract under the DOD’s Foreign Military Sales program to sell drones to the Netherlands, telling the executive to do so might be fraud.

“When I’m bidding on an FMS contract, I’m going through the U.S. Defense Department,” O’Hara said. “I have to comply with U.S. regulations. It’s a matter of trust between military allies.”

 

The court filing states that over the course of his time at Insitu, he refused to sign more than 100 cost certifications because of his concerns about their accuracy. Instead, senior executives including the chief financial officer signed the documents.

O’Hara said after the DOJ took over the investigation in 2019, Boeing Corporate finally stepped in and “cleaned house,” leading to an extensive turnover of top Insitu executives over the past two years.

Boeing declined to comment on the executives’ departures or why they left.

O’Hara started at Boeing in 1973 in Wichita, Kansas, and worked his way up from the factory floor, earning two industrial engineering degrees and a business management degree after he moved to Seattle. Over his Boeing career, O’Hara said, he devised the procurement accounting processes now used internally across Boeing.

He said he only learned after initiating his legal action — known as a qui tam case — that it allows for the whistleblower to get a share of the proceeds if successful.

“That wasn’t my motivation,” O’Hara said. “It was personal ethics and integrity.”

O’Hara, 65, said it’s been a “rough five-and-a-half years,” during which he couldn’t talk about the case to allow the investigation to proceed. He said he feels vindicated by the outcome.

He and his wife now own and run a historic bed & breakfast near Bingen.

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