Boeing is a household world in the United States. Anyone who flies has probably traveled on a plane manufactured by the U.S. based aviation company. Few people know that Boeing also has billion dollar defense department contracts. The company’s military subsidiary is called Boeing Defense, Space & Security. Within the military community they are known for producing AWACS surveillance aircraft, F-18 fighters, helicopters, the B1-B bomber, refueling tankers and even Air Force 1.
The company spends millions of dollars putting on a good public face. Recently when I visited the Smithsonian I was immediately struck by Boeing’s sponsorship of some of the exhibits. Boeing portrays itself as a company committed to being a good corporate citizen and delivering value to taxpayers. The story they don’t tell, however, is how they are one of the worst violators of the federal False Claims Act, America’s leading antifraud statute designed to protect taxpayers and the government from fraud.
There have been many instances of Boeing fraud, although in most cases the company is allowed to pay a massive fine without any admission of wrongdoing. The Project on Government Oversight’s Federal Contractor Misconduct Database details 68 instances of fraud and misconduct between 1995 and now. Boeing has racked up over $1,458,789,469 in penalties in that time.!
The relationship between the Defense Department and Boeing is complex. Uncle Sam doesn’t like to get ripped off but it also needs Boeing. The company is the exclusive provider of many aircraft and weapons systems.
We have previously reported on other Boeing cases. [Our blog is text searchable, use the search bar to find other “Boeing” stories.] With 68 major violations, we simply can’t keep up!
Today’s post comes from a recent federal court decision in Seattle. The case involved a whistleblower retaliation complaint, the real story is in the allegations of fraud made by the whistleblower.
Ralph Johnson Accuses Boeing of Whistleblower Retaliation
Ralph Johnson is a true American hero. He began working at Boeing in 1989 and slowly worked his way up the ladder. During his employment, he served two tours of duty as an Army reservist in Iraq. While on active duty he was wounded and is permanently partially disabled.
After 21 years with Boeing, Ralph finally made it to a management position. He received that promotion in 2010.
He claims that as a new manager, he noticed “charging irregularities on a Boeing Defense Department contract for maintenance of KC-46 air tankers. Like a good employee, he reported those problems to senior management.
He says that shortly after reporting these problems, he began to receive lower scores on his performance evaluations. Despite decades of meeting or exceeding expectations, suddenly his grades were lower.
Unfortunately, we have seen this behavior before. Some companies punish workers who report wrongdoing and fraud. Why? We think that Boeing was profiting from these charging irregularities. Big companies don’t want anyone messing with their profits, even if they are collecting those profits illegally.
In the summer of 2013, Ralph Johnson noticed a more serious problem. A line worker told him that fuel valves not certified for flight were being falsely certified for in-flight use. Behavior like that endangers lives.
From what we understand of Boeing’s maintenance process, a certain number of fuel valves are pulled off the line and subjected to rigorous lab tests. It is like Ford pulling an engine of the assembly line and sending it to the track for quality control testing. That means over revving it, over heating it, etc. That is fine and even a good idea as long as that beat up engine doesn’t go back on the line and into some unsuspecting motorist’s new car.
Ralph says that after lab testing, the valves should never be used. Instead, he says that Boeing was putting them on military planes. In his words, Despite Defendant Boeing’s test and evaluation laying out the protocol above, “[I] learned that Boeing Quality Assurance Manager Latifah Crawford altered maintenance documents, and directed subordinates to falsify certification of the fuel valves by removing the ‘TEST USE ONLY’ warning label. It is possible that some ‘TEST USE ONLY’ fuel valves were installed on KC-46 tankers. In-flight failure of a ‘TEST USE ONLY’ fuel valve would be catastrophic.”
Ralph Johnson showed his true patriotism by reporting the problem to both the Boeing ethics hotline and the Department of Defense Office of Inspector General.
Readers can guess what happened next. Within a couple months he received an even lower evaluation score and was suddenly transferred to the night shift despite his years of seniority. They also moved him to a facility miles away.
Boeing claims they moved Ralph for “career development” purposes. Worse hours, much longer commute and to make things worse, they took away his flex time and travel reimbursement. (Ralph Johnson was caring for his wife who was suffering from cancer.) That doesn’t sound like career development to us. It sounds like Boeing wanted to make an example of him so that others wouldn’t blow the whistle.
Ralph had a family to support so he went along with the move, not that he was offered much choice. Predictably, he found more charging problems at the new facility. He reported those as well. (In an interesting side note, Boeing would later admit some of the things he reported were “suspect” but Ralph says they took no action against the wrongdoers.)
Shortly thereafter reporting new contract irregularities, Ralph was demoted, suspended without pay, lost his management duties and began receiving corrective action memos. He grieved these actions and won most of the grievances.
As of May 2017, Ralph was still employed by Boeing but barely.
Like many companies, Boeing has a non-retaliation policy. Boeing’s website says,
“Speaking up is a cornerstone for building an open and accountable workplace culture. At Boeing, we believe that creating an environment where employees are comfortable raising issues and concerns without fear of retaliation enables openness which can lead to improved business performance and inspire greater innovation… Retaliation against employees who raise concerns is not tolerated and is cause for appropriate corrective action, up to and including dismissal.”
In our experience, companies like Boeing often only pay lip service to anti-retaliation policies. Some companies would gladly risk an adverse employment action instead of paying tens of millions of dollars in fines under the False Claims Act.
Overcharging the government is bad enough. Companies that overcharge Uncle Sam are really cheating you and I, the taxpayers. The real crime, however, is the act of installing unsafe jet engine parts onto military aircraft and unfortunately, this is not the first time we have heard this story.
To be clear, we do not know whether Boeing installed faulty fuel valves on KC-45 tankers. Ralph Johnson didn’t file a whistleblower complaint, rather he filed a retaliation complaint. We are basing this post on the available federal court records. Despite having 68 prior major incidents of fraud or misconduct, this case won’t get added to the list as the case is solely about how Boeing treated Ralph for reporting the fraud and not about the fraud itself.
Call for Aviation Industry, Boeing Whistleblowers
Aviation workers and contractors with inside information about fraud in government contracts may be eligible to obtain large cash whistleblower awards. The federal False Claims Act pays whistleblowers between 15% and 30% of whatever the government collects from wrongdoers. To qualify for an award, you must have inside (original source) information about fraud involving a government program or funds.
Aviation whistleblowing claims that are eligible for awards include:
- Contracts to build military aircraft or weapons systems
- Military aircraft maintenance contracts
- Contracts to build runways or airport facilities that receive public monies (most do)
- Contracts to provide air transportation to government workers
A separate whistleblower program is available for inside information about aviation related companies paying bribes to foreign government officials. For example, a U.S. plane maker that paid bribes to a foreign official in exchange for an aircraft order. Under the Foreign Corrupt Practices Act and SEC Whistleblower Program, whistleblowers can also receive up to 30% of what the government collects in penalties for those violations.
Ripping off the government is illegal. When the fraud involves shoddy parts or maintenance, the stakes are especially high. Our military women and men deserve the best from us, that includes making the aircraft they fly are safe and well maintained. That is the least we should expect from companies that get receive billions of dollars of taxpayer dollars.
To be eligible for a whistleblower award, you generally must be the first to file and your complaint must be based on inside knowledge.
Ralph Johnson reported his concerns to Boeing and the Defense Department directly. As he later found out, calling a company’s ethics line doesn’t always work despite a company’s promise that it “welcomes” whistleblowers. Unfortunately, most companies don’t.
Reporting wrongdoing directly to the government doesn’t always get results either and it certainly doesn’t get you an award. In our experience, government auditors are swamped. They can’t investigate every complaint. And reporting directly doesn’t get you a large cash award either. The only way to get an award is to file a False Claims Act complaint.
Not only does filing a False Claims Act whistleblower complaint make you eligible for an award, it also has a much better chance of stopping the illegal behavior. False Claims Act claims go to the top of the investigations pile. If the government doesn’t intervene, the whistleblowers own lawyer has the right to prosecute.
Want to learn more? Visit our aviation whistleblower cornerstone page. If you want to know if you have a case, contact us directly. For more information contact attorney Brian Mahany at online, by email at or by phone at 414-704-6731. All inquiries are protected by attorney – client privilege and kept strictly confidential.