Death by chopper

Boeing pays $61 million to settle a whistle-blower lawsuit.

BRETT ROBY FELT he had to get Boeing's helicopters down from the sky before they fell out of it. "My primary goal of this litigation," says the 44-year-old former Ohio engineer, "was to insure the safety of the men and women who fly in these aircraft by keeping [the helicopters] out of the air."

To that end, he's succeeded: Boeing's Army Chinook helicopter fleet has been partially grounded since January as mechanics painstakingly inspect each of the 800 troop transports for cracked rotor parts that Roby first brought to the military's attention in 1993.

And now Roby—laid off in 1994 by a Boeing subcontractor, he says, for blowing the whistle—has succeeded anew. He just earned $10.5 million for himself and $43.5 million for taxpayers in a record $61.5 million settlement with Boeing, which was accused of trying to hide the flawed parts.

Boeing last week insisted it settled the complicated federal whistle-blower lawsuit to avoid further litigation—not because the company wanted to avoid a court ruling on whether Boeing knowingly approved the use of defective parts on Army helicopters for 10 years and abetted the deaths of five US Army soldiers. "Right," deadpans one of Roby's private attorneys, Frederick Morgan of Cincinnati, "it's just coincidence" that Boeing decided to settle now, after five years of legal wrangling, rather than face an Ohio judge next month when a public trial was to begin.

The August 3 out-of-court settlement effectively concludes what began as a David v. Goliath clash. Roby's attorneys took 400 depositions and engaged Boeing corporate lawyers in endless motion-to-motion combat that left another Roby attorney, Jim Helmer, reeling over "one of the hardest-fought cases we have seen. Boeing was represented by dozens of lawyers who did everything they could to defeat us." (Roby's attorneys logged 27,000 billable hours and will earn $7.5 million from the deal.)

The case involved two False Claims Act lawsuits: one filed by Roby alone in 1995 under a law that dates back to Abraham Lincoln and allows citizens to sue for government fraud on behalf of all taxpayers, the other filed by the US government in 1997 after it joined Roby to charge Boeing, a US defense contractor, with civil fraud. The suits claimed Boeing knowingly supplied cracked gears made of faulty material for the Army's CH-47D Chinook helicopters in the 1980s and 1990s (see "Con air," SW, 2/25/99).

In at least one instance, it was a deadly error, the government says. According to an amended claim filed just before the settlement, the US alleges that Boeing in 1985 knowingly installed faulty parts on a Chinook that later crashed in the midst of the undeclared war against the Sandinista government of Nicaragua. Exploding in flames December 8, 1988, while airborne, the transport fell onto a hillside near La Ceiba, Honduras, killing five soldiers on board. An investigation determined the cause was Boeing's faulty parts, says the US, asserting Boeing delivered the chopper to the Army "knowing it contained nonconforming transmission gears."

At least two other crashes, nonfatal, were also cited in the suits. Although Chinook crashes during the Gulf War and training exercises left 15 soldiers and two Boeing engineers dead, none were directly linked to faulty parts. The D model Chinook, which can carry 33 soldiers, has logged 650,000 flight hours since 1982.

ROBY CLAIMED BOEING was aware of the faulty Chinook gears for at least five years; the US later alleged the company had known for 10 years. The gears were manufactured by two Boeing subcontractors, Speco Corp. of Ohio (where Roby worked) and Litton Precision Gear of Illinois, later bought outright by Boeing.

A quality control engineer, Roby says he discovered the flaws in 1993 following a series of crashes that included the 1988 Honduras explosion (of a Chinook with Boeing/Litton parts) and 1991 and 1993 crashes in Saudi Arabia and Fort Meade, Maryland (Chinooks with Boeing/Speco parts), in which two people were injured. The causes were tracked to faulty transmission gears crucial to setting the chopper's tandem rotors spinning.

Roby worried more choppers faced similar fates. But the company and Boeing, he says, hushed up the imperfections by concealing documents and threatening Speco with retaliation if it didn't keep quiet. His own persistence to correct the flaw—and his complaint to the Defense Inspector General's Office—led to the loss of his job in 1994, he claims.

Boeing denies it had advance knowledge of the cracked gears. But Justice Department lawyers said they had documented proof Boeing knew the parts were bad before approving them for flight. Attorney Morgan says that proof led to the agreement: "It's our sense that this is one of the largest settlements ever in the defense arena," he observes, "one where the government sued for the actual value of the aircraft lost [two choppers destroyed, one badly damaged]. It was groundbreaking in that way."

Boeing has made military choppers for a half century to much acclaim and profit: The company does $10 billion annually in assorted defense work, including a new $76 million pact to modernize the Chinook fleet.

The Chinook case isn't completely over, either. Boeing demanded and got approval to appeal about $19 million of the settlement that was based on earlier court rulings over cost liability. "So in that sense," says Morgan, "the case will go on for a couple more years."

Unfortunately, without a trial, other questions also linger, most importantly: Was Boeing so corporately callous that it hid production flaws even at the risk of soldiers' lives? That was the basic legal posit of Roby, who now lives in Florida and suffers from an unrelated life-threatening spinal disease. A partial answer for him comes from Justice Department official David Ogden, who says the alleged fraud "demonstrates the tragic consequences that can occur when faulty parts are sold to the Defense Department. The lives of our service members, not only dollars, are at stake." (The Pentagon can still assess separate penalties on the US's number two defense contractor, ranging from fines to suspension from bidding).

In a statement Boeing says it "continues to deny the allegations in these cases. Boeing believes that it acted not only legally but also ethically and responsibly in addressing the issues covered by this litigation." It settled "in the best interests of both Boeing and the Army."

"They did the right thing in settling the suit—with their largest customer of course [the US government]," attorney Morgan notes wryly. But "Boeing is, let's just say, no white knight."

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