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Dragon Lady's multibillion dollar retirement party. The heartbreaking Ballad of Darleen Druyun, aka "When Air Force Procurement Officials Go Bad," is sung by Anne Marie Squeo and J. Lynn Lunsford (How Two Officials Got Caught by Pentagon's Revolving Door, WSJ, sub. req'd.):

Darleen Druyun was a hot prospect when she retired from the Department of the Air Force in November 2002.

In three decades in various acquisition roles there, the lanky, no-nonsense civilian administrator had negotiated billion-dollar weapons contracts and amassed valuable insights into Pentagon policy and the strengths and weaknesses of defense contractors. At a retirement lunch at an Italian restaurant in northern Virginia near the Pentagon, more than a hundred industry executives and government officials gathered, some anxiously scanning the room for clues as to where she might land next.

By that Nov. 21 fete, Ms. Druyun had quietly talked about job opportunities with three of the nation's largest defense contractors -- Boeing Co., Lockheed Martin Corp. and Raytheon Co. Lockheed President Robert Stevens attended. So did Boeing Chief Financial Officer Michael Sears and James Albaugh, the head of the company's space and defense businesses. When Mr. Sears sat down at Ms. Druyun's table to chat with her family, other executives in the room took note.

[...]

Talk of a job at Boeing for Ms. Druyun began as early as Sept. 3, 2002, more than two months before she recused herself from overseeing Boeing contracts, according to people familiar with the investigation.

While those job negotiations were under way, she was also continuing to push a controversial $21 billion plan to have the government lease and later buy 100 Boeing-made airplanes. Separately, Pentagon investigators are looking into whether Ms. Druyun broke the law by sharing a rival company's information with Boeing.

[...]

Ms. Druyun remained a high-profile champion of the defense industry during the 1990s cutbacks in military spending. In the wake of the Sept. 11 terrorist attacks and the subsequent slump in the aviation industry, Ms. Druyun became an active promoter of a plan to have the Air Force lease 100 modified Boeing jets as air-refueling tankers. Critics of the plan said it was merely a bailout for Boeing and would cost taxpayers billions more than buying the planes outright. Top Air Force officials, including Ms. Druyun, contended the tankers were urgently needed to replace an aging fleet and that leasing would get them into service sooner.

On Sept. 3, 2002, an e-mail arrived in Mr. Sears's inbox. The sender, a 26-year-old employee in Boeing's St. Louis operation named Heather McKee, wrote that "mom" was making post-retirement plans. In a tone described by people familiar with it as a "friendly heads-up," the note told Mr. Sears that the woman was negotiating with other companies but would rather "live in Chicago," where Boeing is based.

[...]

...Boeing turned over more than 8,000 e-mails, including many involving Ms. Druyun. Many of the e-mails, which Mr. McCain later made public, indicated that internal Air Force memos about the tanker negotiations were passed on to senior Boeing executives. One April 2002 e-mail from a Boeing executive working on the deal to a colleague said that Ms. Druyun had told Boeing executives about rival company bids. The e-mail said that Ms. Druyun had told the company "several times" that rival European Aeronautic Defense and Space Co.'s offering of Airbus planes "was $5 million to $17 million cheaper" per aircraft than Boeing's tanker bid.

[from the timeline accompanying the article:]

Sept. 2002: Her daughter, a Boeing employee, e-mails Boeing CFO Michael Sears about her mother's retirement and job search. "

Oct. 2002: Ms. Druyun negotiates a NATO aircraft order that went to Boeing. Two days later, she and Mr. Sears meet to discuss employment. She agrees to sell her house to a Boeing attorney working on tanker deal.

Nov. 2002: Ms. Druyun officially recuses herself from Boeing decisions, retires mid-month.

Postscript: One of the ironies of the Druyun debacle is that her highly unethical mentor Michael Sears was about to publish a business self-help book that dealt with management ethics. Publisher Wiley has since pulled the web page advertising Sears's book Soaring through Turbulence.

Forget content. As Jack Welch and dozens of other market cannibals have demonstrated, the celebrity of power is all you need to get a book contract. With a publisher as clueless as Wiley, Michael Sears proved that the metastatic corruption of defense contracting can be parlayed in more ways than one would expect.

{ 9:34 AM }

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