NCJ Number
64665
Journal
BUSINESS AND SOCIETY REVIEW Issue: 28 Dated: (WINTER 1978-79) Pages: 36-40
Date Published
1979
Length
5 pages
Annotation
EXCERPTS FROM A PUBLIC REPORT ISSUED BY BOEING ARE PRESENTED AS EVIDENCE OF THAT COMPANY'S QUESTIONABLE PAYMENTS TO FOREIGN OFFICIALS TO FACILITATE SALES OF ITS PLANES.
Abstract
THE SECURITIES AND EXCHANGE COMMISSION ACCUSED BOEING OF PAYING SEVERAL MILLION DOLLARS TO OFFICIALS OF FOREIGN GOVERNMENTS AND PRIVATELY OWNED FOREIGN AIRLINES, USING DOUBLE-ENTRY BOOKKEEPING TO CONCEAL PAYMENTS, AND MAKING SECRET DEPOSITS IN SWISS BANK ACCOUNTS WITHOUT INFORMING ITS STOCKHOLDERS. AS PART OF THE SETTLEMENT, BOEING WAS REQUIRED TO MAKE PUBLIC A REPORT ABOUT ITS PAYOFFS. ALTHOUGH BOEING CONTENDED THAT IT WAS NOT GUILTY OF BRIBERY, THE COMPANY PROMISED TO DO NOTHING ILLEGAL IN THE FUTURE. IN THE EXCERPTS FROM THE REPORT, BOEING DESCRIBES ITS USE OF CONSULTANTS TO SELL PRODUCTS AND FACILITATE FINANCING ARRANGEMENTS IN SAUDI ARABIA, KUWAIT, SYRIA, NEPAL, EGYPT, GREECE, HONDURAS, AND KOREA. THESE INVIDIDUALS WERE USUALLY CONNECTED WITH THE GOVERNMENT IN VARYING CAPACITIES OR WERE OFFICERS OF A FOREIGN AIRLINE. IN CASES WHERE THE FEES HAD BEEN PAID INTO LIECHTENSTEIN CORPORATIONS, BOEING CLAIMED IGNORANCE ABOUT THE PERSONS WHO WERE RESPONSIBLE FOR THE ARRANGEMENTS. OTHER INSTANCES WERE CITED IN WHICH PAYMENTS WERE MADE INTO A BANK ACCOUNT LOCATED OUTSIDE OF THE COUNTRY IN WHICH THE CONSULTANT LIVED. NO EVIDENCE OF ILLEGAL ACCOUNTING PRACTICES WAS DISCOVERED BY THE COMPANY, ALTHOUGH SEVERAL AGREEMENTS ADMITTEDLY WERE NOT EXECUTED ON COMPANY FORMS AND PAYMENTS WERE RECORDED ONLY BY RECEIPTS, CANCELLED CHECKS, OR BANK TRANSFER INSTRUCTIONS. BOEING MAINTAINED THAT IT COULD NOT MONITOR ALL ACTIVITIES OF FOREIGN CONSULTANTS, BUT HAD BEEN ASSURED BY MANY THAT NO UNLAWFUL OR IMPROPER PAYMENTS HAD BEEN MADE. ALSO NOTED ARE SPECIFIC INDIVIDUALS WHO RECEIVED PAYMENTS, PAYOFF ACTIVITIES OF OCCIDENTAL PETROLEUM, AND EFFECTS OF THE PAYMENTS DISCLOSURE ON BOEING STOCK. (MJM)