Ex-officials charged with Boeing theft
By Peter Pae
Los Angeles Times
LOS ANGELES — Federal prosecutors filed criminal charges yesterday against two former Boeing Co. employees for allegedly stealing trade secrets, escalating an investigation into allegations that the aerospace company illicitly obtained documents from archrival Lockheed Martin Corp. to win a multibillion-dollar Pentagon missile contract.
As part of a highly unusual industrial espionage probe, former Boeing engineers Kenneth Branch and William Erskine were charged in U.S. District Court in Los Angeles with conspiracy, theft of trade secrets and violating the federal Procurement Integrity Act.
The allegations stem from a competition between Boeing and Lockheed in the late 1990s to win a contract for a new generation of Air Force missiles.
According to 26-page affidavit, Erskine recruited Branch, who worked for Lockheed, to bring proprietary Lockheed documents to Boeing. In exchange, he was promised a higher-paying job at Boeing.
"The charges against Mr. Branch and Mr. Erskine allege that they violated the fundamental rules of fair play," said U.S. Attorney Debra W. Yang. "By covertly using a competitor's secret information, they caused harm not only to Lockheed Martin, but also to the Air Force and taxpayers who finance government operations. Their improper conduct had huge ramifications because of the value of the contract."
Branch brought with him thousands of pages of documents, including cost rundowns of Lockheed's rocket, potential profit margins and a detailed analysts of operations, according to the affidavit.
Branch and Erskine are expected to be arraigned next month. If convicted of all three counts, they would each face maximum penalties of 15 years in prison and $850,000 in fines.
The former employees worked at operations in Huntington Beach, Calif.
Branch now lives in Florida, while Erskine has moved to Northern California. Neither could be reached for comment.
"We are cooperating fully with the investigation," Boeing spokesman Dan Beck said.
Lockheed spokesman Tom Jurkowsky said it would be "inappropriate" for the company to comment on the charges.
Boeing and Lockheed have been locked in a bitter five-year feud over the high-stakes competition to develop the so-called Evolved Expendable Launch Vehicle (EELV) program for the Pentagon.
In a major upset, Boeing won the lion's share of the launches in 1998, although Lockheed had been a prime source of military rockets for four decades.
