Business leaders make commitment to corporate ethics.At the beginning of this year, NDIA NDIA National Defense Industrial Association NDIA New Doha International Airport (Qatar) President Larry Fatrell unveiled the association's "Statement of Industry Ethics," putting ethical conduct on par with shareholder profits and noting prior lapses that have damaged the industry's reputation. He noted that maintaining the highest ethical standards throughout this industry has never been more important to the country. The industry's unique relationship with the Defense Department mandates a code of ethics Code of Ethics can refer to:
Some view the Darleen Druyun conflict-of-interest scandal as the highest profile public contracting scandal since Operation III Wind of the 1970s and 1980s. One obvious lesson of this scandal--which came to a head in 2005 and resulted in prison sentences, resignations and overturned contract awards--was renewed attention to the particulars of the federal criminal conflict of interest statutes. Perhaps an even more valuable lesson to industry may be found in the results of the numerous government and internal investigations and resulting remedial actions undertaken by Boeing and the Defense Department. These results and actions have far exceeded the parameters of mere compliance with a particular law or regulation and, at Boeing's expense, focus much needed attention on managerial aspects of company ethics codes, best practices, policies and procedures Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental . Partly as a result of Boeing's compliance and ethics program History There has been a long history of business and government excesses and subsequent legal, public and political reaction. Response to criminal misconduct has resulted in legal sanctions, governance practices, compliance standards and cultural transformation. , the Air Force did not recommend the company's suspension or debarment de·bar tr.v. de·barred, de·bar·ring, de·bars 1. To exclude or shut out; bar. 2. To forbid, hinder, or prevent. . Boeing fired Druyun and its chief financial officer, Michael Sears, and made full disclosure to the Air Force inspector general and the Department of Justice. This is a key lesson of that affair--the critical importance of prompt and appropriate corrective action, including disciplinary measures, where instances of unethical conduct Behavior that falls below or violates the professional standards in a particular field. In law, this can include Attorney Misconduct or ethics violations. The standards for conduct to be observed by attorneys can be found in the Code of Professional Responsibility; members of are discovered. The value of a solid ethics program also was cited last year when the Air Force lifted the suspension of the Boeing business units involved several years ago in Procurement Integrity Act (PIA pi·a n. The pia mater. pi  al adj. )
violations, which were related to the misuse of proprietary information
in connection with the Evolved Expendable Launch Vehicle The Evolved Expendable Launch Vehicle (EELV) program was a United States government, primarily a Department of Defense–sponsored effort to develop at least one family of space launch vehicles, that would meet the long term needs of the military and fulfill commercial contract.
While remedial actions necessarily focused on the particulars of PIA compliance and the parameters for the protection and disclosure of proprietary data, a major factor in the decision to lift the suspension was Boeing's timely and effective response to the incident. That response included independent reviews of Boeing's ethics and business processes, followed by implementing recommendations from those reviews. The result proved the value of constant self--monitoring, external review, communication, self-policing and, equally important, the decisive response of senior management and the board. More lessons can be derived from lesser-known events. Last year witnessed a surge in enforcement actions under the Foreign Corrupt Practices Act Foreign Corrupt Practices Act An amendment to the Securities Exchange Act created to sanction bribery of foreign officials by publicly held US companies. Foreign Corrupt Practices Act (FCPA FCPA Foreign Corrupt Practices Act FCPA Fairfax County Park Authority (Virginia) FCPA Fujitsu Computer Products of America FCPA Fair Campaign Practices Act FCPA Fellow of CPA Australia FCPA Florida Concrete & Products Association ) by the Department of Justice and the Securities and Exchange Commission, including an action against the Titan Corporation, which settled criminal and civil charges relating to a bribery scheme to benefit the president of a West African nation. Titan pled guilty last year to improper payments by a Titan foreign sales agent to a government official in the Republic of Benin. As a result, Titan was required to pay a significant fine, adopt an FCPA compliance procedure--which was not in place before the violations--and was required to retain an independent consultant to review the company's FCPA compliance procedures and to adopt and implement the consultant's recommendations. Again, independent review followed by remedial action was deemed vitally important to the government in resolving this transgression that caused real harm to Titan. The terms of this settlement underscore the importance of proactive internal and external review, as well as remedial action to detect transgressions and mitigate them when they occur. Other ethics scandals during the past year included: * The arrest of the head of the Office of Federal Procurement Policy on false statement charges, arising from statements made to a government ethics official and the General Service Administration's inspector general. * A guilty, plea by an Army and Air Force Exchange Service The Army and Air Force Exchange Service (or AAFES) is an agency of the United States Department of Defense. Its mission is to provide quality merchandise and services of necessity and convenience to authorized customers at uniformly low prices, and to generate reasonable procurement official and contractor for wire fraud. * The indictment of a former employee of Kellogg, Brown & Root and its subcontractor for fraud relating to a contract award to supply fuel tankers for military operations in Kuwait. * The indictment and guilty pleas of numerous defendants in a GSA (1) (Global mobile Suppliers Association, Sawbridgeworth, U.K., www.gsacom.com) A membership organization of suppliers of GSM products and services. Its goal is to promote GSM as the worldwide mobile communications standard. See GSM Association and GSM. corruption probe in Chicago. * The indictment of a Pentagon employee and his co-conspirators for defrauding the U.S. Army in Korea and accepting kickbacks. One lesson from all of these cases is that chief executives and government leaders must remain vigilant and encourage ethical consciousness in their organizations from the top down. NDIA was the first organization to formally conclude that the "chief ethics officer" must always be the CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , that training and ethics focus must be a priority at every level of business and that it must always start at the very top. NDIA ETHICS COMMITTEE John D. Illgen Vice President, Northrop Grumman Simulation Technologies Corporation Tofie M. Owen Jr. Senior Vice President for Corporate Development, SAIC SAIC - http://saic.com. James L. Pierce Consultant (Former Chairman & CEO, ARINC ARINC Aeronautical Radio, Inc. ARINC Aircraft Radio Incorporated ARINC Aeronautical Research Incorporated Inc.) Thomas W. Rabaut President & CEO, United Defense LP Joe R. Reeder, Esq. Attorney Greenberg Traurig LLP LLP - Lower Layer Protocol Lawrence A. Skantze General Lawrence Albert Skantze is a retired United States Air Force four star general and was commander, Air Force Systems Command at Andrews Air Force Base, Maryland. Skantze was born in 1928, in the Bronx, New York. Gen., USAF (Ret.) W. John Stoddart Executive Vice President and President Defense, Oshkosh Truck Corporation William Usher Maj. Gen., USA (Ret.), President. National Correlation Working Group TRUSTEES Dr. Vincent J. Ciccone President & CEO, RASco Inc. Mary E. Lacey Program Executive Officer, National Security, Personnel System James McAleese Principal, McAleese & Associates Lewis A. Palumbo Senior Vice President, U.S. Business Development, Raytheon Company Joe Reeder and David Hickey are attorneys at the international law firm of Greenberg Traurig. The opinions expressed here are solely those of the authors and are not intended to provide legal advice or represent the view of NDIA or the NDIA Ethics Committee. |
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