“Boeing Ruling on Whistleblower Firing May Discourage Leaks to News Media” – Bloomberg

Boeing Ruling on Whistleblower Firing May Discourage Leaks to News Media By Ann Woolner and Karen Gullo – May 11, 2011 9:19 AM PT Two Boeing Co. (BA) auditors in 2007 thought they found weaknesses in the security of the firm’s financial reporting data. They complained, setting off a chain of events that may chill whistleblower leaks to news outlets. Nicholas Tides and Matthew Neumann say they told Boeing it might be violating the Sarbanes-Oxley investor-protection law by urging them to say data controls were in place that weren’t. Ignored and then pressured to look the other way, they said, the two spoke with a Seattle Post-Intelligencer reporter who had left messages asking about auditing problems. “Computer security faults put Boeing at risk,” a subsequent headline said. The airplane maker, already suspecting leaks, investigated and fired the men for unauthorized talking to the news media. They sued, citing Sarbanes-Oxley’s whistleblower protection, and lost. An appeals court said last week that the law doesn’t protect tipping off journalists. The ruling is now the law in nine western states. It will make hiding company wrongdoing easier, according to Ken Paulson, a former editor of USA Today who is president of the First Amendment Center, which follows free-speech issues. “Fewer whistleblowers will share information with the news media,” Paulson said. “There is no faster path to reform or to disclosure of corporate misdeeds than putting that information on the front page of a newspaper.” The Seattle paper covers Chicago-based Boeing, the world’s largest aerospace company, because its headquarters used to be in Seattle and it has aircraft factories in the area. Bill...

“Boeing’s Sarbox woes continue as whistleblower emerges” – Fiercesarbox.com

> Case study: Boeing and Sarbanes-Oxley  July 24, 2007 The Seattle P-I offers a rare look at what goes on inside a major company struggling to comply with Sarbanes-Oxley. This is a must-read article. Rarely, is the pain reported so clearly. For all its wizardry with jets, the company has struggled with Sarbox. One employee described the process as “pure hell.” The same scenario is likely playing out at other companies. The company approached it like it was designing a new plane. But a deep rift between the finance and IT emerged and really hampered the process–something we’ve been warning about. The finance side said the IT side was too rigid; the IT guys said the finance guys kept changing their minds. PricewaterhouseCoopers and Jefferson Wells apparently were at loggerheads often. Sound familiar? Really this is a great example of all that can go wrong. For all the effort and pain, there are still significant deficiencies–despite millions of dollars and a bevy of high-priced consultants–that the firm must grapple with. A good place to start would be with the compliance culture. Of course that is the hardest thing to change. Boeing’s Sarbox woes continue as whistleblower emerges November 5, 2008 — 8:17pm ET | By Jim Kim Recall that Boeing ended up in some PR hot water when its hometown newspaper ran a long series detailing its Sarbanes-Oxley compliance woes. Rarely does internal activity explode in the media as such. More Sarbox woes have just cropped up in the form of a whistleblower. Nicholas Tides, an IT employee, has alleged in a lawsuit that Boeing was disingenuous in its efforts to...

“IT Whistleblower Hits Boeing With Retaliation Suit” – Law 360 Newswires

IT Whistleblower Hits Boeing With Retaliation Suit A former Boeing Co. internal auditor who alleges that he was fired for speaking to the press about data security flaws has sued the company for wrongful termination. Nicholas P. Tides sued the Chicago-based aerospace company on Friday in the U.S. District Court for the Western District of Washington, alleging that Boeing fired him after he gave information to the Seattle Post-Intelligencer about purported information technology flaws. The newspaper used information from Tides and other auditors on a confidential basis to publish an investigative report detailing Boeing’s failures to shore up its computer networking and software systems, leaving the company vulnerable to fraud and theft, according to Tides’ attorney, John J. Tollefsen. The termination was illegal under the whistleblower provision of the Sarbanes-Oxley Act of 2002, the complaint said. “The auditors firmly believe they were just trying to do their job and help Boeing,” said Tollefsen, of Tollefsen Law PLLC. Boeing failed internal Sarbanes-Oxley audits for three fiscal years from 2004 to 2006 because of ineffective controls for its IT systems, the complaint said. The company faced the possibility of having to report its data security issues publicly if it failed to meet the Sarbanes-Oxley audit standards for a fourth consecutive year, the complaint said. “As a consequence, Boeing was likely to suffer catastrophic negative financial impact because material weaknesses in IT controls affect the perceived integrity of Boeing’s financial statements,” the complaint said. To avoid that, the company hired PriceWaterhouseCoopers to supervise the auditors, according to the complaint. But PriceWaterhouseCoopers designed internal controls to ensure that Boeing would pass the audit...

“Fired employee sues Boeing in whistle-blower case” – The Seattle Post Intelligencer

Tides v. Boeing Retaliatory firing of whistleblower in U.S. District Court in Seattle http://seattlepi.nwsource.com/business/385975_boeingsuit01.html Fired employee sues Boeing in whistle-blower case Says company violated audit standards Last updated October 31, 2008 10:15 p.m. PT By ANDREA JAMES  P-I REPORTER Editor’s note: The reporter who wrote this story is named in the lawsuit as the reporter who talked with Nicholas Tides. A fired Boeing employee struck back at his former employer Friday with a federal lawsuit leveling serious charges against the Chicago-based aerospace firm. Among other things, the lawsuit filed in U.S. District Court in Seattle charges that Boeing was disingenuous in its efforts to comply with the federal Sarbanes-Oxley Act of 2002. It also charges that Boeing hired PricewaterhouseCoopers auditors who violated government-mandated auditing standards. In mid-2007, former Boeing information technology auditor Nicholas Tides raised concerns to several managers about “potentially illegal conduct.” Boeing’s director of human resources told him, “We’d appreciate it if you’d just shut up,” the lawsuit says. Such a comment would contradict The Boeing Co.’s public assurances that the company welcomes employees to raise ethics concerns. Separately, the Seattle P-I was working on a report about Boeing’s struggles with the 2002 law. In July 2007, the P-I reported that Boeing had failed to prove it could properly protect its computer systems against manipulation, theft and fraud. Such protection is required under the Sarbanes-Oxley Act, enacted in the wake of several corporate scandals. In September 2007, Boeing fired Tides for having had a conversation with the P-I before the stories were published. Tides worked in Boeing’s St. Louis office. “Instead of deciding to comply with SOx...

“Boeing faces second whistle-blower suit” – United Press International

Boeing faces second whistle-blower suit SEATTLE, Dec. 3 (UPI) — A former Boeing employee filed suit against the company in Seattle, claiming he was fired for speaking to reporters about ethical violations. Boeing told former internal auditor Mathew Neumann he was fired for unauthorized contact with the media, the Seattle Post-Intelligencer reported Wednesday. Neumann said Boeing ignored his warnings that it was violating auditing standards, then fired him after he spoke with reporters who showed up at his office uninvited to confirm information about a story detailing the company’s troubles complying with the Sarbanes-Oxley Act of 2002. The suit mirrors a suit filed in October by Nicholas Tides, a Boeing former information technology auditor, who claims he was fired after complaining to managers the company was not in compliance with the new auditing standards. Boeing said Tides “never communicated to his supervisors, investigators or Congress a belief that Boeing violated any of the anti-fraud statutes,” outlined in the law. Boeing said it fired Tides for “violating company policy regarding the release of confidential company information,” the newspaper said. Neumann’s lawsuit says he explained the problems to a human resources director in August 2007. In response, the director pointed to a pillow embroidered with the expression, “Get Over It,” the lawsuit claims. © 2008 United Press International, Inc. All Rights Reserved. Share...

Qui Tam Law Overview

The traditional name for cases which attempt to recover money defrauded from the king is “Qui Tam” litigation. Qui Tam is pronounced “kee tam” or “kway tam”) and is an abbreviation from the Latin “qui tam pro domino rege quam pro sic ipso in hoc parte sequitur” meaning “who as well for the king as for himself sues in this matter.” History of Qui Tam Laws in the United States Qui tam legal actions can be traced back as far as 13th Century England where they were used by private citizens to gain access to the king’s court. The U.S. legal system, derived from the British system, allowed qui tam actions since the nation’s founding in 1776. They were rare. During the Civil War, Congressional hearings investigated widespread instances of military contractor fraud including defective products, substitution of inferior material, and illegal price gouging. At the urging of Abraham Lincoln, a former practicing lawyer, Congress enacted the Civil False Claims Act in 1863 as a weapon to fight procurement fraud. This law has also been known as the “Lincoln Law” and the “Informer’s Act.” The False Claims Act was designed to entice whistleblowers to come forward by offering them a share of the money recovered. Even though this Act was enacted to combat military contractor fraud, it was applicable to all government contractors, federal programs and any other instances involving the use of federal revenue. The Act allowed any person to act as a “private attorney general” and sue for recovery of the money taken. The named plaintiff on the action is the United States Government. The one filing...