Business Desk

This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.

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IN THE COURTS


EX-BOEING CFO PLEADS GUILTY IN CONTRACT SCANDAL


Boeing Co.’s former chief financial officer pleaded guilty yesterday to illegally hiring a top Air Force procurement officer who admitted giving the company preferential treatment on a $23 billion tanker contract. Michael Sears, 57, of Chicago, pleaded guilty to a single count of aiding and abetting illegal employment negotiations. Sears faces up to five years in prison when he is sentenced January 21, but his lawyer, James Streicker, estimated that under federal guidelines Sears probably faces a six-month sentence at most. Sears admitted that he offered Darleen Druyun, one of the Air Force’s top contract officers, a six-figure executive position at Boeing while she was reviewing whether Boeing should get a $23 billion contract to provide new refueling tankers to the Air Force. “Sears’ secret employment negotiations … struck at the heart of the integrity of the multi-billion dollar defense acquisition process,” U.S. Attorney Paul McNulty said. Druyun, 56, of Vienna, Va., was sentenced in October to nine months in prison. She admitted that she provided an inflated price to Boeing on the contract as “a parting gift” and that she had helped Boeing obtain inflated deals on previous contracts. At the same time she intervened to get her daughter a job at the company and later to keep her from being fired for poor performance.


– Associated Press


CONNECTICUT AND MASSACHUSETTS SUE MALL MANAGER OVER GIFT CARDS


Connecticut, Massachusetts, and New Hampshire authorities yesterday sued North America’s largest shopping mall owner, alleging Simon Property Group Inc.’s gift cards include fees and an expiration date that violate the states’ consumer protection laws. Among the properties Simon owns is the Crystal Mall in Waterford, Conn. Connecticut Attorney General Richard Blumenthal said the company violated state law by subtracting $2.50 a month from Crystal Mall gift cards that had an unused balance after six months, and charging a $7.50 fee to reactivate an expired card. “Card purchasers intend to give a gift to friends or loved ones, not to an already wealthy mall owner,” said Blumenthal, who was joined in Connecticut’s lawsuit by state Treasurer Denise Nappier and Consumer Protection Commissioner Edwin Rodriguez. “State law, as well as logic and fairness, demand that gift cards retain their value just like dollars in a drawer,” Mr. Blumenthal said. Connecticut’s lawsuit, like Massachusetts’ filing, is in response to a federal lawsuit Simon filed Friday. The company’s lawsuit seeks to confirm that its Simon Visa Giftcard is regulated by federal law, not state laws. “Simon has taken this action specifically to protect the liability of consumers to continue to purchase the very popular Simon Visa Giftcard,” the company said in a statement. Simon’s prepaid cards are sold in 35 states at 159 malls, according to Simon’s lawsuit. The cards can be used at any location worldwide where Visa debit cards are accepted, including locations not affiliated with Simon’s malls.


– Associated Press


NATIONAL


LONG-DISTANCE CARRIER GLOBAL CROSSING POSTS LOSS, REVENUE FALLS


Global Crossing Ltd. on yesterday reported a third-quarter loss of $102 million as pricing competition pushed the long-distance carrier’s telecom revenue down 1 percent from the second quarter. The Florham Park, N.J., company which emerged from bankruptcy last December, reported revenue of $696 million in the third quarter of 2003. Adjusted for an accounting change, revenue fell 9 percent from $676 million in the third quarter last year. These figures exclude the results of the Global Marine Systems business, which Global Crossing sold in August. In afternoon trading, shares of Global Crossing dipped 41 cents, or 2.7%, to $14.65, on the Nasdaq Stock Market. Global Crossing’s third-quarter loss of $102 million includes results from Global Marine. That loss narrowed from a second-quarter loss of $112 million, due largely to reduced losses from Global Marine, reduced costs in accessing other carriers’ networks and lower taxes, the chief executive, John Legere, said on a conference call.


– Associated Press

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This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.


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