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USA: Long Fall for Pentagon Procurement Star


When at the peak of her power as a top Air Force weapons buyer, Darleen Druyun helped direct the Air Force's $30 billion procurement budget. Last month she stunned military and industry leaders by admitting that she gave Boeing preferential treatment for years before taking a job with the company.


by Renae MerleThe Washington Post
November 14th, 2004

In the macho world of the Pentagon, Darleen A. Druyun was rare: a woman who had scaled the heights of power, controlled billions of dollars in weapons programs and could punish or reward global corporations and the men who ran them.

Once the most feared woman in the world of military contracting, Druyun, 57, helped direct the Air Force's $30 billion procurement budget -- nearly three times the size of the Army's.

She was at the peak of her power as a top Air Force weapons buyer in 1999 when she scolded leaders of Lockheed Martin Corp., the world's largest defense contractor, for some of its work on satellites and rockets. Her tone was blunt: One program had "pitiful" software and a company proposal had a "crappy design." The incident contributed to the early retirement of one Lockheed executive and the company rushed to address Druyun's concerns, according to several people familiar with the situation.

But now it is Druyun who has fallen from grace. In April, she pleaded guilty to a conspiracy charge for negotiating for a job with Boeing Co. while still supervising the company's work for the Air Force. Last month she stunned military and industry leaders by admitting that she gave Boeing preferential treatment for years before taking a job with the company.

The Pentagon announced last week that because of Druyun's illegal behavior it has begun investigations into all of her contracting-related actions during her nine years as the Air Force's deputy acquisition chief. The Defense Department also began the largest review of how it buys weapons since the investigation of influence peddling in the 1980s known as Operation Ill Wind. The fallout could cost the government hundreds of millions of dollars as companies unfairly ruled out of contracts seek restitution for the costs they incurred during the bidding process.

Since she was sentenced to nine months in prison, a portrait of Druyun has emerged from court papers and interviews with her associates of a woman who acquired power beyond her status at the Air Force then walked over subordinates, humbled industry executives and sought personal advantage at government expense. Druyun is an imposing figure with a sharp -- and sometimes vulgar -- tongue, who was right at home in the male-dominated Pentagon world. Her renown as a tough government negotiator and stickler for the rules encouraged her superiors to rely on her judgment, according to industry insiders. For nearly 40 percent of her time at the Pentagon she had no supervisor at all. Her rise to power coincided with a government-wide push to build closer relationships with contractors as partners.

"I was surprised that someone who was around [during the Ill Wind investigation] would be in essence doing the same things that Ill Wind was all about," said Joseph J. Aronica, the lead prosecutor in that investigation, now a lawyer with Duane Morris LLP. "I guess these things in a way are cyclical. She may have thought no one was looking any more."

Druyun did not respond to letters and could not be reached by telephone to comment on this article. Her lawyer declined comment through his secretary.

Druyun began her career in government work in 1970 when she landed a job as an Air Force contractor negotiator at Warner Robins Air Logistics Center in Georgia. Her father, who had worked at the base for 40 years, was "instrumental" in getting her the job, according to court documents. Druyun's husband, William S. Druyun, is a retired Air Force official who was a mid-level manager at Falls Church-based General Dynamics Corp. before retiring in September.

For the next 20 years, she bounced between the Air Force, the Office of Management and Budget and NASA before being named the Air Force's deputy acquisition chief, a position she would hold until her retirement in November 2002.

But no sooner had she climbed the heights of Air Force procurement than she became involved in a controversy over work she had done three years before. She and four other Air Force officials were accused by Pentagon inspector general of improperly funneling $349 million to McDonnell Douglas Corp. in 1990 to keep the C-17 transport aircraft program on track. After a separate Air Force investigation found no wrongdoing, Defense Secretary Les Aspin dismissed one general and disciplined three others, saying the program was poorly managed. Druyun was cleared.

Gen. Merrill A. "Tony" McPeak, the Air Force chief of staff at the time, said he petitioned Aspin on Druyun's behalf. "I thought she was a strong person, giving strong leadership in the acquisition community, so if I was going to save one person I thought" it should be Druyun, said McPeak, who retired in 1994 and is now president of an aerospace consulting firm. "She was the one who would come into my office and tell me I was wrong about something. . . . She had the stomach to not be a yes-woman."

Druyun then reinvented herself as a reformer, developing "Lightning Bolt" initiatives that aimed to make Air Force weapons procurement more efficient and stressed the importance of a company's past performance in awarding new contracts. The Air Force said the program saved $20 billion.

The fortunes of defense contractors rested on Druyun's decisions on competitions, her policy decrees and her awards of bonuses. In 1999, she emerged as the Pentagon's top advocate of the F/A-22, a boon to Lockheed, the fighter jet's manufacturer. In 2001, Druyun eliminated Raytheon Co. from a $2.5 billion competition to build the small-diameter bomb, surprising industry handicappers and realigning the competitive landscape.

An official at Druyun's level would not normally decide the outcome of as many competitions as she did or get involved in the nitty-gritty of contract negotiations, according to people in the industry. Those tasks were left to underlings who made the decisions themselves or offered their recommendations. "Once in a blue moon there will be a mess where you can't resolve an issue and the issue will float up the chain of command," said John W. Douglas, the former assistant Navy secretary for research, development and acquisition.

Druyun, however, actively discouraged her staff from making recommendations, according to a former defense official who worked with her. "She began accreting this authority up to her," said the official, who spoke on the condition of anonymity because of the ongoing investigations. "She would say, 'Don't send it up with a recommendation, just send it up with information.' "

The power creep did not escape the notice of her superiors. In one or two cases, "I was surprised she was getting involved, but they were large [contracts] and . . . she was a hands-on kind of person," said Jacques Gansler, the Pentagon's acquisition chief from 1997 to 2001. "People above and around her in the Air Force should have been overseeing her."

The rough edges of Druyun's personality also emerged. Staff members who seemed unprepared or provided Druyun with inadequate or faulty information would be frozen out of later meetings, according to government and industry officials who worked with her. "Those who have feared going to see the 'Dragon Lady' only feared if they didn't have their act together, or were trying to 'cover' an error," retired Air Force Brig. Gen. Lawrence A. Mitchell said in a letter of support included in court records. "She justifiably had no time for 'BS-ers' or liars."

Gradually, Druyun's allegiances began to shift as her personal and professional lives became entangled. When her daughter's fiance, Michael McKee, was looking for a job in 2000, she contacted a longtime Boeing associate, Michael M. Sears, the company's chief financial officer, for help, according to court records. McKee was hired for a position in St. Louis. Druyun also helped her daughter, Heather, land a job at Boeing two months later -- a position created for her, the records show.

After years fostering a reputation as the defense contractors' toughest adversary, Druyun felt indebted to Boeing. She then made a series of decisions that were rooted in her sense of gratitude, she told the court.

In 2000, she agreed to increase the size of a Boeing contract for C-17 transport planes by $412 million. Two years later, she restructured the company's program to modernize 18 NATO planes used as airborne command posts, and approved a $100 million payment.

In 2001, Druyun picked Boeing over Lockheed to upgrade the avionics on C-130 transport planes. The decision stunned industry analysts because Lockheed had built the planes and was considered the most probable choice to modernize them. Industry analysts pointed to the competition as proof that Boeing's strategy to apply commercial technology to the military sector was working and that Lockheed was failing to capture the Air Force's imagination.

But Druyun soon had a new boss: Marvin R. Sambur, who managed the $1.5 billion defense business of ITT Industries Inc., was appointed Air Force acquisition chief in late 2001.

Sambur said he was surprised to learn that Druyun, not her subordinates, was deciding the outcome of competitions and contract bonuses, which often made up a company's profit margin. Druyun also hoarded information and kept the decision-making process secret, he said in an interview. He felt, Sambur said, like summer help.

"At the beginning when I came in here, a lot of people in the meetings would look to her to see if she agreed with what I had to say," Sambur said. "The recognition was . . . she's going to be here for a long time and I may be like the other acquisition people who stayed here for a relatively short period of time or didn't have the type of background necessary to run this."

Sambur said he began dismantling Druyun's power. First, he stripped her of the ability to decide competitions, then took away her authority to negotiate final contract terms or change requirements.

With her authority diminished, Druyun told Sambur that she intended to retire. Federal regulations restricted what kind of job Druyun, now the civilian equivalent of a lieutenant general, could take in the defense industry, but she soon forged a handshake agreement to join the executive ranks of Lockheed, the Pentagon's largest contractor.

Meanwhile, Druyun also met with Lockheed's largest rival, Boeing, about a job, according to court documents. She initially used her daughter Heather as intermediary. In e-mails to Sears, Heather said that her mother would consider moving out of Washington but insisted on a position with considerable responsibility.

Druyun soon reneged on her agreement with Lockheed, according to court records, and accepted a position at Boeing as a vice president. She had barely moved in when she became the center of controversy again.

In her final months at the Pentagon, Druyun was the chief negotiator of a $20 billion program to lease, then purchase, Boeing 767s converted into refueling tankers. The proposal had attracted the attention of the Senate Commerce Committee chairman, John McCain (R-Ariz.), who called the proposal a welfare program for Boeing and criticized Sambur and other Air Force officials for their handling of the deal.

Critics said it was more than a coincidence that Druyun, the chief Air Force negotiator, would take a $250,000-a-year job with Boeing. Boeing publicly defended the tanker proposal and its employment of Druyun, but also hired an outside law firm to investigate the hiring. The firm found that the employment talks had occurred while Druyun was overseeing Boeing contracts -- a violation of federal law. Druyun was fired and pleaded guilty, sparing prosecution of her daughter, who was named as an unindicted co-conspirator. Sears, who negotiated Druyun's employment, is scheduled to plead guilty on Monday.

Druyun would still not reveal the entire truth for several months -- and only then after failing two polygraph tests. After initially admitting only to a technical violation -- holding improper employment discussions -- she acknowledged years of preferential treatment of Boeing. She agreed to a higher price on the tanker deal as a "parting gift" to the firm, she told the court.

"Getting to the truth of matters can sometimes be difficult," Druyun's lawyer, John M. Dowd, told the judge before she was sentenced. "There is no denying [Darleen] made a serious mistake and there is no denying she had difficulty coming to grips with certain matters."





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