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Prominent federal judge resigns for position at Boeing
[May 10, 2006]

Prominent federal judge resigns for position at Boeing

(Chicago Tribune (KRT) Via Thomson Dialog NewsEdge) WASHINGTON _ Boeing Co. said Wednesday it has hired prominent federal appeals court judge J. Michael Luttig to be its top in-house lawyer _ an unconventional choice for the aerospace giant which is seeking to restore its reputation after high-profile ethics scandals.

Judge Luttig, once on the short list for a nomination to the Supreme Court, will succeed Douglas Bain as senior vice president and general counsel. Bain plans to retire on July 1 after 24 years with the company. He spent the last six as general counsel.

In his resignation letter to President Bush Wednesday, Luttig said the job was a "singular opportunity" and that he felt he was staying within the realm of public service by moving to work for a defense giant and "American icon" Boeing.

Bain's departure comes as the company is negotiating a comprehensive settlement of two federal criminal investigations into its defense business. Boeing may end up paying a fine as large as $500 million to resolve allegations that it improperly acquired proprietary documents from rival Lockheed Martin Corp., and illegally recruited a senior Air Force official while she still had oversight of billions of dollars in other Boeing contracts.

Such a fine would be one of the biggest financial penalties ever levied on a U.S. company for misconduct. Boeing Chief Financial Officer James Bell said last month that the company was working with federal authorities on those matters but denied press reports that a settlement was imminent.

Boeing spokesman John Dern said the 57-year-old Bain is leaving voluntarily after expressing the desire to step down as early as last year. Bain's exit is not connected to the lack of a settlement after several months of negotiations, Dern said.

Indeed, some said settlement talks are far enough along that they could be completed by the time Bain leaves. He will continue to lead the company's team of lawyers negotiating with the Justice Department until his July 1 departure, Dern said.


After Boeing moved its headquarters to Chicago in 2001, Bain kept his home in Seattle where his family still resides. He has two stepdaughters and a son from a previous marriage. A source close to Bain said he is devoted to his family, flying home every weekend.

"He's been general counsel for six years during an intense time, and he decided to step back from the rigors of life as a general counsel," Dern said.

Bain's tenure was marked by a litany of legal and regulatory woes that cost two chief executives their jobs and resulted in a prison term for the chief financial officer. Two other employees have been indicted in an alleged scheme to obtain thousands of pages about Lockheed's rocket programs.


Bain did not mince words when he described the consequences of the unethical conduct at a Boeing leadership retreat in January.

"There are some within the prosecutors' offices that believe Boeing is rotten to the core," he said, according to a copy of the speech leaked to the media. "They talk to us about pervasive misconduct and they describe it in geographic terms of spanning Cape Canaveral to Huntington Beach to Orlando to St. Louis to Chicago."

The candid assessment was backed by Chairman and Chief Executive Jim McNerney who has made restoring Boeing's image one of his top priorities.

Since taking over in July, McNerney has gradually turned over the management team, including replacing Boeing's chief lobbyist in Washington. Judge Luttig is his first significant executive hire from outside the company. It was a bold move, legal experts said, considering Luttig has never worked inside a corporate legal department.

But given past misconduct, "you want someone as clean as they come to represent the company," said Robin Sparkman, editor in chief of Corporate Counsel magazine. "Lutting is one of the few people who has already been vetted. You can hire him and know he's going to be Mr. Clean."


Luttig, 51, served for 15 years on the Richmond, Va.-based U.S. Court of Appeals for the 4th Circuit, where his legal reasoning and analytical skills have made him a vanguard of the conservative intellectual movement.

He has long been considered one of the leading contenders for a Supreme Court seat in a Republican administration. President Bush interviewed him for the job last summer, before selecting Chief Justice John Roberts and Justice Samuel Alito.

Luttig said in a telephone interview that he had not been looking to leave the appeals court, but that the opportunity to head to Boeing was too good to pass up. He said it had nothing to do with his Supreme Court prospects, which had dimmed after Bush opted for the less controversial Roberts and Alito.

"No one can or should plan his life around the possibility of a Supreme Court appointment," Luttig said. "And my decision has nothing whatever to do with the Supreme Court process."


He said a friend of Boeing lead director Ken Duberstein contacted him about the job. After Luttig expressed interest, the friend delivered the news to Duberstein. Luttig and Duberstein have been friends since working together in the George W. Bush administration where they helped prepare David Souter and Clarence Thomas for their Supreme Court confirmation hearings.

Luttig flew to Chicago last month to talk about the position with McNerney and decided this week to take the job.

"I had to look out across the rest of my life and ask, did I want to remain on the court forever or would I consider another exceptional opportunity?" Luttig said. "That's really what it came down to."


In resigning, Luttig wrote the Boeing opportunity was "sheer serendipity" and that its role in national defense and security would enable him to continue, in effect, in public service.

"I think of Boeing as an American icon," Luttig said in the interview. "The opportunities to serve in such a capacity with such a company simply don't come along very often."

The timing of the move also works from a personal perspective. Luttig's 14-year-old daughter enters high school in the fall. He and his wife Elizabeth also have a 10-year-old son.

As a judge, Luttig earns $171,800. Annual compensation for a general counsel at a Fortune 500 company like Boeing is about $1 million in cash plus stock, Sparkman said.


Luttig, a Texas native, became a federal appeals court judge at 37 after spending much of his young professional life at the Supreme Court. Just months after graduating from Washington & Lee University, he took a position in the court's judicial intern program. He developed a close and lasting relationship with Chief Justice Warren Burger, who encouraged him to go to law school at the University of Virginia.

He later clerked for Antonin Scalia who was then a judge on the District of Columbia appeals court and later for Burger. He was nominated to the bench by the elder Bush in 1991, after heading up the Justice Department's Office of Legal Counsel.


(c) 2006, Chicago Tribune.

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Distributed by Knight Ridder/Tribune Information Services.


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