Morning Smoke: Financial Crisis Inquiry Commission Disagrees About Bottom Line

 

Where there's smoke, there's fire. POGO's Morning Smoke is a collection of the previous day's investigations, scoops, and opinions related to the world of government oversight. Have a story you'd like to see included? Contact POGO's blog editor.

Financial Crisis Inquiry Commission to release report Thursday amid dissent on panel by Zachary A. Goldfarb and Brady Dennis [The Washington Post]

A push to quickly boost offshore drilling safety by Jennifer A. Dlouhy [Hearst Washington Bureau]

BP Oil Spill Report Spurs Congressional Inquiry -- and Claim of Stonewalling by Paul D. Thacker [Politics Daily]

Fed Faulted for Lax Mortgage Regulation Before Financial Crisis by Craig Torres and Lorraine Woellert [Bloomberg]

Goldman Sachs Got Billions From AIG For Its Own Account, Crisis Panel Finds by Shahien Nasiripour [HuffPost Reporting]

Bailout Watchdog Probes Suspected TARP Fraud at 64 Banks by Ben Hallman [Center for Public Integrity]

Bill to Make Fannie Mae, Freddie Mac Subject to FOIA Introduced by Scott Hodes [The FOIA Blog]

Regulators Move to Bolster Oversight of Hedge Funds by Ben Protess [DealBook]

Indictment Continues Obama Administration’s War on Leaks by Shane Harris [The Washingtonian]

New border surveillance project faces same problems that doomed SBInet by Aliya Sterstein [Nextgov]

The FDA And Its Pilot Pharma Fraud Program by Ed Silverman [Pharmalot]

Defense deputy lists department's needed reforms by Dave Majumdar [Federal Times]

Obama’s SOTU pulls punches on defense spending by Matthew Leatherman [The Will and the Wallet]

If A Dollar Falls in The Pentagon... by Colin Clark [DoD Buzz]

 

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[Dfens]

The judge sentenced Gowadia to 32 years for each of two counts of communicating national defense information to aid a foreign nation.

She also gave him 20 years for each of four counts of violating the arms export control act, and 10 years for each of five lesser counts including money laundering. He received five years for one count of conspiracy and three years for two counts of filing a false tax return.

But Mollway ordered the sentences to run together.

Gowadia has already spent more than five years at Honolulu's federal detention center after he was ordered held without bail following his 2005 arrest.

The engineer helped design the propulsion system for the B-2 bomber when he worked at Northrop Corp., now known as Northrop Grumman Corp., between 1968 and 1986. -- Yahoo News

But if Boeing does it, it's ok?

Last April in Everett, in a tense meeting with an investigator sent by Boeing headquarters, a small group of 787 engineers dropped a bombshell.

The engineers, veterans of Boeing’s work on the B-2 stealth bomber two decades ago, told investigator Rick Barreiro that technology and know-how developed for that secretive military program would be used in manufacturing the company’s newest commercial jet.

The engineers refused to sign forms declaring that the 787 program is free of military data. One said he feared signing would leave him open to federal indictment.

Their assertions set off flashing red lights at Boeing. Federal law prohibits U.S. companies from letting militarily sensitive technical expertise go abroad.

Yet Boeing's entire global manufacturing plan for the 787 hinges on having foreign suppliers build large structures out of advanced composite materials.

The standoff with the engineers caught Boeing managers by surprise. “We all underestimated the amount of screening we needed to do” for military technology, said Walt Gillette, head engineer and vice president for airplane development on the 787.

In the months that followed, outside lawyers pored over 1970s-era documents in search of proof that some key manufacturing techniques originated in the commercial business, not in military programs.

And to satisfy the letter of the law, Boeing workers have embarked on some surreal tasks.

One example: Boeing's B-2 work showed that the plasticized carbon-fiber tape used to make composites can be safely frozen and stored for up to a year — twice as long as previously thought.

That fact is now well-known in the composites industry, yet 787 engineers can't inherit that knowledge from the B-2 program, Gillette said. So they conducted fresh tests to prove a result they already knew.

"It is our clear intent to make sure we comply with the law," Gillette said.

The underlying issue is whether Boeing's plan to outsource high-tech 787 composites manufacturing could put U.S. government technology in the hands of either enemies or potential future economic competitors.

Yet Boeing's internal response to Barreiro's findings suggests a reverse perspective: that the laws designed to protect military secrets create barriers to legitimate sharing of commercial technologies, which executives see as essential in the globalized aviation marketplace. -- Seattle Times