/ 12 December 2003

Boeing faces new investment accusations

Boeing’s corporate reputation took a fresh knock last week when it emerged that the aerospace group had invested up to $250-million in venture capital funds run or staffed by Washington insiders.

The company, which has lost both its chief executive and finance director in the past two weeks, is reported to have invested $20-million in Trireme Partners, a fund run by Richard Perle, a prominent Pentagon adviser.

Perle, a former assistant defence secretary under president Ronald Reagan and, until recently, chairperson of the defence policy board advising the Pentagon, is alleged to have campaigned in favour of Boeing’s bid for an $18-billion air-to-air refuelling contract for the United States Air Force after getting the cash.

Trireme invests in defence technologies but Perle has denied receiving any compensation from Boeing for writing an article in The Wall Street Journal this year backing Boeing’s offer for the US Air Force to lease 100 of its tankers.

The paper said this week that Boeing had also invested $20-million in the Paladin Capital group, a fund where James Woolsey, a former CIA director and a member of the defence policy board, is a principal.

Boeing, which has put money into 29 such venture capital funds, has denied it is doing so to gain access to decision-makers in the US government. It insists it simply wants access to new technologies for both military and civil products.

The refuelling contract, since approved by President George W Bush and comprising the lease of 20 aircraft and purchase of 80, has been a boon to Boeing. The group is expanding its defence business to match its commercial aviation wing. — Â