In the spring of 1999, when the Securities and Exchange Commission needed a staff accountant in its enforcement division, Douglas Boe figured he was the man.
Then 37 and an assistant controller in a division of Hughes Electronics Corp., Boe had an impeccable finance pedigree: a BS and an MS in accounting from the University of Virginia, an MBA from Indiana University, auditing experience at Arthur Andersen & Co., and wide- ranging assignments at Motorola Inc., AlliedSignal Inc., and Hughes. What’s more, he had a keen interest in the ongoing earnings- management crusade of SEC chairman Arthur Levitt, who in a 1998 speech had fretted that “managing may be giving way to manipulation, integrity may be losing out to illusion.” Boe said as much in his E-mail application to the SEC, stating that he had “experienced first-handed [sic] financial improprieties about which Mr. Levitt has so eloquently spoken.”
Boe’s background and avowed passion for probity caught the agency’s eye. He was invited to Washington, D.C., for interviews, and the job was his, he recalls–pending a reference check. “My father had been a civil servant,” Boe told CFO. “I really wanted to work for the SEC. I was willing to take a $30,000 cut in pay to do it.”
But a week later, the job offer was rescinded. Although Boe was given two positive recommendations, Richard Wallman, then AlliedSignal’s CFO, allegedly told the SEC’s Regina Barrett that Boe’s work was “inconsistent.” According to Barrett, Wallman said he ought to consult his lawyer and declined to comment further on Boe, saying, “What does that tell you?”
Stunned as Boe was by the SEC’s reversal, he shouldn’t have been surprised that the agency got conflicting reports about him. In June 1998, he’d been fired as a division controller at AlliedSignal after a company psychiatrist sounded alarms about erratic behavior that had recently been diagnosed as bipolar disorder– manic depression. And shortly before applying for the SEC job, in April 1999, Boe had filed a lawsuit against AlliedSignal, alleging wrongful discharge. The real reason he was fired, he claimed, was that he was a whistleblower. According to Boe, AlliedSignal repeatedly used improper accounting practices to meet Wall Street’s earnings expectations and trigger executive bonuses.
“Corporations that do what AlliedSignal did, which is make one favorable accounting adjustment after another to juice income, must be stopped,” Boe asserts now. “There was a saying around AlliedSignal that some of our best engineers are accountants.” A trial on Boe’s lawsuit, which also accuses the company of violating the Americans with Disabilities Act (ADA) and interfering with his effort to work at the SEC, is scheduled to begin on February 27 in U.S. District Court in Kansas City, Kansas.
No one at AlliedSignal, which had sales of $15 billion when it merged with Honeywell Inc. in December 1999 and became Honeywell International Inc., would discuss the company’s defense. “It would be inappropriate for us to comment, given that we are heading to trial in this case,” says in-house counsel Patrick McGovern.