U.S. prosecutors probe ex-NASA official, Boeing over space contract: sources

WASHINGTON/SEATTLE (Reuters) - The U.S. Justice Department has opened a criminal probe into whether NASA's former head of human spaceflight gave Boeing Co BA.N improper guidance during a lucrative lunar-lander contract competition, two people familiar with the matter said on Friday.

FILE PHOTO: The Department of Justice (DOJ) logo is pictured on a wall in New York December 5, 2013. REUTERS/Carlo Allegri

The Justice Department has sent subpoenas to NASA, Boeing and Doug Loverro, who led the agency’s marquee space travel program until he resigned abruptly in May, as part of a grand-jury investigation into the possible violation of federal procurement laws, the sources said.

In the probe, opened in June, prosecutors are focusing on communication between Loverro and Boeing space executive Jim Chilton in late January, during a blackout period for the Human Landing System competition, one of the sources said.

Representatives for Boeing and Loverro declined to comment. NASA declined to comment on personnel matters and the status of any investigation, but said the agency was confident in its procurement processes.

The probe was earlier reported by the Wall Street Journal.

The investigation, and an earlier probe by a NASA watchdog, has cast a shadow over one of NASA’s most ambitious endeavors: sending humans back to the moon from U.S. soil for the first time in nearly half a century.

In April, NASA bypassed Boeing - an industry juggernaut with deep ties to space travel - and awarded contracts worth a combined $1 billion to Elon Musk's SpaceX, Inc AMZN.O founder Jeff Bezos' Blue Origin, and Leidos Inc affiliate Dynetics to build lunar landing vehicles that can carry astronauts to the moon by 2024.

Boeing was removed from the competition, NASA said in April, without explaining why.

Two people briefed on a NASA watchdog investigation told Reuters Boeing’s removal was over its contact with Loverro.

The sources said NASA’s Office of Inspector General found that Loverro told Boeing during a blackout period the company’s proposal was incomplete and discussed aspects of the bid that were missing.

After discussions with Loverro, Boeing officials submitted another version during the blackout period, raising legal concerns among agency procurement staff, one of the people said.

Loverro abruptly resigned in May after less than a year on the job, telling employees in an email seen by Reuters that he took certain “risks” to meet NASA’s 2024 moon deadline.

“It is clear that I made a mistake in that choice for which I alone must bear the consequences,” Loverro said, without explaining the mistake he was referring to.

Reporting by Joey Roulette in Washington and Eric M. Johnson in Seattle; Editing by Aurora Ellis