SEATTLE — Boeing Co. said on Tuesday it plans to add extra staff and hire “a few hundred” temporary employees at an airport in Washington state where it is storing many grounded 737 MAX jetliners, a key step in its best-case plan for resuming deliveries to airline customers in October.

The world’s largest planemaker, burning cash as one of the worst crises in its history stretches into a sixth month, said the workers will assist with aircraft maintenance and customer delivery preparations at Grant County International Airport.

The hiring plans are the first publicly detailed steps Boeing will take as it works to deliver hundreds of grounded 737 MAX jets to airlines globally, an undertaking that would amount to one of the biggest logistical operations in modern civil aviation.

Chicago-based Boeing has been unable to deliver any 737 MAX aircraft since the single-aisle plane was grounded worldwide in March after two fatal crashes in Indonesia and Ethiopia killed 346 people, cutting off a key source of cash and hitting margins.

Global airlines have had to cancel thousands of flights and use spare aircraft to cover routes that were previously flown with the fuel-efficient MAX, eating into their profitability. Many carriers have taken the MAX off their schedules late into the fall or early 2020.

Boeing reiterated on Tuesday that it was working toward getting the 737 MAX flying again commercially in the “early fourth quarter” after it wins approval of reprogrammed software for the stall-prevention system at the center of both crashes.

In late July, US Federal Aviation Administration Deputy Administrator Dan Elwell declined to be pinned down on Boeing’s previously stated target of October for entry into service.

“We don’t have a timeline,” Elwell said. “We have one criteria. When the 737 MAX has been — when the complications to it have been satisfactorily assessed, and the MAX is safe to return to service, that’s the only criteria.”

Boeing said it plans to move all the aircraft from Moses Lake, an eastern Washington location where it runs test flights, to facilities in the Seattle and Everett areas where its factories are located.

Hundreds of Boeing 737 MAX jets remain grounded worldwide, and Boeing has continued building the jets at a rate of 42 per month in the Seattle area. The US planemaker is also storing freshly built aircraft outside its factories in Renton and Everett, around Seattle. It also has jets parked at a facility in San Antonio, Texas.

The total cost so far of the 737 MAX crisis is more than $8 billion, mainly due to compensation the planemaker will have to pay airlines for the delayed deliveries and lower production. — Reuters

SAO PAUL — Health care giant Philips was warned of suspicious sales of its medical equipment to the Brazilian government, and failed to halt them, nearly a decade before an alleged bribery racket was exposed in the company’s Brazil operations last year, Reuters has learned.

Claims of malfeasance reached the highest levels of the Dutch conglomerate as early as 2010, according to court records filed by federal prosecutors, internal company documents and Reuters interviews with a former manager at a Philips subsidiary in Brazil who says he told superiors of the suspected scheme and was later sacked.

That ex-employee, Jose Israel Masiero Filho, a former supply-chain executive with Dixtal Biomedica Industria e Comercio Ltda., spoke extensively with Reuters in his first interview with foreign media. He said in January 2010 he spotted irregularities in three deals to sell Philips and Dixtal equipment to an obscure Brazilian middleman who had landed big contracts with Brazil’s Ministry of Health. Masiero said he suspected payoffs had been used to secure that government business, allegations now at the heart of a burgeoning graft probe in Brazil, court records show.

Masiero emailed an internal Philips hotline immediately to report his suspicions, met soon after with the company’s top compliance officer, and alerted at least three other senior executives during 2010. Among them was Steve Rusckowski, former chief executive of Philips Healthcare, the company’s largest division. Masiero’s warnings were detailed in emails, internal company memos and court records viewed by Reuters.

“Philips should consider that by approving and accepting these sales, it will be involved in illegal activities if discovered,” Masiero wrote to Rusckowski in an email dated October 14, 2010.

Still, Koninklijke Philips, as the company is formally known, continued to sell to the Brazilian intermediary to fulfill the Health Ministry contracts, invoices show.

Rusckowski, who served as Philips Healthcare’s chief executive until April 2012, did not respond to requests for comment. He is now CEO of New Jersey-based Quest Diagnostics.

In an emailed statement to Reuters, Philips said it is cooperating with Brazilian authorities investigating the nation’s medical device industry. The company said it launched an internal investigation in 2010 in response to an “anonymous complaint” but “did not identify direct evidence of wrongdoing.” The company said it did, however, tighten up its internal control processes in Brazil.

Philips would not discuss ex-employee Masiero or the circumstances surrounding his dismissal.

Brazil’s Health Ministry did not respond to requests for comment.

HEALTH CARE IN THE CROSSHAIRS
Philips is now among the targets in a widening investigation into medical contracting graft in Brazil that authorities say is still in its early stages, and which has sparked additional probes by US law enforcement.

Masiero is cooperating with Brazilian prosecutors. They allege Philips and other multinationals conspired with intermediaries to pay bribes for public contracts, charging Brazil’s state health care system inflated prices to recoup the cost of the kickbacks. Twenty four people were charged last year in connection with the alleged scheme. All are currently on trial in Rio de Janeiro.

Germany’s Siemens AG and the American firms Johnson & Johnson, General Electric Co and Stryker Corp), all major manufacturers of medical devices, have been swept up in the probe.

Johnson & Johnson, Siemens and GE declined to comment. They previously denied wrongdoing and said they were cooperating with the investigation. Stryker said it was committed to working in an ethical manner and that it was unable to comment further.

In the United States, the FBI, Department of Justice and the Securities and Exchange Commission have launched their own investigations into suspected corruption in sales of medical equipment in Brazil as well as China, according to people with knowledge of the matter.

The whistle-blower Masiero said he is cooperating with all those agencies, an assertion confirmed in emails viewed by Reuters. The Justice Department, SEC and FBI all declined to comment.

Philips told Reuters it is “reviewing” inquiries from the Justice Department and SEC in connection with the Brazil probe.

MYSTERIOUS MIDDLEMAN
Now 52, Masiero was hired in 2006 to be Dixtal’s exports manager, rising to become the top logistics and supply chain executive for the Sao Paulo-based medical device firm in early 2009. Philips purchased Dixtal in 2008.

In early 2010, Masiero noticed what he considered irregularities with three large contracts awarded by Brazil’s Health Ministry. The deals, one for 750 Philips heart defibrillators, the others for a total of 3,972 Dixtal vital-signs monitors, were worth a combined 68.9 million reis (about $40 million at the time), government records show.

Masiero said he found it odd that Philips did not compete directly for such a major piece of business. Neither Philips or Dixtal submitted bids, according to government records of tender competitors viewed by Reuters.

Instead the contracts were won by Rizzi Comercio e Representacoes Ltda., a little-known Brazilian medical supply firm. Masiero, tasked with getting the equipment to Rizzi Comercio, was surprised to find its billing address was a tiny storefront with peeling purple paint in a dilapidated Sao Paulo neighborhood.

“It was an immediate red flag for me,” Masiero told Reuters.

In addition, the Health Ministry was paying well above market prices for the equipment, Masiero said, unusual for a large customer with buying clout. On February 12, 2010, for example, Masiero allegedly received an email from a Philips’ sales executive, Frederik Knudsen, directing him to deliver the first shipment of 60 defibrillators to Rizzi Comercio, which marked up those devices an additional 67%, according to correspondence included in court records.

“The value that should be on the order is what was agreed to with the Health Ministry” — $16,700 per unit — “and not what we sold them to Rizzi for ($9,991),” according to the email allegedly from Knudsen, which was seen by Reuters.

Prosecutors say Philips and Rizzi Comercio conspired to disguise and recoup the cost of bribes through inflated prices, fleecing Brazilian taxpayers in the process.

Knudsen, whom Philips confirmed still works for them, is now among those on trial in Rio. So is Daurio Speranzini, who led Philips Healthcare’s operations in Latin America for seven years before joining GE in 2011. He left that firm last December. Both men were charged last August with racketeering and fraud.

Knudsen’s lawyers did not respond to requests for comment. In a written defense filed with the court, they said Knudsen did not set Philips’ prices and that he is innocent. In a separate court filing, they also questioned the veracity of the emails their client allegedly sent to Masiero.

Speranzini’s lawyers referred questions to their written defense, which contends he had no knowledge of the alleged bribery scheme or of Masiero’s warnings.

Also on trial for racketeering and fraud are two brothers who own Rizzi Comercio, Wlademir and Adalberto Rizzi.

Their lawyer, who did not respond to requests for comment, said in court filings that her clients engaged in no illegal activities.

SOUNDING THE ALARM
Uneasy about the deals with Rizzi Comercio, Masiero on January 20, 2010, notified Philips’ global compliance team in Amsterdam through an email hotline.

Philips sent Caroline Visser, then-chief of Philips’ global compliance, to Brazil to meet with Masiero in March 2010. She promised a swift investigation, according to emails the pair exchanged.

Two months later, Masiero was transferred from Dixtal to a logistics post within Philips in Sao Paulo, a move he considered a demotion and an effort to silence him. The shipments continued, invoices show.

Frustrated, Masiero on October 14, 2010, sent an email to Rusckowski, the head of Philips’ health care division. — Reuters