Lockheed Pursuing Titan Despite Scandal

Lockheed Martin Corp., which has agreed to buy defense contractor Titan Corp., said Monday that Titan employees’ possible links to prisoner abuse in Iraq “were not significant to our strategic decision” to buy the San Diego firm.

Titan, which provides translators and interpreters to the Army in Iraq, was named in an internal Army report about abuse at Abu Ghraib prison. The report had raised fears of analysts and investors that the deal could fall apart, but Lockheed Chief Financial Officer Christopher Kubasik said the issues were not hurting Titan’s chances of being bought.

Kubasik made his comments at the Credit Suisse First Boston/Aviation Week aerospace defense conference in New York.

Lockheed spokesman Thomas Jurkowsky concurred. “At the moment, we do not see these as systemic issues,” he said. “Until all the facts are known, it’s premature to draw conclusions about what did or did not happen with respect to one or two Titan employees.”

Titan has followed through with all commitments relating to investigations and its possible purchase by Lockheed, Jurkowsky said.

Titan has said it would cooperate with government investigations and that it had not yet seen evidence of unethical or illegal behavior on the part of its employees.

Titan also is being probed by the Securities and Exchange Commission and the Justice Department relating to possible bribery of foreign officials by Titan consultants or subsidiaries.

Bethesda, Md.-based Lockheed, the No. 1 U.S. defense contractor, said in September that it planned to buy Titan.

The deal has not yet closed and in April the companies amended a merger agreement as a result of the bribe allegations.

Lockheed shares were down 58 cents to $46.85, while Titan shares were down 27 cents to $18.81. Both trade on the New York Stock Exchange.