Navy Kitty Hawk Probe Finds Chaos, Not Fraud

A 3 1/2-month Navy investigation of the aircraft carrier Kitty Hawk paints a gloomy picture of a Navy supply system so complex, so massive and so dependent on outdated computers that Navy crews are unable to account for thousands of weapons, equipment and spare parts, The Times has learned.

According to sources familiar with the Navy investigation, the 12-inch-thick report found no evidence of widespread fraud, waste or mismanagement aboard the Kitty Hawk, but confirms other allegations by former Petty Officer 2nd Class Robert Jackson, the 26-year-old whistle-blower whose charges triggered the extensive probe.

The Navy is expected to release the report at a congressional hearing Tuesday. Navy sources told The Times that investigators found that:

- In a few instances sailors tossed valuable materials overboard rather than fill out paper work required to return the material as surplus supplies. Jackson said he routinely witnessed the dumping of items ranging from desks to radar equipment during his two-year tour of duty on the Kitty Hawk. Navy sources said that investigators are continuing to look into the incidents to determine whether they were improper or done because of space limitations on aircraft carriers.

- Navy funds were taken out of the reserve account of Capt. Phillip R. Wood, the carrier’s commanding officer, to purchase personal items, including flower arrangements and the book “Joy of Marriage.” Wood or any other officers who are found responsible for the improper purchases will be ordered to reimburse the Navy, sources said. Wood is aboard the Kitty Hawk in the northern Arabian Sea and could not be reached for comment.

- An officer in the Kitty Hawk’s supply department falsified the signature of his lieutenant commander on Navy survey forms. The government forms are used to document lost or damaged parts, but Jackson alleged that he was ordered to fill in items and supplies that were missing from storeroom inventories without independently checking. Navy sources said they did not know what, if any, disciplinary action would be taken against the officer, who has reportedly admitted to the forgery. However, the investigation found that the lieutenant commander’s signature was not required on the survey forms.

- Navy auditors still cannot account for $4 million of the $14 million in supplies and parts that earlier could not be located in Kitty Hawk storerooms. The investigation concludes that the bulk of the $10-million inventory was missing because of accounting errors and computer problems, not fraud or theft, Navy sources said.

- Sloppy bookkeeping practices and poor records maintenance resulted in numerous accounting errors throughout Kitty Hawk supply departments. The probe also discovered that the ship’s financial reports for the last two fiscal years were adjusted when enlisted and officer personnel in the Navy supply department tried to reconcile differences in financial statements between the ship’s bookkeeping records and computer reports. One Navy source compared the juggling of the books to a consumer balancing his personal checking account by using the bank statement and not his own records.

House Hearing

The full investigative report is expected to be made public Tuesday at a meeting of the House Armed Services sea power subcommittee. At the hearing, the Navy plans to cite the investigation to support purchase of a new $2-billion computer system to run the supply system, sources said.

Jackson, who was honorably discharged Aug. 30, also is scheduled to testify at the hearing.

“One would have thought as we entered this thing that we would uncover a tremendous amount of fraud, impropriety, waste and mismanagement,” one Navy source said. “The investigation doesn’t do that. What it shows is that the system is very weak or inadequate in handling the tremendous volume of transactions aboard an aircraft carrier. This will go a long way in getting some of those problems rectified, if that’s what the Congress wants.”

According to Navy sources in Washington, the investigation concludes, “Most of (Jackson’s) allegations have been found to be without foundation and to reflect an inadequate understanding of the carrier supply environment and its inherent deficiencies. In pursuit of those allegations, however, investigative officers documented numerous results of the shipboard procurement and supply systems’ inadequacies with which decades of shipboard supply officers have had to cope. . . .”

Contacted Friday, Jackson called the investigation inept.

“I personally feel justice is not being done here,” Jackson said. “The investigation didn’t confirm the most important thing--the key people who initiate the (supply) system do not understand what they are doing. Why does the Navy want to invest multimillions in a computer system when they ought to teach the supply petty officers who work with the system what to do?”

Jackson Criticized

The investigative report was conducted by Adm. Dennis Brooks in San Diego, commander of Carrier Group 7, the Kitty Hawk battle group. The report is being reviewed by high-ranking Navy officers in Washington. The Times received a briefing on the highlights of the report by Navy and congressional sources.

One Navy source said that Navy officials feel “very comfortable” with the investigation. He said that with the exception of the falsified documents, the charges by Jackson that were substantiated in the report were “minor.” The rest of the charges, including allegations that Navy vendors offered kickbacks and bribes to sailors, were unfounded, the investigation concluded.

In a 26-page statement submitted in July to Congress along with 1,500 pages of supporting documents, Jackson charged widespread theft, fraud, kickbacks and bribes aboard the Kitty Hawk.

The investigation portrays Jackson as “bitter” and “vindictive” sailor who wanted “to get” the Navy because he felt he deserved a sizable bonus through its beneficial suggestion program. Jackson was given $200 for developing a training, auditing and reporting program for Kitty Hawk supply petty officers, but felt he should have received considerably more, the report says.

Perhaps the most significant conclusion to emerge from the investigation is the admission by the Navy that its supply system is in chaos.

For example, the report acknowledges that Navy supply computers were not designed to detect penetration by thieves or foreign agents. A Kitty Hawk storekeeper was one of seven people arrested this summer in connection with a smuggling ring that shipped stolen aircraft parts to Iran.

Geared Toward Combat

In addition, the computers aboard aircraft carriers do not effectively communicate with computers at Navy supply account centers on shore, the report says.

Navy sources emphasized that the supply system is geared toward providing maximum readiness for combat, which has been achieved at the expense of accountability.

“The investigation says we have to totally revamp the system to get accountability,” one Navy source said. “If the Congress wants accountability, they’re going to have to pay for it.”

Early estimates by the Navy reveal that a new computerized supply system would cost $2 billion and not be completed until the early 1990s.

Times staff writer Gaylord Shaw in Washington contributed to this story.