Awaits Sentencing on Defrauding Northrop : Defense Dept. Gave Top-Secret Clearance to Convicted Felon

The Defense Department granted a top-secret security clearance to a high school dropout, who passed as an engineer at Northrop, even though the Pentagon knew that he was a convicted felon and had been arrested 13 times, it was disclosed Friday.

William Albert Reinke, who is awaiting sentencing on two counts of defrauding the government during his employment at Northrop on the stealth bomber program, told Northrop in an employment application that he was attending graduate engineering school at a time when, in fact, he was serving a three-year term at hard labor in a Florida prison, according to papers filed in U.S. District Court here by the U.S. attorney’s office.

Northrop hired Reinke in 1984 immediately after he had been fired at Rockwell International for allegedly inflating travel expense statements. Northrop never learned about the firing or about his prior criminal record, Northrop spokesman Tony Cantafio said.

Breakdown in System

The Defense Investigative Service, the Pentagon agency that is supposed to safeguard the security of industrial sites around the nation, knew about Reinke’s criminal record when it granted him a top-secret clearance. But Dale Hartig, a spokesman for the service, said it did not learn about Reinke’s termination at Rockwell until recently.

“The system did not work the way it was supposed to,” Hartig acknowledged. “An adverse information report was never submitted by Rockwell.”

A Rockwell spokesman said late Friday that the company is trying to determine whether such a report was filed. The Northrop spokesman said that Rockwell was never asked formally about Reinke’s employment history but that “informal” inquiries were made by the engineering department.

The disclosures about Reinke have prompted the House Energy and Commerce subcommittee on oversight and investigations to plan a line of questioning related to the case Monday when it opens hearings on security breaches in the defense industry.

“Members of Congress cannot get access to these programs, but convicted felons can,” Peter Stockton, an investigator for the committee, said. “Not only did he get top-secret clearance, but it was with special access to one of the most sensitive military programs.”

Admitted to Lax Practices

Under Secretary of Defense Donald Hicks and Craig Alderman, a deputy undersecretary, are scheduled to appear before the subcommittee, which is chaired by Rep. John D. Dingell (D-Mich.).

Last month, Lockheed Chairman Lawrence Kitchen admitted in testimony before the subcommittee that Lockheed had been “lax” in its handling of secret documents for a highly classified program, believed to be the F-19 stealth fighter program.

U.S. Atty. Fred Heather said in Los Angeles that the Reinke case is the third criminal case involving Northrop’s stealth bomber project. “These involve three separate fraud-against-the-government cases: a self-dealing case, a price-fixing case and a kickbacks case.

“The tapes in the Brousseau case (Northrop buyer Ronald E. Brousseau pleaded guilty to taking kickbacks in his job on the stealth bomber program in 1985) imply that the shroud of secrecy over the program enabled him to do things he wouldn’t ordinarily be able to do,” Heather added.

Hartig, the Defense Department spokesman, said it is the Pentagon’s policy not to disclose prior criminal records to a contractor when they are uncovered during an investigation. Reinke had lied on his Northrop application, saying that he had no conviction record, but that application was never submitted to the government in the security clearance investigation, Cantafio said.

Reinke’s record includes convictions for auto theft, passing bad checks and defrauding an innkeeper, according the U.S. attorney’s sentencing memorandum.

Hartig said that Reinke was granted a clearance despite his long criminal record because the convictions had occurred at least 22 years before he applied for a security clearance.

He is scheduled to appear Monday in U.S. District Court for sentencing on a recent conviction of fraud.

The indictment alleged that he awarded $600,000 in subcontracts on the stealth bomber program to RF Engineering, which he owned, unbeknown to Northrop.