McDonnell Probe Goes to Grand Jury
A criminal investigation into accounting irregularities at the McDonnell Douglas Helicopter Co. has gone to a federal grand jury in Los Angeles, according to sworn testimony and declarations made in a Superior Court civil case.
The company, a subsidiary of McDonnell Douglas Corp., and several of its former managers are under scrutiny in connection with a subcontract issued to Parker Hannifin, which produces aerospace hydraulic gear at its Bertea unit in Orange County.
The Defense Department started an investigation into accounting problems at the helicopter company in March, 1984, when Rod Stillwell, a former subcontracting administrator for the company, told federal investigators that he had discovered discrepancies in excess of $1 million on a Parker Hannifin subcontract for the AH-64 Apache attack helicopter.
Stillwell has said in interviews that he attempted to discuss the problem with his supervisors at Hughes Helicopters Inc., which was bought by McDonnell Douglas in 1984, but was told to keep quiet. He said he was eventually forced to resign and filed a wrongful termination suit against the company and several of its managers.
In that civil suit, Stillwell has testified under oath that Robert Keller, an investigator for the Army Criminal Investigation Command, told him that the Army has gathered evidence of mail fraud, forgery and overcharging against McDonnell Douglas and several former McDonnell Douglas managers.
Stillwell has testified that he found two inconsistent memorandums of agreement covering the same subcontract for Apache helicopter parts, differing by more than $1 million.
The existence of the grand jury investigation was disclosed late last year in a declaration filed by an attorney representing one of the defendants in Stillwell’s suit, Edward E. Vukonich, a former McDonnell Douglas manager for subcontracts.
The attorney, Jamoa A. Moberly, said that Assistant U.S. Attorney David Wiechert told her in October, 1986, that “the matter is still before the federal grand jury.”
Moberly was seeking limited immunity for Vukonich but Wiechert told Moberly he would oppose immunity, according to the declaration. Later, according to William R. Ramsey, Stillwell’s attorney, Vukonich invoked the Fifth Amendment in response to 200 questions in a deposition taken in the Stillwell case.
Wiechert and Keller were out of town and could not be reached for comment Tuesday. Moberly is now on maternity leave and other attorneys in her office did not respond to a Times inquiry. Spokesmen for McDonnell and Parker Hannifin said they were not able to comment.
Shortly after McDonnell purchased the helicopter unit, problems started cropping up with its accounting system. The issue eventually drew national attention when the Army imposed a partial suspension of contract payments in May, 1985. A McDonnell Douglas spokesman could not say whether the payments have been fully restored.
