Defense Dept. Halts Business With Toshiba

The Pentagon has suspended business with Toshiba Corp. while Japan investigates charges the company sold secret high-tech equipment to the Soviets for building quieter submarines, officials said today.

Efforts to reduce the noise levels of Soviet submarines with precisely machined propellers made by the Japanese were linked to the John Walker family spy ring, said Administration officials, who demanded anonymity. They suggested that the ring may have told Moscow that noisy propellers were the chief reason the U.S. Navy has been able to detect its submarines.

After the Walker ring was exposed two years ago, senior officials said the secrets divulged led to improvements in the operation of Soviet submarines, making them more difficult to detect, but they never mentioned anything about propellers.

Undersea warfare depends for its success on how silently submarines can run beneath the waves.

“There is evidence (that the Soviets are) using the propellers,” one official said. “The Navy is very upset.”

The Pentagon ban on business dealings with Toshiba could cost the Japanese company hundreds of millions of dollars worth of contracts.