U.S. Seizes Data on MX Program From Northrop Division

Federal agents searched Northrop Corp.’s electronics division in Hawthorne last week, seizing documents reportedly connected to the government’s continuing investigation of the company’s work on a key part of the Air Force’s MX missile.

The search, conducted by agents from the Federal Bureau of Investigation and the Defense Criminal Investigative Service, provides further evidence that the federal government is pursuing potential criminal activities in connection with the missile’s problems.

Northrop officials confirmed the search Monday. They said the investigators had taken “contractual documents between Northrop and the Air Force” involving the company’s production of the principal component of the missile’s sophisticated electronic guidance system.

Other sources described the seized documents as a “recent internal audit report detailing purchasing problems” and reports of field testing and failure rates of the MX missile component. The guidance system component, known as the inertial measurement unit, or IMU, has been under federal scrutiny for more than a year. Investigators have looked into evidence and allegations that Northrop overcharged the Air Force for the units, manufactured faulty units and failed to deliver them on schedule.

Northrop has already been charged by the federal government with $3 million in civil fraud, and sources have said that a federal grand jury was convened months ago to look into possible criminal fraud. Other civil suits are pending.

Officials from the FBI and the U.S. Attorney’s office in Los Angeles declined to discuss the case. A Northrop spokesman said he was unaware of any criminal investigation.

Last week’s search at Northrop comes about one month after investigators from the FBI and Defense Criminal Investigative Service searched the Cerritos home of former Northrop employee Bryan Hyatt, looking for MX-related documents.

Hyatt was among a small group of workers who brought evidence of fraud and other improprieties to the government’s attention several years ago. Although he originally cooperated with the government, Hyatt has since had a falling out with investigators. He said investigators were looking for documents “relating to a purchasing fraud with the MX and any cover-up.”

Hyatt said he believed that the Northrop search could have been triggered by documents taken from his home.

When Northrop won the contract to build the MX guidance system in 1975, it represented a major deal for the company. But within years of getting the award, the company was plagued with problems.

At the heart of the guidance system is the IMU, a 19,401-part device the size of a basketball that is considered among the world’s most complex Military components.

By 1985, Air Force reviews of Northrop’s production were increasingly critical and the company was far behind schedule. Later, whistle-blowing employees brought allegations that the company knowingly used defective parts in the device.

Meanwhile, the Air Force has withheld progress payments on the devices until Northrop improves its operations. However, Northrop officials said Monday that the amount it is owed by the government has declined from a peak of $145 million in December, 1987, to about $38 million.

The MX, officially called the Peacekeeper, is the nation’s most sophisticated nuclear missile and is being deployed in silos scattered across the country.