Rockwell-Overbilling Case Trial Opens : Firm Trying to Make Defendant ‘Scapegoat,’ His Lawyer Charges
A former Rockwell International satellite division manager accused of overbilling the government has been made a “scapegoat” in the aerospace giant’s own wrongdoing, a defense attorney argued Tuesday.
On the opening day of Donald H. Carter’s trial, his lawyer, Robert Perry, told federal court jurors that Carter did nothing wrong and was simply caught up in a complex series of manipulations engineered by his bosses.
“After 26 years of service to Rockwell, Don Carter saw Rockwell turn its back on him, try to make him a scapegoat for a problem Rockwell had,” Perry said. “They demoted him, they suspended him and ultimately they forced him into an early retirement, all for trying to do his job.”
Carter, 59, of Downey, former director of the material division of Rockwell’s satellite-systems division in Seal Beach, is accused of helping fuel a scheme to overcharge the Air Force by $446,000 on a $1.2-billion satellite navigational system.
Carter is charged with six counts of conspiracy, mail fraud and making false statements to the government. Robert Zavodnik of Fountain Valley, who worked under Carter as manager of major subcontracts, pleaded guilty in September and faces sentencing.
Rockwell faces a separate trial in January. Two of its lawyers were in court to watch the trial Tuesday before U.S. District Judge Consuelo Marshall.
Assistant U.S. Atty. George Newhouse told jurors that Rockwell tried to obtain about $446,000 by overcharging the Air Force for components of 28 satellites produced in 1982 and 1983 for the NAVSTAR system, a complex of Earth-orbiting satellites that send navigational signals to ground troops and military and civilian ships and planes.
Newhouse alleged that Carter and other Rockwell executives who have not been charged in the case engineered the plan to recoup unexpected repair costs incurred in a 1978 contract with ITT Corp., which subcontracted to provide key components of NAVSTAR.
The 1978 development contract was structured so that Rockwell would have to absorb 35% of any cost overruns if it exceeded its original bid price, Newhouse said. Worried that it might have to bear a portion of the repair costs, Rockwell instead concealed that amount within its billed costs for the 1983, $1.2-billion contract to build the satellites, the prosecutor charged.
Newhouse said Carter and other executives told U.S. auditors that ITT’s subcontract price was $42.3 million for the 1983 contract, failing to disclose that the price was actually $41.9 million but that another $446,000 had been tacked on to cover repair costs, overhead and other fees from the earlier contract.
