Racketeering Charged in 4th Northrop Holder Suit

A Northrop shareholder filed suit in U.S. District Court against the company, its officers and directors Monday, alleging that they have committed violations of the Racketeer Influenced and Corrupt Organizations Act, the Foreign Corrupt Practices Act, as well as other federal statutes.

The suit is the fourth by shareholders against the firm but the first to be filed in federal court. The shareholder, Gary Goldberg, is a plaintiff in one of the state suits, according to his attorney, Richard D. Greenfield of Los Angeles.

The suit asks the court to dismiss the board and appoint a trustee to supervise Northrop’s business. It also asks for unspecified monetary damages to be paid to Northrop by 38 of its officers and directors.

A Northrop spokesman said the company had not yet seen the suit and could not comment on it. The company has played down the other lawsuits, in one case saying it “appears largely to be a recitation of newspaper articles on various assertions that already are under investigation by Northrop or the government with Northrop’s cooperation.”

The suit alleges violations of the federal racketeering laws on the basis that Northrop has made false submissions to the Securities and Exchange Commission, Greenfield said.

The complaint raises a number of issues involving the Los Angeles-based aerospace firm that have come to public light over the past two years, including production problems with the MX missile, questionable payments into a Korean hotel and the unsuccessful $1.2-billion effort to sell the F-20 fighter.

In each case, the suit alleges that Northrop officers and directors acted illegally or incompetently.