Eight Defense Firms Under Scrutiny

The Pentagon is considering possible criminal prosecution against eight, or possibly nine, of the nation’s biggest defense firms for allegedly trafficking in classified Defense Department documents, a Pentagon official said today.

John Donnelly, director of the Pentagon’s Defense Investigative Service, said that eight firms were involved in “systemic, company-approved” efforts to obtain classified information to help compete for lucrative defense contracts.

He identified the eight as Boeing, McDonnell Douglas, Northrop, TRW, General Dynamics, Martin Marietta, Litton Systems, a unit of Litton Industries, and Sanders Associates, a unit of Lockheed

“These companies, there are eight as we understand it, are under investigation by (the Defense Criminal Investigative Service) for possible criminal prosecution,” Donnelly told a congressional panel.

The investigations are separate from Operation Ill Wind, the wide-ranging probe of alleged fraud and bribery that was made public last June.

Later, Donnelly said the Pentagon had sent the Justice Department a case involving alleged trafficking in illegal documents by employees of Rockwell International.

He said that case involved an Army officer who allegedly gave a document to a Rockwell employee in the hope of getting a job. “This case is scheduled to go to trial,” Donnelly told the Joint Economic Committee’s subcommittee on national security economics.

Donnelly also said his office had sent seven other cases to the Defense Investigative Service for possible criminal prosecution. Rockwell, however, was not on the list of eight companies that Donnelly originally said were under investigation.

Donnelly was unable or unwilling to immediately explain the discrepancy and later told reporters that he had made a “misstatement” by identifying Rockwell. But John Faulkner, an aide to Donnelly, separately told Reuters that the case referred to the FBI did involve Rockwell.