Navy Official, Firm, Lobbyists May Be Charged

Federal prosecutors will ask a federal grand jury today to indict one Southern California defense contractor, a Navy official and two Pentagon lobbyists, sources told The Times, in what would be the first criminal charges to surface in connection with the massive Pentagon procurement scandal that rocked the defense establishment last year.

The federal grand jury in Virginia is being asked to return charges of conspiracy, fraud and bribery against a division of Los Angeles-based Teledyne Co. and three of its management employees, law enforcement officials said. Teledyne officials refused to comment.

Others May Be Charged

In addition, prosecutors are said to be seeking similar charges against Stuart Berlin, a Navy procurement official, and defense consultants William L. Parkin of Alexandria, Va., and Fred H. Lackner of Woodland Hills for allegedly buying and selling confidential Pentagon procurement information on behalf of Teledyne Electronics in Newbury Park and Hazeltine Corp., a unit of Emerson Electric Co. in St. Louis.

Parkin’s attorney, Gerald F. Treanor confirmed Thursday that he expects his client to be indicted today. Berlin’s attorney could not be reached. And Lackner’s attorney, who refused a plea bargain offer from the government last summer, maintained the innocence of his client.

The matters said to be before the grand jury today cover only a handful of the dozens of Pentagon employees, consultants and contractors whose names have surfaced in the seven months since the U.S. Justice Department revealed its sweeping Operation Ill Wind investigation.

No Prominent Figures

But investigators insisted privately on Thursday that the expected indictments--which do not include several of the more prominent figures in the scandal--are just the first of many charges they expect to file in the coming year.

U.S. Atty. Henry Hudson declined to comment on what is before the grand jury. However, a spokesman noted: “The grand jury will wind up its work tomorrow.”

Sources said Hazeltine Corp. and two of its current and former employees has reached a plea bargain agreement with prosecutors and would not be named in the indictments.

No Comment From Company

A spokesman for Hazeltine declined to comment on reports of a plea agreement. “The company continues to have no comment on that case,” said the spokesman, Jim Orso.

Hudson, who directed the far-reaching, two-year investigation involving the Federal Bureau of Investigation and Naval Investigative Service (NIS), is scheduled to make a formal announcement of the grand jury’s action at a press conference today.

The investigation broke into the open in mid-June, when FBI agents served search warrants on more than 40 government officials, private consultants and military suppliers. The two-year investigation has been described as the broadest inquiry ever into fraud and bribery in the nation’s $150-billion-a-year weapons-buying system.

Sees Deliberate Strategy

The first round of charges deliberately does not include any of the highest ranking current or former officials suspected of involvement in the case, including former Assistant Navy Secretary Melvyn R. Paisley, a source close to the investigation said.

“They’re trying to put the squeeze on the smaller players to get them to play, to get them to help us land the bigger players,” he said.

In addition to Teledyne, the grand jury will be asked to consider charges against three of its employees, sources said. They are George Kaub, vice president of contracts at the electronics unit; Dale Schnittjer, vice president of finance at the same unit, and Eugene Sullivan, the former comptroller of the unit and now the assistant controller of Teledyne Ryan Electronics in San Diego.

Employees Decline Comment

According to an affidavit made public this week, all three knew the company was getting confidential Pentagon information through Parkin. All three employees declined to comment and referred calls to the company’s public spokesman. The spokesman also declined comment.

The first cases being taken to the grand jury for indictment shows how Hudson and his prosecutors have decided to fashion a case from the massive amount of detailed information gathered during the investigation, sources said.

Instead of gathering evidence of all the illegal acts of an individual, a team of 70 NIS and FBI agents and 15 attorneys are reconstructing the means by which military hardware contracts were won. Future charges would come in clusters as prosecutors piece together the roles of Pentagon officials, consultants and defense contractors in alleged schemes to pay or accept bribes, rig bids and trade in confidential information, a source explained.

Focus on Two Contracts

The proposed indictment being taken to the grand jury today focuses on two contracts for military aircraft testing equipment, sources said.

According to a variety of federal documents, Parkin was retained as a consultant by Teledyne Electronics to win one contract and by Hazeltine to win the other. In both cases, documents from the investigation show, Parkin turned to Lackner for help in gathering confidential Pentagon procurement information and strategy of use to both Hazeltine and Teledyne.

Lackner reportedly received more than $20,000 from Parkin for information that he allegedly got from his long-time friend, Berlin.

And according to affidavits made public this week, Lackner and Parkin pooled some of their fees and paid Berlin for his assistance. Lackner and Parkin have been friends for about 10 years; Lackner’s friendship with Navy official Berlin is said to date back at least 20 years.

Denies Wrongdoing

William Dougherty, Lackner’s attorney, has denied any wrongdoing on the part of his client. “Mr. Lackner never gave a penny to Mr. Berlin,” he said. “And he didn’t get any information he shouldn’t have.”

In the case of Teledyne, the alleged efforts of Parkin and Lackner apparently were successful. In 1987 the Air Force negotiated a $24-million contract to buy hand-held devices that test electronic equipment in military planes. Court records made public this week show that wire-tapped conversations involving Berlin, Parkin and Lackner indicate Berlin was able to steer the contract to Teledyne and away from its only competitor, Tel Electronics of New Jersey.

Sparks Competition

The second contract for $150 million, for a similar device for Navy aircraft, sparked a competition between finalists Gould Inc. of Rolling Meadows, Ill., and Hazeltine Corp., of Greenlawn, N.Y. According to court documents, Parkin was retained by Hazeltine to help it get the contract. Parkin agreed to split evenly his $24,000 annual fee from the company with Lackner in exchange for “marketing intelligence” that Lackner is, again, believed to have gotten from Berlin. The final contract for the device has not yet been awarded.

Staff writers Douglas Jehl and John M. Broder in Washington contributed to this article.