3 Are First to Plead Guilty in Pentagon Fraud : Marine Aide Took Bribes; Unisys Executives Made Illegal Contributions

In a major development in the Pentagon fraud investigation, a Marine Corps civilian supervisor pleaded guilty Friday to taking $43,500 in bribes and two Unisys Corp. representatives admitted funneling illegal campaign contributions to five members of Congress.

With his guilty plea, former Marine procurement officer Jack Sherman became the first Defense Department employee to be convicted in the investigation, which began in September, 1986.

The guilty pleas by a former Unisys executive and by a former consultant to the firm provided the first official revelation in the scandal of tainted money going to benefit elected officeholders. Sources close to the investigation said, however, that they had uncovered no evidence that the lawmakers who received the $6,000 in campaign contributions knew their source or that they were illegal.

Spokesmen for the members of Congress strongly denied any wrongdoing. Those whose campaigns received the illegal donations, according to court records, were Sen. Jim Sasser (D-Tenn.), Rep. Roy Dyson (D-Md.), former Rep. Bill Chappell (D-Fla.), Rep. William Dickinson (R-Ala.) and Rep. Richard Ray (D-Ga.).

All the members of Congress serve on committees with authority over military procurement or defense issues.

Strong Indications

In entering their pleas, the three defendants pledged to cooperate with the government’s accelerating probe and to allow their statements to be assessed through polygraph examinations.

The Unisys executive and consultant admitted in court documents that in making the contributions they were carrying out orders from their superiors, including former Unisys Vice President Charles F. Gardner, a target of the probe called “Operation Ill Wind.”

Court documents released in connection with the guilty pleas contained strong indications that further indictments are likely to follow.

A prosecution summary approved by Sherman indicated that at least one defense firm and two consultants, none of whom were named, had participated in the bribery conspiracy with him.

The statement accepted by the Unisys employees, former executive Robert D. Barrett and former consultant Joseph E. Hill, alleged that in orchestrating the illegal contributions they had conspired with former Unisys officials Gardner and his deputy, Dennis Mitchell.

Attorneys for Gardner and Mitchell have denied wrongdoing on the part of their clients.

Barrett, a former Unisys executive, and Hill, a former consultant to the company, admitted that they had engaged in complicated schemes to disguise the source of Unisys funds they donated to the political campaigns of the five members of Congress.

Federal law bars corporate contributions to federal candidates and making contributions in the name of someone else.

Earlier reports of Chappell’s close ties with the defense industry officials are credited with contributing to his narrow electoral defeat last November.

Admitted Leaking Data

Chappell’s office could not be reached for comment. Spokesmen for the members of Congress said the members did not know the true source of the contribution, and said the money would be returned.

In his plea, Marine official Sherman, who was transferred to new duties pending the outcome of the investigation, admitted leaking inside information and influencing a contract award in return for the illegal payments from two defense industry consultants.

He pleaded guilty to one count of conspiracy to commit bribery and one count of receipt of a bribe. The maximum penalty is 20 years and a $500,000 fine.

Sherman also agreed to repay $43,500 he had received in bribes from one of the consultants, who had been working as a confidential government informant.

According to the court documents, the informant and the other unnamed consultant made the payments to Sherman on behalf of an unnamed defense firm, which had authorized the bribes in a bid to win a $6-million Marine Corps contract.

Through 1987 and early 1988, Sherman, in exchange for payments, repeatedly passed competitors’ confidential bid information to consultants working for rival defense firms, prosecutors said. In April 1987, they said, Sherman leaked to an unnamed consultant data related to an upcoming award for a $100-million contract.

In the Unisys matter, Barrett pleaded guilty to conspiring to defraud the United States and aiding and abetting the making of false statements. The charge stemmed from $2,000 in illegal contributions made to Chappell’s 1986 House campaign.

Barrett, 55, faces up to 10 years in prison and $500,000 in fines for his conviction.

In lining up contributions for Chappell’s campaign, Barrett was carrying out instructions given to him in December, 1986, by Unisys executive Gardner, according to court documents.

In his plea, Hill, a 76-year-old Mineola, N.Y., consultant, who has worked for Unisys and its corporate predecessor since 1977, admitted giving $4,000 in Unisys funds to the political campaign committees of Sasser, Dyson, Dickinson and Ray.

Prosecutors said in a “statement of facts” filed with the court that Hill had made over $25,000 in such contributions to various political committees at the direction of Mitchell, a Unisys employee, from 1982 to 1988.

Staff writer Carla Lazzareschi contributed to this article from Los Angeles.