Defense Probe Figure Likely to Plead Guilty

Times Staff Writers

Woodland Hills, Calif., defense consultant Fred H. Lackner will plead guilty Friday to federal fraud and bribery charges in the Ill Wind Pentagon corruption investigation, sources told The Times Wednesday.

In an agreement almost identical to that struck last week between prosecutors and former Navy procurement official Stuart E. Berlin, Lackner will plead guilty in U.S. District Court in Alexandria, Va., to charges of wire fraud, conspiracy and bribery of a public official.

He faces a maximum penalty of 25 years in prison and fines of $750,000.

Lackner, 52, will admit his role in a scheme to pay Berlin about $6,000 for inside information on two Navy electronics contracts, the sources said. Lackner and an associate, defense consultant William L. Parkin, sold the data to Teledyne Industries Inc., of Newbury Park, Calif., and Hazeltine Corp. of Long Island, N.Y., to help the firms win lucrative Navy business.


With his plea, Lackner would become the 12th person to admit to charges arising from the Ill Wind inquiry. Teledyne and Hazeltine also have pleaded guilty to charges of conspiracy, fraud and lying to the government.

Three Teledyne officials face trial, beginning Monday, on charges of using Parkin and Lackner to bribe the Navy official for inside information.

The three-year investigation into corruption in military weapons-buying broke open last June when agents of the Naval Investigative Service and the FBI searched the homes and offices of four dozen defense contractors, consultants and government officials. The inquiry has been described as the broadest ever into fraud and bribery in the Pentagon’s $150-billion-a-year procurement system.

More Charges Likely


Federal prosecutors, under the direction of Henry E. Hudson, U.S. Attorney for the Eastern District of Virginia, are continuing to build cases against a number of defense consultants and Pentagon officials who have not been indicted.

Their chief target is said to be former Assistant Navy Secretary Melvyn R. Paisley, who left the Navy in 1987 to become a highly paid consultant. Investigators are pursuing allegations that Paisley bribed his former Navy colleagues to steer contracts to some of the nation’s biggest defense contractors.

Another target is former defense consultant William M. Galvin, a Paisley associate and a well-known figure in the defense industry. Attorneys for Paisley and Galvin have asserted that their clients are innocent of any wrongdoing.

Sources said Wednesday that Lackner decided to plead guilty and cooperate with prosecutors after Berlin, 51, and Parkin, 65, confessed to their roles in the conspiracy. Parkin, who attempted suicide two weeks ago, pleaded guilty to bribery and fraud charges last Monday.

The two men are scheduled to be sentenced June 3.

The prosecutor’s case was built largely around wiretapped conversations between Lackner and Parkin in which the two made veiled references to money for Berlin as “a little green” and “a lot of spaghetti and meatballs.”

FBI surveillance cameras also recorded Lackner’s withdrawing money from a bank and later meeting with Berlin, federal investigative sources said. But the actual transfer of funds was never witnessed, they said.

Berlin admitted last week that, beginning in 1985, he sold confidential information on a Navy electronics contract to Lackner and Parkin, who in turn sold it to officers of a Teledyne subsidiary for $160,000.


Documents Show Deceit

Parkin and Lackner agreed to split the Teledyne fee and pay a one-third share to Berlin. But, according to government documents, they lied to Berlin about how much they were paid and gave him only a tiny fraction of their fees.

Teledyne, in the plea agreement under which it will pay the government at least $4.3 million in fines and reimbursements, called the plan a “corrupt and illegal arrangement” to subvert the Pentagon’s procurement process.

Prosecutors said that Lackner, Parkin and Berlin were involved in a similar scheme to help Hazeltine win a different Navy electronics contract. Lackner and Parkin again allegedly misrepresented the size of their fee and gave Berlin less than a one-third share.

Carla Lazzareschi reported from Los Angeles and John M. Broder from Washington.