NORTHROP’S PROBLEMS : U.S. Adds to Northrop Indictment : Alleges Firm Supplied 200, Not 17, Faulty Guidance Units
The Department of Justice amended its criminal indictment against Northrop and two top executives Tuesday, adding 22 counts to allegations that the firm improperly tested and sold defective guidance systems for nuclear-armed cruise missiles.
Northrop and two officials were charged with conspiracy and fraud in a 167-count indictment returned by a federal grand jury in April. In addition to cruise missiles, the indictment accused the firm of supplying defective equipment for AV-8B Harrier jets, used by the Marine Corps.
Assistant U.S. Atty. William Fahey said Tuesday that the new indictment contains significant allegations that Northrop supplied more defective guidance units than originally thought.
The indictment alleges that Northrop sold 200 defective guidance units, called flight data transmitters, and produced at the firm’s Western Services Department in Pomona. The original indictment alleged the firm had shipped only 17 defective units.
A Northrop spokesman said the allegations against the firm and two of its executives are unwarranted and that the firm “strongly disputes any allegation of criminal behavior.”
The Northrop executives under indictment are Joseph Yamron, a corporate vice president and the general manager of the firm’s precision products division in Newton, Mass., and Vice President Leopold Engler of the same division. Yamron and Engler are on leave from Northrop.
Freezing Problem
On Monday, the Justice Department filed a related motion in the case in which it put on file a report that Engler wrote to Yamron in August, 1983, that indicated fluids used in Northrop gyroscopes did not meet contractual specifications.
The Justice Department has alleged that Northrop continued to use the fluid for several years after the report was written, even though it knew that the fluid would not meet a requirement that it not freeze at 65 degrees below zero.
The Engler report concludes that the fluid “does not meet the -65 F requirement and never did.”
In addition to the criminal indictment, the Justice Department has filed two civil suits against Northrop, one alleging fraud in the same cruise missile parts involved in the criminal charges and the other involving MX missile system parts.
The civil suit involving the cruise missile parts alleges that Northrop failed to properly test the equipment. Cantafio said that the Justice Department had “quietly” amended its civil law suit against Northrop on the cruise missile.
The changes apparently withdraw allegations that the guidance systems are defective. (The allegations in the civil and criminal cases are not identical.)
The Justice Department “quietly removed the doubt about the flight data transmitters’ reliability in the field,” Cantafio said. He said the equipment has not failed in 96 flight tests of the missile.
The amended civil complaint seeks damages for only testing and inspection of the guidance systems, rather than the full price of the equipment as originally requested, he noted.
