Pentagon Auditing Voi-Shan, Firm Accused of Phony Tests

The Pentagon has begun a comprehensive audit of Voi-Shan, a Culver City producer of aerospace fasteners that is under federal criminal and civil investigation for incomplete and phony testing of its products.

The audit may be the final leg of the federal probe that started in 1988 when two former Voi-Shan quality control inspectors alleged that virtually all of the company’s products were not properly tested for strength, durability and a host of technical specifications.

This week, in the first interviews those employees have granted, they said their lawsuit alleges that Voi-Shan management was fully aware of the inadequate testing. Millions of nuts, bolts and special rivets for commercial and military aircraft were involved, they said.

Paul Hertog and Tom Runion, the inspectors, said they were hired by Voi-Shan when they were in their early 20s and assigned to inspect parts without any training. Over the next eight years, the two said, an estimated 500 million fasteners were approved without inspection or in other cases approved after the bolts failed tests.

Voi-Shan is the largest supplier of specialty fasteners to the U.S. aerospace industry. About 60% of the bolts under investigation went into commercial passenger aircraft and engines. The remainder went into military aircraft, engines and rocket motors, according to William Ramsey, the Encino attorney representing Hertog and Runion.

Ramsey said the audit by the Defense Contract Audit Agency is aimed at documenting the alleged improper testing and its cost to the government. A Pentagon spokesman declined to comment.

The Defense Logistics Agency, another Pentagon department, suspended Voi-Shan last April from supplying any products to any federal government agency. The suspension was partially lifted in September but remains in effect at Voi-Shan’s Chatsworth facility.

After the suspension was imposed, Boeing Co. assigned a special team from its commercial aircraft unit to examine its Voi-Shan parts and found them not to be defective, a Boeing spokesman said. Other commercial users of the parts, however, stopped accepting them, though many are taking them again now, industry sources said.

None of the parts are known to have failed or caused accidents.

Hertog and Runion are plaintiffs in a whistle-blower suit brought under the False Claims Act, in which individuals can sue on behalf of the government and share in any damages awarded. They are also suing Voi-Shan for wrongful termination; they were fired in 1987, allegedly because they had complained about improper testing.

Their allegations eventually led to a federal criminal investigation, in which Voi-Shan offices were raided by a federal task force early last year.

“When you get hired in at a young age and told bad is right, you get caught up in the system,” said Runion, a senior metallurgical lab technician. “They were always telling me to heat up my stamp.”

Heating up the stamp meant putting his personal quality-approval stamp on paper work so production parts could be shipped, he said. Runion and Hertog claimed that Voi-Shan earned huge premiums by shipping products on short notice to companies that needed the parts in a hurry.

Runion said that when he was forced to approve a batch of fasteners without testing them or if they were known to be faulty, the company supplied him with a special quality approval stamp that read “Inspector 11.”

But there was no Inspector 11, and a number of employees used the stamp whenever they had to pass on a production lot that was either untested or that was known to be faulty, he said. The Federal Bureau of Investigation reportedly confiscated two “Inspector 11” stamps in its raid last year.

“I used the No. 11 stamp personally many times,” Runion said. “It was always in the lab. It sat around on (the supervisor’s) desk.”

He added: “One time a General Electric buyer wanted to know how come this Inspector 11 was doing so many tests. You never tell them the truth. When they get close, that’s when you would take them for coffee.”

Ramsey said federal agents have found that 200,000 certifications were made using the “Inspector 11” stamp, covering many thousands of individual pieces.

Runion worked in the quality assurance lab that did destructive testing, in which a few sample parts would be subjected to tests that would examine their integrity and strength until they were destroyed.

Tests intended to determine whether titanium fasteners were free of hydrogen contamination, for example, were never performed properly, Runion said. Although he was supposed to perform the hydrogen test, he was never taught how to use a special testing machine and repeatedly broke the device.

Meanwhile, Hertog was a Voi-Shan expediter, in charge of keeping jobs moving through the inspection and shipping end of the plant. He was also responsible for a so-called mag/zyglo inspection, in which bolts are submerged in a penetrating dye and then examined under a black light for defects. More than 50% of the parts produced were supposed to get the mag/zyglo test but did not, Hertog said.

Officials at Voi-Shan, a unit of New York-based Banner Industries, did not return a reporter’s telephone calls. Banner Chief Financial Officer Michael Alcox said he was not aware of the Pentagon audit.

“You have got me,” Alcox said. “It is very possible, but I honestly don’t know.” As for the suspension of Voi-Shan’s Chatsworth unit, he added, “It is obviously some inconvenience, but I am not sure how much of a burden it is.”