Teledyne’s Legal Ills Mounting : Defense: The Justice Department joins a third whistle-blower suit against the firm, alleging falsified tests, bribery and overcharges.

In a development that deepens Teledyne’s legal problems, the Justice Department has joined a third federal whistle-blower lawsuit against the company, alleging that its controls division in Los Angeles falsified testing, bribed government officials and overcharged the Pentagon on numerous contracts.

The suit was filed under a court-ordered seal in November, 1990, by a Teledyne quality assurance engineer, who said her warnings to management about illegal practices led to threats against her job. The court seal expired Sunday, and a copy of the suit was made available to The Times.

Teledyne allegedly shipped hundreds of cockpit warning panels for the Sikorsky Blackhawk helicopter without testing to ensure that light escaping from the panels would not temporarily blind aviators wearing night-vision goggles, the suit says.

Although Teledyne ranks as the nation’s 37th-largest defense contractor, it has attracted a disproportionate share of major lawsuits by the Justice Department--so many, in fact, that the claims exceed the total worth of the firm.

The unconventional firm, headquartered on the Avenue of the Stars in Century City, has historically shunned inquiries from the press and the investment community, even though it is publicly held. Inside, the company is run through many autonomous divisions that make everything from helicopter bodies to airborne computers.

The lawsuits portray Teledyne as a firm with weak central controls that is locked in a struggle to preserve its franchise in defense contracting.

A Teledyne unit was suspended from receiving new federal contracts after it pleaded guilty earlier this month to criminal charges that it falsified testing on 12 million relay switches sold to the military over a decade. The company paid a $17.5-million criminal fine, the largest in U.S. history.

In addition to the three civil suits joined by the Justice Department, the company was recently sued in federal court by a former executive who alleged that Teledyne illegally hired an Egyptian general to bribe officials in the Middle East.

The case against the Teledyne controls division was filed under the federal False Claims Act, which allows individuals to sue on behalf of the government and share in any damages. The Justice Department, following a yearlong investigation of the Teledyne controls division case, decided in June, 1990, to join in the prosecution.

Spokesman Berkley Baker said Teledyne heightened its emphasis on ethics during the late 1980s after it entered its first guilty plea to criminal charges brought in the federal Ill Wind probe.

Baker added that the controls division case involves company actions taken years ago.

Nonetheless, the suit, which seeks damages of $300 million, contains many troubling charges. It accuses the company, for example, of failing to conduct adequate testing on cockpit instrument systems used in such military aircraft as the Grumman F-14 jet fighter and the Blackhawk helicopter.

Baker said he could not comment on specific allegations in the suit.

The suit was filed by Marianne Gendron, a quality control engineer at the controls division who had previously worked for a Japanese engineering firm in the City of Industry and at the University of New Mexico’s military weapons laboratory at Kirtland Air Force Base.

Gendron said in an interview that she learned that an internal company memorandum warned that the failure to test the cockpit-warning panels for the Blackhawk could be “life threatening.”

The suit also alleges that Teledyne officials made “payments of kickbacks and other illegal gratuities to government officials” who were supposed to oversee the company’s quality control. It does not detail those allegations.

William Ramsey, Gendron’s attorney in Valencia, said federal agents investigated Gendron’s allegations that a Teledyne controls executive had made cash “loans” to a local Defense Department official, resulting in the firing of both the executive and the government official. No criminal charges were brought.

A spokeswoman for the Defense Contract Management Command confirmed that the agency investigated the allegations and fired a supervisor who was believed to be accepting the cash loans from Teledyne. Baker, the Teledyne spokesman, said he did not have any information about the company executive involved in the allegation.

The suit also alleges that the Teledyne unit purchased millions of dollars worth of parts through an unapproved accounting “override system” that circumvented stringent military requirements for testing and tracking parts.

Normally, parts were purchased through a system that required that they be tested when delivered and carefully tracked through each production phase. The override system bypassed those requirements, the suit alleges.

Gendron started working at Teledyne in October, 1986. She was removed from her job in August, 1990, and put on paid administrative leave. She later sued the company for wrongful termination and reached an undisclosed settlement.

The events leading up to her discharge began in April, 1990, when she wrote a memorandum to Teledyne executives, detailing that $4.1 million in unauthorized parts were purchased in the override system during a three-month period in 1990.

Gendron’s memo, a copy of which was provided to The Times, said that the purchases were made “in violation” of the company’s own procedures and in violation of seven military procedures. Teledyne used the override system in an attempt to speed up programs that were far behind schedule, Gendron said in the interview.

Gendron said the controls unit was plagued by schedule delays, sloppy production practices and poor training of workers. For example, most of the division’s soldering technicians were not properly certified to perform the work, the suit alleges.

One of the operation’s customers was the French aerospace firm Aerospatiale, which purchased cockpit recording devices. In July, 1989, Aerospatiale was so dissatisfied with Teledyne’s products that it returned all of them and demanded a full refund, according to a terse letter from the company, a copy of which was provided by Gendron.

The letter notes that Teledyne’s products were “unable to effectively pass qualification and acceptance.”

The Pentagon was not satisfied with the company’s products, either, according to the suit.

Defense officials issued the controls unit a “Method C Corrective Action Request” in March, 1990. Such notices are issued when a firm is seriously deficient in fulfilling contracts.

What impact the lawsuit will have on Teledyne is not clear, since few securities analysts follow the company.

Teledyne’s Baker said the firm disclosed the existence of the controls division suit in a filing to the Securities and Exchange Commission last month. The SEC filing sheds little light on the suit, but it does indicate potential damages could be “material” to the corporation’s finances.