Probe Launched Into Lockheed : Defense: A grand jury is investigating possible illegal payments made to win foreign contracts.
A federal grand jury in Texas is looking into whether Lockheed Martin Corp. made illegal payments to foreign consultants to win fighter aircraft orders.
Lockheed Martin’s Ft. Worth Co. unit, which makes the F-16, is gathering records related to the company’s consultant agreements to turn over to a grand jury in Dallas, according to a filing with the Securities and Exchange Commission.
“The subpoena is very broad,” said Joseph Stout, a spokesman for the division, which received the subpoena in July. “There is no allegation of any wrongdoing and we’re not aware of anything improper being done.”
The government asked for documents from January, 1990, to the present, Stout said, indicating that the probe involves General Dynamics Corp. as well.
General Dynamics, which sold the plant in Ft. Worth to Lockheed Corp. in March, 1993, for $1.5 billion, also received a subpoena. Lockheed merged with Martin Marietta Corp. last March.
General Dynamics, based in Falls Church, Va., is turning over “everything regarding our agreements with other countries” to the grand jury, company spokeswoman Norine Lyons said, adding that the company had done nothing wrong.
“We’re confident that when the government reviews [the documents], it won’t find anything inappropriate,” she said.
A spokeswoman for the U.S. attorney’s office for the northern district of Texas declined to comment.
The F-16 has been the Air Force’s main fighter jet since the mid-1970s, although Lockheed Martin now depends on foreign governments for business.
Since 1990, Lockheed Martin has sold the single-engine F-16 to governments of Egypt, Portugal, Turkey, Thailand, South Korea, Singapore and Taiwan. The government’s subpoenas do not say which sales it is investigating, Stout said.
“We don’t really know exactly what the intent of the subpoena is,” he said.
Lockheed Martin’s filing says the company is also the subject of another federal grand jury probe in U.S. District Court for Central California, which is based in Los Angeles.
In that case, the grand jury subpoenaed documents related to the “company’s business in Korea,” according to the filing. But Lockheed Martin did not specify if it was referring to North or South Korea or the type of business.
The company declined to comment on the nature of that subpoena.
Lockheed has had legal problems with overseas sales before.
Most recently, a former Lockheed executive, Suleiman Nassar, pleaded guilty to bribing an Egyptian politician to arrange the sale of three C-130 transport planes for $79 million in 1989. Nassar, who spent a year as a fugitive before surrendering to authorities in July, is awaiting sentencing.
In January, the company agreed to pay $24.8 million--the maximum penalty allowed under the law--to settle the charges. The company pleaded guilty to conspiring to violate the Foreign Corrupt Practices Act and to falsifying its books. Another former executive also pleaded guilty to a related misdemeanor charge.