Rockwell May Be Fined, Not Get U.S. Work : Grand jury: Probe continues into aerospace company's handling of hazardous materials.

From Staff and Wire Reports

In a report released Thursday, Rockwell International Corp. warned that it faces possible fines, and perhaps exclusion from new government business, as a result of a federal grand jury investigation into the handling of hazardous materials at its facility in the Simi Hills west of Chatsworth.

In its latest Securities and Exchange Commission filing, the aerospace and electronics giant said that the probe of an explosion at a lab operated by its Rocketdyne division is "attempting to determine whether the accident occurred during an illegal disposal of hazardous waste, and whether hazardous wastes were being illegally stored."

The warning was first reported in Thursday's Wall Street Journal.

Investigation into the explosion involves the Federal Bureau of Investigation, the Environmental Protection Agency, the National Aeronautics and Space Administration and the Defense Department as well as the grand jury. Two company scientists, Otto K. Heiney and Larry A. Pugh, were killed in the explosion.

"There is a risk that civil or criminal fines may be imposed, and that Rocketdyne or the company may be suspended or debarred from government contracts as a result of the incident," the SEC filing says, adding that company officials believe business won't be adversely affected.

According to the Wall Street Journal, the grand jury is also looking into the conduct of top Rocketdyne officials, including division president Paul Smith. The Journal also reported that Rockwell officials had met with authorities to discuss a $10-million settlement, only to have discussions scuttled by agents seeking to expand their probe.

A Rockwell spokesman Thursday said that government officials had assured Rockwell that Smith was not a subject of the grand jury probe. The Rockwell spokesman and government authorities on Thursday would not comment on the reported settlement offer.

For decades, Rocketdyne used the California lab at which the July 1994 explosion occurred for research involving things such as nuclear reactors and rocket engines.

Such activities generated hazardous waste. California state records show that, for almost 30 years, the company burned or blew up the waste to get rid of it.

Until 1989, such disposal methods were legal. That year, state officials ordered the practice stopped. However, Rocketdyne was accused of continuing to burn waste at the site into 1990.

That led to a state complaint, and eventually payment of almost $700,000 by the company.

The 1994 explosion renewed federal and state interest in the facility. In July, officials from the FBI, EPA, NASA, and the Pentagon seized company records relating to waste disposal.

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