Teledyne OKs $2.79-Million Settlement
Teledyne will pay $2.79 million to settle allegations that it lied about how much the company owed the federal government for failing to properly test critical military aircraft parts at its former Newbury Park plant, officials said Thursday.
The settlement deal was announced by the U.S. Department of Justice and follows a two-year federal civil investigation into claims that Teledyne hid the true amount it owed the government in a lawsuit that was settled five years ago.
In 1994, Teledyne agreed to pay $5.6 million in costs and penalties to settle a civil lawsuit in which it was alleged that the company had violated its contract terms by faking test results and improperly testing aircraft parts.
The repayment figure and fines in that settlement were calculated by the government’s lawyers with costs provided to them by the company.
An investigation into the settlement was launched in 1996 after a former Teledyne employee told the FBI that the company had provided low and out-dated costs as part of the earlier settlement, said David Nesbitt, supervisor of the Ventura FBI office.
The actual reimbursement and penalties in the 1994 suit should have been more than $8 million, Nesbitt said.
“Defendants should be aware that when they negotiate settlements with the United States, they must deal forthrightly,” Frank W. Hunger, an assistant attorney general, said in a prepared statement.
The equipment that Teledyne Electronics workers in the Newbury Park facility failed to properly test were Stinger missile parts used on Navy and Air Force warplanes that help pilots distinguish between friendly and enemy aircraft.
“This was extremely crucial testing,” Nesbitt said. “When we have our military in a fighting situation, this helps them distinguish who is a friend and who is a foe.”
In January 1995, Teledyne sold the Newbury Park facility and plants in San Diego and Northridge to Litton Industries. At the time, Teledyne said the sale had nothing to do with its legal problems.
Litton is not liable for any of the settlements.
The lawsuit against Teledyne was one of several against the company this decade.
The early 1990s saw five civil cases involving allegations of wrongdoing at Teledyne’s Newbury Park facility. In total, the company agreed in 1994 to pay more than $20 million in costs and penalties.
As in the most recent case, all the lawsuits started as a result of Teledyne whistle-blowers, officials said.
In the early 1990s, 5,900 Stinger missile parts, called Identification Friend or Foe devices, were purchased by the government from Teledyne. As part of the 1994 settlements, the company recalled and retested the devices.
The Justice Department has found no evidence that any of Teledyne’s friend or foe devices have contributed to any combat accidents, officials said.
Teledyne’s parent company, formally known as Allegheny Teledyne Inc., is based in Pittsburgh. The company’s Washington D.C.-based lawyer, Scott Arnold, could not be reached for comment late Thursday.
