FBI Absolves TRW After Probe Into Fraud Accusations

The FBI has cleared TRW Inc. of allegations made by a former employee that the large defense contractor was guilty of fraud and cover-up in developing a key component of the controversial national missile defense program.

The decision dealt another blow to claims by former senior TRW engineer Nira Schwartz that the company faked test results in developing a prototype “kill vehicle” for an antimissile system. A separate lawsuit against TRW is pending in federal court.

FBI officials said Friday that the agency conducted an investigation, “which failed to disclose that a federal violation had been committed.”

“Since all logical investigation has been completed, the matter is closed,” the FBI said.

FBI’s decision marks the second time the allegation has been dismissed. A 1999 review by the Justice and Defense departments in the whistle-blower lawsuit also found no basis for fraud in TRW’s testing.

The “kill vehicle” is a component of the proposed antimissile system that would be lifted into space on the nose of an interceptor missile. It is supposed to use infrared and optical sensors, and small rockets, to find the enemy warhead and destroy it by a direct collision.

Schwartz, TRW senior engineer in 1995 and 1996, alleged the company fudged flight test data to conceal that its kill vehicle was unable to pick out warheads from the decoys.

Fired by TRW, she sued the company in 1996 under the False Claims Act. The federal government, however, declined to join her lawsuit after determining there was no evidence to support the charges. Schwartz would have received a monetary award if TRW lost.

Last June, 53 House members asked the FBI to investigate the allegations after an MIT physics professor joined Schwartz in alleging that TRW and the Pentagon committed “fraud and cover-up” by tampering with the results of the program’s first test flight, hiding the fact that the warhead can’t distinguish between decoys and the real thing.

The test was conducted in a competition between TRW and Raytheon Co., which TRW eventually lost. The allegations were first published by the New York Times and the publicity prompted the congressional request.

The General Accounting Office, the investigative arm of Congress, is also looking into the allegations and is expected to conclude its investigation later this year. The FBI officials said the agency closed the case in late February, saying the charges were “a scientific dispute” and that “attempts to raise it to the level of criminal conduct had no basis in fact.”

The FBI’s action removes at least one criticism hanging over the missile defense program just as the Bush administration presses ahead with plans to expand it.

A TRW spokesman said the company was unaware of the finding but that it was “delighted” if it is true.

TRW is one of the top subcontractors on the National Missile Defense program, which is managed by Boeing Co. TRW provides the command and control system, or electronic brains, that receive and process target information to missile interceptors carrying Raytheon hit-to-kill warheads.

TRW’s Space & Electronics Group, based in Redondo Beach, is also competing to build a constellation of about 24 satellites, called Space Based Infrared Systems Low. This network, scheduled to be deployed in 2006, is key to its ability to track larger numbers of attacking missiles.