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US: Court Documents Unsealed in Northrop Grumman Case

Associated Press
April 22nd, 2004

Northrop Grumman Corp., the nation's third-largest defense contractor, lied to the Air Force about the readiness of its radar-jamming equipment in the late 1980s, according to recently unsealed court documents from a whistle-blower case against the company. 

The documents, unsealed Wednesday in Chicago by U.S. District Judge Ronald Guzman, also show Century City-based Northrop Grumman submitted fraudulent bills on other equipment. 

"We lied our teeth off" and "now we need to make these lies come true," one of the documents quotes a Northrop manager telling employees in 1985, as the radar-evading equipment for the company's B-2 stealth bomber was undergoing a critical design review. 

The Northrop radar-evading program was eventually canceled by the Air Force because of problems with the systems and after rival Lockheed Martin Corp. provided an alternative. 

The whistle-blower suit is scheduled to go to trial later this year. The documents show there also are fraud accusations against Northrop in connection with the company's alleged overcharging for materials and falsifying of data. 

The Justice Department, representing the former Northrop employees who filed the suit, says Northrop managers lied about the readiness of radar-evading technology for the bomber. Filed under the False Claims Act, the suit seeks $369 million in damages. If Northrop is found guilty, the damages can be tripled. 

Northrop Grumman spokesman Frank Moore said the company will file a motion Friday to dismiss the lawsuit. 

"The company denies these allegations and will continue to vigorously defend the actions," Moore said Thursday. 

The unsealed documents pose new headaches for beleaguered Northrop Grumman, which has tried to put its troubled past behind it. 

Northrop was the target of several high-profile criminal and civil cases in the late 1980s and early 1990s. In the last year, it has settled -- without admitting any wrongdoing -- three other whistle-blower lawsuits filed against it during the early 1990s for about $200 million. 

The remaining whistle-blower suit was filed by Rex A. Robinson and James H. Holzrichter, who worked at Northrop's facility in Rolling Meadows, Ill. 

The U.S. attorney's office investigated their claims and didn't file criminal charges. In 2001, the government intervened in the case based on new information that apparently was gathered during the discovery stage of the civil suit. 

Northrop allegedly billed the government for time employees sat idly while awaiting security clearances, according to the documents. The documents also said Northrop lied about materials and material costs, concealed deficiencies in handling of inventory and scrap through fraudulent accounting and deceived government auditors.




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