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US: General Dynamics Subpoenaed Over Long Island Plant

by Anitha ReddyWashington Post
March 6th, 2004

The U.S. attorney's office in the Eastern District of New York has subpoenaed General Dynamics Corp. about a New York factory it believes may have falsely certified that parts for U.S. Navy submarines were properly tested.

The Falls Church company disclosed the grand jury subpoena in the annual report it filed with the Securities and Exchange Commission yesterday. The company said the subpoena related to its Glen Cove, Long Island, operations from Jan. 1, 2000, to Aug. 8, 2003, the day it received the subpoena.

General Dynamics is the second-largest shipbuilder for the U.S. Navy behind Northrop Grumman Corp. The Glen Cove factory produces metal reinforcements to strengthen submarine periscopes and floors inside airplanes. According to the annual report, General Dynamics conducted an internal investigation of the Glen Cove operations. As a result, the company said, management decided to close the facility.

"It would be inappropriate for us to comment on a matter under litigation," said Kendell Pease, a spokesman for the company.

General Dynamics has also received a subpoena from the Defense Criminal Investigative Service relating to whether parts produced at the Glen Cove facility met military specifications. The investigative service is an arm of the Defense Department's inspector general, who is charged with policing waste, fraud and abuse.

General Dynamics purchased the Glen Cove factory as part of its acquisition of Advanced Technical Products Inc. of Roswell, Ga., in June 2002. It is unclear whether the false certification of parts suspected by federal prosecutors took place before or after the General Dynamics took over the factory.

Robert Nardoza, a spokesman for the U.S. attorney's office, declined to comment.

The government investigation will continue for some time, according to General Dynamics. But the company "believes the outcome of this matter will not have a material impact on its results of operations, financial condition or cash flows."

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