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US: Lockheed Martin Lobby Group Audited

by Renae MerleWashington Post
January 28th, 2004

The Federal Election Commission will audit Lockheed Martin Corp.'s political action committee after a former manager allegedly embezzled at least $170,000 from the fund, the company said yesterday.

Last month, Lockheed discovered that the assistant treasurer of the PAC had written checks to himself, company spokesman Tom Jurkowsky said.

The assistant treasurer covered up the activity by recording the transactions, which date to November 2001, as contributions to political candidates, Jurkowsky said. The company did not discover the problem until an FEC employee called and alerted the manager's boss that several agency letters questioning the political action committee's reporting had gone unanswered, Jurkowsky said.

Because the assistant treasurer also was not filing FEC reports on time, the PAC was fined by the agency for violations, Jurkowsky said. The company will attempt to recover losses associated with the incident from its insurance company and the manager, he said. The assistant treasurer was fired earlier this month.

Jurkowsky refused to name the manager because doing so would violate company policy. In Federal Election Commission filings, Kenneth D. Phelps is named as the assistant treasurer. Phelps's home phone number is unlisted and a message on his office phone said he no longer worked at the company.

An FEC spokesman could not be reached for comment yesterday.

The company has since tightened oversight of the fund, moving check-writing responsibilities for the PAC to Lockheed's central accounting office, Jurkowsky said. "Some of the standards we have now are unmatched in the industry. We've learned some lessons here and are managing these monies differently," he said.

Lockheed Martin Employees Political Action Committee is one of the 50 most generous PACs in the country, according to FEC data. With contributions from 3,000 employees, it donates $500,000 a year to about 260 House and Senate candidates. For the 2004 election cycle, Lockheed's PAC has already contributed $350,279 to federal candidates, with about 62 percent going to Republicans, according to the Center for Responsive Politics. That compares with $515,000 from General Dynamics' political action committee and $122,850 from BAE Systems North America, the center's data showed.

Researcher Richard Drezen contributed to this report.





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