Reacting to charges of illegal payoffs that surfaced during the Senate confirmation of Federal Reserve Board Chairman G. William Miller, Textron Inc. appointed a special committee yesterday to search the company's worldwide operations for evidence of kickbacks or bribes.
Textron's board of directors, in a report to the Securities and Exchange Commission, said it appointed three outside directors to "undertake a company-wide, world-wide inquiry into the possibility of questionable payments or accounting practices."
During the confirmation hearings for Miller, who served as chairman of Textron before being appointed to the Fed post, there was a series of allegations that the company made illegal payments overseas to obtain contracts for its Bell helicopter subsidiary.
Specifically, Senate Banking Committee Chairman William Proxmire (D-Wis.) questioned $2.9 million in payments Bell made in 1973 to the chief of staff of the Iranian air force prior to landing a $500 million helicopter contract. The air force general, Proxmire said, also held controlling interest in the firm that served as Bell's agent in Iran.
Proxmire also questioned a helicopter sale to Ghana in which a Ghanian military official wanted Bell to overcharge the government $300,000 and then pay the money to him.
Since Miller's confirmation late last winter, however, Textron officials have revealed that a memo discussing secret payments to the Ghanaian official was destroyed the day after Miller denied any knowledge of the transaction at his confirmation hearing.
There has been no evidence showing Miller had any knowledge of either incident. A spokesman for the Federal Reserve Board would not comment on the Textron action yesterday. Miller was unavailable for comment.
At least three government agencies are currently investigating Textron's overseas activities. Senate banking committee officials said Textron is being investigated by the SEC, Internal Revenue Service and the Justice Department.
In its announcement yesterday, Textron said the special committee has hired a special council to aid its investigation and that the group was authorized to obtain the help of any auditors or advisers it deems necessary.
Appointed to the special committee were Webb C. Hayes, a Washington attorney; Richard Baker, former managing partner of Ernst & Ernst, an accounting firm; and Paul M. Fye, president of the Woods Hole Oceanographic Institution.
Textron Chairman Joseph B. Collison said the appointment of the committee is "an important step in assuring that all of us at Textron meet our commitment to honesty, integrity and lawful conduct."
The company said the committee investigation will look into "any payments to government officials, political parties or candidates, any improper payments to customers or suppliers and billing, payment and accounting practices at all Textron divisions, subsidiaries in the United States and abroad from Jan. 1, 1971 to the most recent practicable date."