Bethlehem Steel, which pleaded guilty last week to a scheme of bribery to win lucrative ship repair contracts, had been luring business to its shipyards that way for 15 to 30 years before the practive ended in 1976, according to two former employes.
In papers filed in a civil suit in U.S. District Court in Philadelphia, two former employes, now charged by the giant steelmaker with diverting the company's money to their own use, said they simply were following longstanding unwritten company policy in transfering huge sums of cash from a Swiss account to bribe shipowners' representatives.
In face, according to Thomas A. LaMonica, it was a well-oiled, self-supporting scheme in which shipowners themselves unwittingly funded the bribes by paying amounts disguised and added to their total repair bills.
LaMonica was assistant to the general manager of the Baltimore shipyard until 1976, when he and codefendant Clifford Y. Wise were dismissed by Bethlehem. Wise was manager of Bethlehem's ship repair sales office in New York.
In January 1977, Bethlehem filed suit against the two men, charging that they siphoned off money generated by the commission scheme of their own use. The two men denied the charges.
An enormous stack of depositions and affidavits on file in that case tell repeated stories of Bethlehem employes flying to Switzerland to pick up cash to deliver to the United States or South America.
For instance, Wise describes in a deposition, how he and his secretary would fly to Switzerland, returning with cash stuffed into briefcases or suitcases. In still another instance, Wise tells of delivering $115,000 to a woman in Venezuela.
Bethlehem pleaded guilty last Thursday to a variety of charges centered around the payment of more than $400,000 in bribes to shipowners' representatives to persuade them to throw repair business Bethlehems' representatives to persuade them to throw repair business Bethlehem's way or to take care of bills expeditiously.
The "bank" through which the payments were made was a Swiss company, Office Pour Le Financement du Commerce et de L'Industrie. Bethlehem would send money to OFCI which later would be turned over to shipowner representatives.
In still another scheme, money for bribes was generated by phony invoices submitted to Bethlehem by a Venezuelan film called Autorama, according to papers in Philadelphia. Through a combination of the two schemes, Bethlehem raised nearly $2 million between 1972 and 1976, to be used for brides, according to federal prosecutors.
In affidavits filed in Philadelphia, both LaMonica and Wise admit to participating in the scheme but deny they deverted any money to their own use.
LaMonica said that as early as 1947, when he became a ship superintendent at Bethlehem's Baltimore yard, "he became aware that Bethlehem has a system for making payment and commissions to persons who were instrumental in obtaining ship repair work for Baltimore yard." He added later that "Bethlehem's high officials knew of commission arrangements, and they set up the system . . . so that the customer and not Bethlehem was actually supplying funds to pay commissions."
"Mr. LaMonica does not deny that he handled vast sums of money for Bethlehem, but he vigorously denies that he converted Bethlehem's money to his own use," LaMonica's attorney argued in response to pretrial motions.
"Although the eupemism 'commissions,' is used in his affidavit, what Mr. LaMonica is saying is clear -- Bethlehem Steel Co. has for at least the past 30 years regularly paid bribes and kickbacks to persons who were instrumental in awarding ship repair contracts to Bethlehem," the attorny said.
A spokesman for Bethlehem Steel said yesterday that the company had no response to any of the comments made in the course of the civil proceeding in Philadelphia. "The matter is in litigation. We don't have anything to add to what we've said," said Marshall Post, a spokesman for Bethlehem Steel.
Wise has countersued Bethlehem, asking for $3.645 million in damages for alleged breach of contract and other wrongs.
Bethlehem said last week that it accepted "corporate responsibility" for the acts detailed by the Department of Justice but noted that the company was suing LaMonica and Wise in Philadelphia.