A federal appeals court in Richmond has reinstated indictments charging Computer Sciences Corp. and six individuals with fraud and racketeering involving a $100 million General Services Administration contract.
The decision by a three-judge panel reverses the action of an Alexandria district court judge who early last year threw out the entire 57-count indictment based on alleged grand jury irregularities, prosecutorial misconduct and other legal errors.
The decision, made public here yesterday, means CSC and the six individuals will face trial shortly in U.S. District Court in Alexandria unless defense lawyers file new appeals.
In its opinion, the appellate court upheld U.S. District Court Judge Richard L. Williams' dismissal of three racketeering counts against CSC, saying prosecutors were wrong to cite dealings by the parent company with one of its own divisions as evidence of a pattern of racketeering activity. But the court reinstated racketeering charges against the six individuals and restored other charges against them and the company.
CSC and the six individuals, including current and former employes, were indicted in October 1979 on charges of bribing a GSA official during negotiations for a $100 million governmentwide computer-time-sharing contract. Shortly after the contract was awarded, the official was hired by CSC, a California-based firm with extensive operations in Northern Virginia. Prosecutors also contended that CSC illegally boosted the prices paid for computer services by the government.
A spokesman at CSC's principal offices in El Segundo, Calif., said yesterday "it is likely" the company will request a rehearing of the appeal before the full nine-member 4th U.S. Circuit Court of Appeals in Richmond. Such requests are rarely granted, according to several lawyers.
The company, which repeatedly has denied the charges, "continues to believe that all of the charges are without a factual basis," the spokesman said.
The court rejected a defense claim that the grand jury's deliberations were tainted because unauthorized persons--including an air conditioning maintenance worker--were present briefly on five occasions in the grand jury room. The intrusions were "rare, inadvertent and nonprejudicial," the court said.