A GTE Corp. subsidiary agreed to plead guilty to criminal charges yesterday for improperly obtaining classified Pentagon documents involving electronic warfare contracts on which the company was seeking to bid.
In what prosecutors described as the first such case involving leaked Defense Department budget documents, GTE agreed to pay $580,000 for the government's investigative costs. The Connecticut-based company, which was the Pentagon's 32nd largest contractor with $707 million in sales last year, also agreed to pay a $10,000 fine.
The agreement was announced after prosecutors filed a criminal information in federal court in Alexandria against GTE Government Systems Corp., a major supplier of electronic warfare equipment.
It also followed a federal grand jury indictment charging three persons connected to the company with conspiracy to obtain internal Pentagon budget and planning documents and defrauding the federal procurement process.
Those charged were Bernie E. Zettl, 62, of McLean, a retired Air Force major and former consultant to GTE; Walter R. Edgington, 60, of Annandale, a GTE vice president, and Robert R. Carter, 55, of Mountain View, Calif., former marketing manager of the company's electronic warfare unit.
Morris Silverstein, head of the Defense Procurement Fraud Unit, a joint venture of the Justice Department and Pentagon, said this is the first time a contractor has been prosecuted for what GTE contends is a widespread practice.
"The practice of revealing to unauthorized persons these budgetary planning documents is something that we think has got to be stopped," Silverstein said. "It gives certain individuals and companies a leg up on certain kinds of information."
Silverstein said that there was insufficient evidence to charge Pentagon officials in connection with the case but that the investigation is continuing.
Harvey Griesman, GTE's director of media relations, said that "the use of such documents was a common industrywide practice" and that they were handled only by employes with appropriate security clearances. He said that the offenses occurred more than two years ago and that the company plans an education program "to prevent any recurrence of such activities."
A Pentagon spokesman, Lt. Col. Pete Wyro, called GTE's conduct "unacceptable." He said the company also agreed to refund all payments made to consultant Zettl, which prosecutors said totaled more than $119,000 from 1979 through 1983.
Wyro said the three men charged will be permanently suspended from receiving federal contracts, although GTE will continue to be eligible if its officers and employes certify annually that they have not improperly acquired internal Pentagon documents.
GTE officials took several steps to conceal possession of the internal documents, according to the criminal charges. They avoided normal delivery channels within the company and transferred some documents through a special post office box not used for any other purpose, according to the charges.
Zettl provided the documents to the company, according to the charges. Zettl has done consulting work for several major defense contractors and is a founder and former president of the 20,000-member Association of Old Crows, a global fraternity of electronic-warfare experts.
A 1979 GTE memorandum about Zettl's consulting arrangement said that "we do not want to list on paper the work that he is doing," according to the charges.
In early 1983, according to the charges, GTE employes in California began destroying documents they had obtained through the unusual company channels.
Zettl and Edgington face a maximum of 25 years in prison and a $30,000 fine if convicted; Carter faces five years and a $10,000 fine.