When Rep. Joseph P. Addabbo (D-N.Y.) asked the Navy why it needed to buy more P3 submarine-hunting airplanes, he was told the information was classified and could not be given to Congress because it might leak out.
A few days later, however, Addabbo received the internal Navy data he was looking for -- in an unsolicited letter from Lockheed Corp., the planes' manufacturer.
Federal investigators are increasingly concerned that defense contractors, through a mixture of intrigue, old-boy connections or even outright bribery, have managed to gain access to confidential Pentagon documents.
In Philadelphia, 20 defense contractors and Pentagon employes have been charged so far in a wide-ranging scheme in which confidential bidding information was given to the companies in exchange for cash kickbacks. More indictments are expected.
In another case, an executive fired by McDonnell Douglas Corp. has accused the company in a civil suit of corrupt practices, including the improper acquisition of military documents and "lax" handling of classified material. McDonnell Douglas, the nation's largest defense contractor, denied the charges, saying they were not substantiated by an internal investigation.
Concerns about unauthorized disclosures were underscored Tuesday when a GTE Corp. subsidiary, a retired Air Force major in McLean and two others were charged with conspiring to obtain classified documents on electronic-warfare contracts the company was seeking. GTE said the receipt of such internal budget documents, which it stored in a special post office box, was "a common industry-wide practice," and federal officials did not dispute the statement.
"The investigation is continuing with regard to others who may have engaged in the same practices," said Morris Silverstein, head of the Defense Procurement Fraud Unit, which brought the GTE charges. "This is just the first case that was uncovered."
A Defense Department spokesman added yesterday that the Pentagon "will actively seek out similar offenses and seek prosecution of them."
The indictment says the documents were obtained for GTE Government Systems Corp. by its former consultant, retired Air Force major Bernie E. Zettl, who has also done consulting work for Northrop Corp., TRW and other major defense contractors. Zettl founded the Association of Old Crows, an influential 23,000-member fraternity of retired military men and contractor employes who share information on electronic warfare.
Neither Zettl nor his attorney could be reached for comment. But Zettl told The Wall Street Journal in March that the kind of consulting work he performed was "something that was done by many other people . . . . The documents were readily available to any company that wanted to go to the trouble . . . and pick them up."
GTE agreed today to plead guilty to the charges and to pay $590,000 in legal costs and fines. The Old Crows said in a statement that they knew nothing about the GTE case.
After the Lockheed incident occurred in 1983, it was later examined by the Defense Department's inspector general. Addabbo, chairman of a House defense appropriations subcommittee, wanted to know why the Navy planned to buy new P3 airplanes with advanced electronic equipment rather than refurbishing old ones.
Although the Navy refused to answer the congressman's classified questions, Lockheed was eager to justify the purchases and sent Addabbo nine pages of confidential information, as well as the subcommittee's own unedited and unpublished hearing transcripts. Lockheed's mailing also included the subcommittee's questions to the Navy and the Navy's replies, which had not yet been sent to Addabbo.
The inspector general's report blamed the incident on the "close working relationship" between Navy and Lockheed officials. It said that "a violation of security regulations may have occurred and the contractor may have obtained an unfair advantage over the government."
Lockheed spokesman Nick Duretta said a subsequent Navy inquiry found that the company had not violated any laws or regulations.
"It was one of those gray areas where we were working very closely with the special-project office," he said. "It's not unusual, where we're working very closely with the customer on a project like this, for there to be freer exchange of information than there would be on a larger project."
The 20 convictions at the Defense Industrial Supply Center in Philadelphia involve part of the $600 million the yard spends each year on nuts, bolts, screws and other spare parts.
Richard Seaman of the Defense Procurement Fraud Unit said the eight convicted Pentagon employes exploited the fact that only three bidders are required on the smaller procurements. After receiving the first two unsealed bids, Seaman said, the agents would leak the prices to a third competitor, who would win the contract by submitting a slightly lower bid before the deadline.
"It was extremely widespread," Seaman said. "It became a way of life out there. The going rate [for kickbacks] was 5 percent of the contract."
One Pentagon purchasing agent, Thomas M. Lofgren, pleaded guilty to accepting $27,000 from several contractors and was sentenced to a year in prison. Another, Booker Raynor Jr., was convicted of accepting $16,500 from Delsea Fasteners Inc. and received a year in prison. Officials at Delsea, which received more than $1 million in contracts, pleaded guilty to bribing eight Pentagon employes and are awaiting sentencing.
Robert Lambert, president of Standard Air Parts Inc., was sentenced to four years in prison and fined $208,000 for bribing purchasing agents. The firm received $2.3 million in Pentagon contracts over a four-year period.
Seaman said the scheme damaged the government because "the only people who end up getting contracts are the people who are paying bribes; the honest competitors were getting shut out."