Members of a congressional committee yesterday urged Pentagon officials to stop doing business with one of the largest defense contractors, accusing Northrop Corp. of criminal negligence in production of some of the nation's most costly and important weapons systems.
Most of Northrop Corp.'s major defense programs, including the controversial B-2 "stealth" bomber and the MX intercontinental ballistic and air-launched cruise missiles, have been targets of past or continuing federal investigations, according to Justice Department documents and congressional officials.
Members of the House Energy and Commerce oversight and investigations subcommittee, in an unusually heated hearing, also criticized Pentagon and Air Force officials for failure to take tougher action against Northrop as a result of problems in management and production of weapon systems.
"The Pentagon makes coffee pots to withstand nuclear war, but doesn't even require the air-launched cruise missile to withstand temperatures of minus 65 degrees," said Rep. Gerry Sikorski (D-Minn.), referring to test requirements Northrop was accused of falsifying on the nuclear-armed weapon.
Northrop refused a request by Committee Chairman John D. Dingell (D-Mich.) to appear before the panel. A Northrop spokesman in Los Angeles said he found it an "ironic coincidence" that Dingell had scheduled the meeting just as congressional debate over the future of the $63 billion B-2 bomber is accelerating.
Wall Street analysts said they believe the hearing was a major factor in the almost 10 percent drop in Northrop shares on the stock market yesterday, a $1.37 1/2 decline to $14.12 1/2 a share, a 52-week low for the stock. Dingell said yesterday that "despite its extraordinary record of fraud in Pentagon contracting," Northrop has received $35 billion in government contracts in recent years.
Although Justice Department officials and members of the committee recommended that the Pentagon debar Northrop from future defense business because of its past record, Air Force officials said they are not considering such action. According to Pentagon acquisitions chief John A. Betti, the service is considering lifting a year-old suspension of the division of the company responsible for falsifying tests on parts of the cruise missile and the Marine Corps Harrier AV-8B jet.
Northrop pleaded guilty to 34 charges in connection with those two weapon systems and agreed to pay the government $17 million in fines. Justice Department documents released yesterday stated that the case cost the government $1.8 million to prosecute.
In a letter to Air Force officials in April, U.S. attorneys, who prosecuted the cases, said, "Northrop has yet to show remorse, and has not been forthcoming in public as to how it will mend its ways."
But Betti, who said he was not defending Northrop's actions, said Pentagon officials are satisfied with most of the company's efforts to improve management of programs.
Dingell and other committee members said yesterday that they have been told the Justice Department is investigating charges of cost mismanagement and falsification of tests on electronics for the B-2, as well as problems with the F/A-18 fighter-attack jet and allegations of bribes in connection with the attempted sale of the F-20 aircraft in Korea.