European Stars And Stripes (Newspaper) - April 27, 1986, Darmstadt, Hesse                                Sunday april 27, 1986 the stars and stripes Page 7 Dod kickbacks widespread officials say by Nicholas d. Kristof los Angeles not kickbacks in the awarding of subcontracts by big Mili tary contractors Are widespread and institutionalized and present far More of a prob Lem than generally believed according to investigators. Crackdowns on Kickback rings have resulted in dozens of convictions in the last few years and investigators say the misconduct is part of a pattern of which they have Only scratched the surface. Subcontracting is said to account for $50 billion a year in military spending. Kickbacks take various forms investigators say. Sometimes a buyer for a prime contractor seeks gifts from a bidder for awarding a subcontract. Sometimes it is the bidder who offers a gift. Based upon the cases we be prosecuted and investigations that Are going on this May involve up to 50 percent of buyers and others in a position to award defense sub contracts said Robert c. Bonner the . Attorney in los Angeles. He was speaking of the military equipment Industry in Southern California but officials say the problem exists across the nation. The 10 biggest military contractors alone have about 6,200 buyers and there May be As Many As 30,000 buyers in the Industry according to Elise j. Bean a Senate investigator who has spent several months looking into kickbacks. Whatever form a Kickback takes the Cost is typically passed along to the prime con tractor and the government ultimately bears the Cost. Recent investigations have resulted in the conviction of employees of the Hughes air Craft co., which has since become a subsidiary of general motors corp. The Northrop corp. The Hughes helicopter co., which is now a unit of the Mcdonnell Douglas corp. The Raythelon co., and Tel Edyne inc. All prime military contractors for Tak ing kickbacks. The wave of investigations and prosecutions is partly coincidental and partly the consequence of increased scrutiny of Mili tary contractors generally. The defense department has made the ending of kickbacks a top priority Accord ing to a Dod spokesman. Congress has also fixed its sights on the Kickback problem. There s massive corruption out there said sen. Carl Levin d-mich., who held hearings on the topic last month. He noted that if even a Small percentage of military contracting was subject to kick backs you re talking about hundreds of millions of dollars in  Levin together with sen. William s. Cohen a Maine has introduced a Bill that would revise the existing anti Kickback Law and bolster the penalties. The existing stat Ute is narrow not applying for example to attempted kickbacks and carries a Maxi mum penalty of two years in prison and a $10,000 Fine. The Levin Cohen Bill would raise that to 10 years and a $250,000 Fine for individuals or a $1 million Fine for corporations. Campus Shantytown arrest a photo Boston University student Lauren Simonds is handcuffed by University police officers As she and 10 others were arrested when they tried to Stop police from dismantling an anti apartheid Shantytown on Campus. The students want by to sell its holdings in Compa Nies doing business in South Africa. Bank president s wife slain husband woman wounded the military contracting Industry itself sees the corruption As a major problem that victimized the companies As Well As the tax payer. The number of miscreants caught and punished has been mounting. Among them were a dozen people who were convicted of bid rigging in Southern California Over the last two years and Many More indictments Are expected soon. Twenty six people have been convicted in Louisiana in a Kickback scandal involving Avondale shipyards inc. And various suppliers. In addition just last month a company told Mcdonnell Douglas that it had been solicited for a Kickback by one of Mcdon Nell s engineers according to a Mcdonnell spokesman David Eastman. He said Mcdonnell immediately investigated and the Engineer resigned. Authorities Are also investigating charges of fraud by subcontractors against the mar tin Marietta corp., including the payment of kickbacks. A major problem is that kickbacks Are very difficult to detect. Audits frequently do not turn up evidence of fraud and Mili tary equipment is often so esoteric that executives do hot know what it should Cost. Military contracting companies sometimes suspect employees he said but these buyers then Are Likely to leave and join other companies As buyers. Investigators say there is fear among suppliers that if they turn in a buyer who demands kickbacks they will lose business. Otto Moulton who owns a machine com Pany in Topsfield mass., said that about five years ago when he refused to pay $45,000 to a buyer from a new Hampshire military contractor his business with that contractor fell from a rate of $500,000 to $750,000 a year to less than $50,000. Although investigators say companies Are increasingly cooperating with the govern ment they say there Are problems in the bidding process that facilitate kickbacks. Buyers Are not rotated often enough they say and they frequently Are not watched closely. Nobody questions dollars or anything like that one former Northrop buyer Ronald e. Brousseau said in a conversation that was secretly recorded by the Fri. Partly on the basis of evidence in the tapes Brousseau is serving a three year prison sentence for accepting $4,000 in Exchange for awarding subcontracts. One Way of limiting the Opportunity for kickbacks said Fred d. Heather an assist ant . Attorney in los Angeles would be to direct bids to someone other than the buyer. That would prevent the buyer from informing a subcontractor of the rival bids and permitting a new lower bid that could be backdated. Despite the Progress they have made investigators say they have been startled by the continuing bravado shown by those engaged in kickbacks. Two buyers at Hughes aircraft according to Covert tape record Ings accepted payments in the form of co Caine. And a vice president of Tel Edyne camera systems in California accepted payments in checks made out to a company he formed called profit maker enterprises. Nasa disputes reports of poor management Raymondville to. A a 40 year old Man has been charged with first de Gree murder in connection with the slaying of a Bank president s wife and with two counts of first degree assault in the wounding of the executive and another Bank official. Roy g. White of Houston mo., is being held without bail in the Texas county jail in Houston it. Ralph Biele of the Missouri Highway patrol said Friday. He appeared before Texas county associate District court judge . Becker Friday night after being picked up in a manhunt earlier Friday near Houston a town in Southern Missouri. Mrs. Wanda Byler 54. Was blindfolded bound and shot 12 times with at least two different weapons one a .38-caliber and the other a .22-caliber, by one or More gunmen. Her husband James president of the Farmers state Bank of Texas county had been ordered to bring $100,000 to his Home. Her body was found under her bed. James Byler and Loretta Kay Jordan the Bank s executive vice president were shot and wounded at Byler s Home after they brought Only about $20,000, police said. The investigation was continuing Biele said but would not say How Many if any other suspects were being sought. James Byler 56, and Jordan 33, were each shot once in the head. Jordan was reported in serious condition while Byler was in fair condition. Washington a the National aeronautics and space administration says allegations that mismanagement of the space shuttle and other programs has Cost the Agency billions of dollars and compromised safety Are misleading. In a statement Friday Nasa said two articles published by the new York times do not accurately represent the Way Nasa is  Richard Flaste the director of science news at the times coordinated the articles. He said he was enormously proud of this series and defended its accuracy. The times said the articles were based on a review of More than 500 audits other government documents and economic re ports by outside experts and from inter views with american space experts. The newspaper reported wednesday that audits show Nasa and its contractors have wasted billions of dollars on the space shuttle and other space programs despite warn Ings by government inspectors that such heavy losses were occurring As a result of poor management. The times reported thursday that Nasa Cut or delayed $500 million in spending on safety testing design and development from the time the shuttle pro Gram began in the Early 1970s until the challenger explosion Jan. 28, which killed the seven Crew members and grounded the shuttle program. The two article series deals with implications and draws conclusions which in significant respects do not accurately rep resent the Way Nasa is managed the space Agency said. The primary focus of the articles is on audits and safety with particular emphasis on the space shuttle program a uniquely technical and Complex spaceflight system undertaken in an economical manner providing adequate testing to ensure that safety was always the first  Nasa said Many of the allegations were based on the Agency s internal audits and that corrective action has been taken or is in the process.". Flaste said of the series i think it s accurate. It stands on its own. It quoted offi Cial sources. This was not the new York times making  in Friday s editions of the times the newspaper quoted Harry r. Finley a top official with the general accounting of fice As saying his Agency s findings were accurately reported in the series. Finley also is quoted As saying Nasa was not responsive to auditors suggestions for managerial improvement. In addressing allegations of Cost increases Nasa said Many of the audits dealt with research and development projects which Are Uncertain by nature. Problems of technical development scheduling and budget estimating can reasonably be expected the statement said. In this context Cost increases Are not at All unusual in the Complex environment of re search and development and Nasa s re Cord compares favourably with both Industry and other Federal  development of the shuttle Cost about 30 percent More than anticipated an amount Nasa said was remarkable in View of the technical and economic uncertainties encountered in developing a totally new space transportation  Nasa also took Issue with the times charge that the Cost of lifting shuttle cargo is nine to 19 times higher than Nasa s original estimates. The space Agency said the Cost was Only about four times As High. Nasa acknowledged that it sometimes operated under tight fiscal constraints that caused changes in operations forcing delays in schedules that can add to the costs of a program. Nevertheless safety has Al ways been a Paramount concern of Nasa it said. Nasa said the shuttle in t equipped with As much test hardware As the earlier Apollo spacecraft. The result Nasa said is that it takes longer to conduct some tests and when the test involved issues of sys tems performance or safety time was taken to run the necessary  the Agency cited As an example the additional time and expense it took to test the heat resistant tiles designed to protect the orbiter on re entry