European Stars And Stripes (Newspaper) - December 23, 1988, Darmstadt, Hesse Friday december 23. 19b8 the stars and stripes Page 5 probe claims Dod secrets still sold Pentagon officials told 5 years ago Weinberger Washington api the govern Mem has known for Al least fix a years of a widespread Black market1 for secret Pentagon documents among defense contractor and consultants but has no moved to curb the practice congressional investigators said in Side the defens department i covered the prac Tice As Long ago As 1983 and sought to faring it to the at Tention of defense Secretary Caspa Weinberger and the Justice department hut were thwarted leading them to believe the practice was condoned the report trading usually involved outside defense consultant who developed sources inside the Pentagon that could furnish them with classified data including bid specifications for weapons sys tems and Long Range defense acquisition plans. It was never determined whether Pentagon employees were paid for the documents the report said. The consultants sold secrets to con tractors who could use them to gel an Edge on their competitors depriving the government of Cost saving benefits from open Competition concluded the investigation by the staff of the congressional joint economic committee. Sen. William i tos Mirc d-wis., chair Man of the panel s National Security sub committee said at a hearing that the prac Tice is even worse than the widely publicized Pentagon procurement fraud scandal because it involves not just Busi Ness information but also secrets that if revealed could damage National Security. The practice which witnesses said involved at least two dozen defense con tractors is still going on said Donal Mancuso an assistant Pentagon inspector general. John f. Donnelly director of the de sense invest alive service told the hear ing his Agency has recommended a series of safeguards to prevent the practice his investigator uncovered including regu Lar audits to assure the secure handling of classified documents. The congressional report Solcs thai in Tornal Pentagon investigators discovered the trafficking in secret documents in1983, while investigating an employee in California of get corp., a defense con tractor. The documents were obtained outside Normal channels through a Pri vate consultant. A similar investigation in Ohio involving the National aeronautics and space administration sur faced at about the same Lime. But when investigators went to Penta gon superiors with what they had found and asked for support in broadening their investigation their requests were largely ignored the report said. Onty the get Case went to court where it is still pending. Lawyers for the contractor have used As part of their de sense the Contention that inc unauthorised Possession of classified program planning and budget documents is wide spread in the Industry. By 1984, the Pentagon investigators had linked defense department Oil rials consultants and 2s contractors suspected in trafficking in classified documents. Memorandum from Pentagon inspector general Joseph Sherick stated that consultants acting As information brokers sell these documents to a number of major defense of the information would be of such value to hostile Powers that it could not even be declassified for court use Schrick wrote. But Schrick s memo in tended for Weinberger never got through the Pentagon general counsel. Chapman , who did not Send it on to Weinberger the report said. In a note Back to the inspector general con said he was not forwarding the. Memo to Weinberger because he believed it was unnecessary and that the Justice department already was looking into the Mailer. Hut the investigator said there ultimately was Little follow up by Justice officials. That and other information provide conclusive evidence that the govern ment has indeed known for several Yea about the trafficking of classified and other sensitive documents and has Sim ply failed to Stop it said sen. Charle Grassley a Lowa who attended the hearing. The government was astr up Pentagon whistle Blower Ernest Fitzgerald said at the hearing that Trad ing in classified documents is a symptom of a looseness in the defense establish Wilham proxy arc Mem which permits the government join effect Rig bids and favor certain con tractors. Pentagon employees Are encouraged to look the other Way since they arc Likely logo to work for contractors once hey retire from government work he s no future in kicking giant con tractors who May be their future employers in the Fitzgerald said. Shoppers storm stores in Christmas crush new York al1 shoppers Are descending upon stores across the country bringing goad tidings far retailers hoping Lor a successful 1988 Holiday season bul frustration to Consumers who May find some items out of Stock we re definitely having a Rush Here said Iridine King a spokeswoman Al Macy s in the Houston galleria on wednesday. We be seen a tremendous increase in business.". Macy s flagship store in new York also reported brisk sales with the Selling floors getting Buster every Day California retailers hid sales were growing steadily. They arc All big Days this week very heavy said Bil Dombrowski spokesman for Carter Hawley Hale stores. Inc., which owns Broadway Emporium Capwill thai Heimers and Winstock s department stores in California and the southwest., signs of a last minute Rush also abounded at the 160-store galleria mall at South Day in Redondo reach. Calif. Marketing director Kim Olson said traffic counts were increasing daily. At Ushman a a Houston based sporting goods Chain the late shopping Sui a was materializing company presi Dent Marvin Aronowitz said. We have had Snow in Cali fornia and we be had Good sates on ski apparel and acres sories."-. The Pace also was stepped up at the elegant Edmund jewelry co., in the wealthy Detroit suburb of Gross Point Woods. " Drexel Burnham pleads guilty new York a Wall Street Elani Lambert inc. Agreed wednesday to plead guilty to six Federal felony counts and pay a record$650 million Fine to Settle the biggest securities fraud. Case in history. Company spokesman Steven and Cdr said Drexel s Hoard concluded that this settlement is in the Best interest of our firm and our agreement Wilh . Attorney Rudolph w. Giu Liani which still requires approval by the securities and Exchange commission and senior Justice depart. Mint officials would Cap More than two years of investigation into dealings of the Nalion s fifth largest investment firm. ,. Sec enforcement director Gary Lynch did not immediately return Telephone Calls for comment about the agreement Between Giuliani and or excl which pioneered the use of High risk junk Bonds to bankroll some of the biggest corporate takeovers in history. The agreement would be the biggest break so far in a Federal crackdown on securities fraud that resulted inthe arrest two years ago of Ivan Boesky the now imprisoned inside trader who turned state s and admission of guilt to felony a turnaround for a excl. Which was implicated by Brocsky in a Range of securities frauds but had denied an wrongdoing. It also exposes the firm to numerous lawsuits by investors who can were victimized by Drexel s and Mill Day illegal acts. The $650 million Fine is by for the biggest penalty assessed for securities fraud easily surpassing the pre Vious record of $100 million levied against Brocsky in november 1986,. The settlement also Marks a major Victory for Giuliani who had been pressuring the firm for weeks to Settle the Case or face a much broader and potentially crippling racketeering and fraud indictment Giuliani told reporters the charges concern Drexel Only and not any individuals suggesting others May be charged. The David felonies Coyer mail wire and Securi ties to stud violations but Giuliani would not be More specific. -. Asked Why he chose to press for a settlement instead of proceed with an indictment in the highly publicized Case Giuliani said when a corporation is involved the bes result you can get after any trial is a financial result. There s no Point of prolonging this gelling involved i criminal litigation to get a result that would not be any. Belter than several key Drexel executives themselves had Bee pushing for a settlement saying the continuing barrage of publicity and negative speculation was eroding the firm ability to maintain its business. Anreder alluded to the internal pressure for a settlement in his statement saying for the past two years our employees have endured extraordinary hardship an this unprecedented and Cor plex Case might have taken several More years to resolve his Brief statement made no mention of Drexel s High yield Bond executive Michael Milken who also was tar Geld in a Cri Miraj probe Rotthe firm. These three Days you can t believe How fast people buy they re so desperate said owner Edmund t. Ahee. Bul some of the desperation May be from disappoint mint the procrastinating shoppers face when they can t find the gins they want. Retailers forced to acc a cautious stance by nearly two years of sluggish sales have kept inventories tight so they would not be saddled with surplus merchandise or forced to slosh prices. At the Dallos based Ciman Marcus Catalon sales exceeded expectations and the store has run out of some items said spokeswoman Pat Kujac. As people Call in to order we Are offering alternatives she said. About 15 to 20 items were out of Stock including som Crystol s25-and-under gifts and apparel she said Sands of time in the stars and stripes 40 years ago today ,. Dec. 23, 1948 Jain s former Premier and War time dictator Hidek Tojo and six other japanese War leaders were hanged at Sulamo prison in Tokyo for the murder and enslavement of millions during world War it. 30 years ago today dec. 23, 1958 a West German Industrial group together with firms from other Western countries made an offer to the United Arab Republic to build the controversial Aswan dam. 20 years ago of Day. Dec 23, 1968 hurtling past the Halfway Point ar3,623 three astronauts aboard Apollo 8 beamed Back to Earth the first telecast from in ice planetary space. 10 years ago today. Dec 23, 1978 after a Long negotiating session Between Secretary of state Cyrus r. Vance and soviet foreign minister Andrei Gromyko the United slates and the soviet reported to have reached tentative agreement on a strategic arms limitation trea in
