Names in the News

Justice Fines Teledyne

TELEDYNE INDUSTRIES, INC. faces $1 billion in civil damages and penalties and possible permanent suspension from Defense Department contracting after pleading guilty in October to 35 criminal counts of fraud. The charges were based on allegations raised in a civil lawsuit filed under the Federal False Claims Act by Taxpayers Against Fraud (TAF), a whistleblower protection group, on behalf of two former Teledyne employees.

 In addition to the charges against Teledyne, federal officials in Los Angeles also charged Thomas L. McDowell, Vice President of Teledyne Relays, a division of Teledyne Industries, with two counts of submitting false statements regarding the testing of electronic relay switches. McDowell pleaded guilty to those charges in October and faces, on each count, a maximum sentence of 5 years in prison and a $250,000 fine.

 The civil whistleblower suit alleges that over the past decade, the Teledyne Relays Division sold commercial-grade relay switches to the armed services while certifying that the switches had successfully met more rigorous military testing requirements. The government pays a premium of nearly four times as much for the tested, military version of the switch ($26-$27) as it would for the untested, commercial quality relay ($6-$7) provided by Teledyne.

 Electronic relay switches are used in the space shuttle, various military satellites and launching devices and a wide array of weapons systems. Relay failures can lead these systems to operate improperly and cause catastrophic damage, according to the lawsuit.

Accounting for the 300 percent overcharge for the switches, TAF estimates damages to be $250 million. Teledyne's liability could be tripled under the False Claims Act and supplemented by mandatory penalties of $5,000 to $10,000 for each false invoice submitted to the government for payment; the total could easily exceed $1 billion.

Alyeska Under Fire

ALYESKA PIPELINE SERVICE and the national investigative firm Wackenhut Corporation violated the Racketeer Influenced and Corrupt Organizations (RICO) Act and the Fair Credit Reporting Act by stealing documents and conducting unauthorized video and audio surveillance of whistleblower conduit Charles Hamel, a lawsuit filed by Hamel in October charges.

"What this case is about is an effort by ... goliath companies to obstruct justice," says John Clifford, an attorney representing Hamel.

 Alyeska operates the Trans-Alaska Pipeline System on behalf of pipeline subsidiaries of seven oil companies. The majority interest of Alyeska is held by British Petroleum Pipeline, ARCO Pipeline Company and Exxon Pipeline Company.

The suit alleges that from February 1990 through December 1990, Alyeska pursued an illegal undercover "sting" operation against Charles Hamel, his wife Kathleen and the Management Information Techologies Inc. (MITI). The suit alleges that the operation was designed to obtain information and documents in HamelÆs possession and to prevent Hamel and his sources from reporting serious environmental wrongdoing by Alyeska to the Environmental Protection Agency, Congress and AlaskaÆs Department of Environmental Conservation. Pipeline employees were feeding information about AlyeskaÆs environmental and worker safety violations to Hamel through MITI, a company for which Hamel served on the board.

Waste Mismanagement

CHEMICAL WASTE MANAGEMENT INC. (CWM), a subsidiary of Waste Management Inc. (WMI), admitted criminal guilt in connection with its operations under the Superfund Law. The company agreed to an $11.6 million criminal, civil and administrative settlement in October, in a Scranton, Pennslyvania U.S. District Court, for violations associated with the cleanup of the Lackawanna Refuse Superfund Site. The settlement is the largest ever agreed to under the Superfund law.

 WMI is the largest U.S. hazardous waste company, operating hazardous waste disposal facilities nationwide. WMI paid $8.1 million in fines for alleged environmental violations last year and $5.4 million in 1990. CWM was hired to move 60,000 tons of contaminated garbage and more than 8,500 drums of hazardous waste at the Lackawanna site in 1987. The company began the job in May 1988 and completed it in November 1988.

The government charged that CWM employees knowingly and intentionally crushed numerous drums containing hazardous substances in order to speed up the project. The hazardous substances, including various solvents, paints, thinners, sludges, organic acids and toxic metals, leaked out of the drums into the environment and contributed to the further contamination of the site. CWM failed to report this activity in violation of the Superfund law.

"Unfortunate mistakes were made by a few of our people while cleaning up the Lackawanna site four years ago," says D.P. Payne, president of CWM. "Mistakes like these are costly and cannot be tolerated by the company." CWM fired three of the employees involved and has suspended three others.

 - Ben Lilliston

 

Correction

 In OctoberÆs Multinational Monitor, the last paragraph of the "The NAFTA Nightmare" was printed as follows: "The U.S. Trade Representative (USTR) ... estimates that between 600,000 and one million new jobs will be created by exports to Mexico." In fact, the USTR believes that trade with Mexico to date has created 600,000 jobs, and that NAFTA will create approximately 400,000 new jobs.