A major Pentagon contractor is firing all its defense consultants and shaking up management of one division based on an internal investigation separate from the massive government bribery inquiry now being presented to a federal grand jury.
The federal grand jury in Alexandria, Va., headed into its second day of closed-door testimony Wednesday, with a chief prosecutor promising "there won't be any luminaries" testifying soon.Meanwhile, Unisys Corp., the giant computer company based in Blue Bell, Pa., announced that an internal investigation of its defense consultants by former Watergate special prosecutor Henry Ruth had uncovered possibly unethical activity in one division.
Unisys Chairman W. Michael Blumenthal said the company began the Ruth investigation last fall without knowledge of the nearly 2-year-old federal investigation, which was first revealed by coordinated FBI searches on June 14.
No one has been charged in the investigation of the $150-billion-a-year Pentagon purchasing system. But government documents allege that some defense contractors and consultants bribed Pentagon officials for contracting details vital to winning contracts worth billions of dollars.
At Unisys, Blumenthal placed a Long Island, N.Y., division under new management, put some employees on administrative leave and terminated "all consulting contracts with those who represented the company before the federal government on defense-related matters."
A Unisys plant on Long Island was searched by federal agents June 14, as were the offices or homes of several Unisys employees and consultants. Unisys was formed by the $4.8 billion 1986 merger of Sperry and Burroughs.
In Alexandria, an attorney for defense consultant and former Navy official Melvyn Paisley filed motions Tuesday to quash 11 subpoenas from the grand jury and to be advised if the government conducted any illegal electronic surveillance of his client.
In all, 275 subpoenas, mostly for documents and records, were to be answered in Alexandria on Tuesday. Sharon Dibbley, spokeswoman for U.S. Attorney Henry Hudson, said the government had arranged a location, which she would not identify, where those under subpoena could deliver rec-ords without being observed by reporters.
Many of the subpoenas are to people who are only potential witnesses, not targets of the investigation.
Ms. Dibbley had no comment on the Paisley motion and knew of no objections filed to the other subpoenas.
The only recognizable figure arriving for Tuesday's session of the grand jury in the U.S. Courthouse was Jack A. Sherman, a civilian Marine Corps employee whose office was searched by federal agents June 14.
Sherman, who sources said was transferred to non-procurement duties pending the outcome of the investigation, was a supervisory contracts negotiator for the Marines' installation and logistics office. Neither Sherman nor his attorney would comment.