Prosecutors say the investigation of Pentagon corruption, which yielded its first indictments more than six months after becoming public, is just getting started.
None of the indictments issued in U.S. District Court Friday involves high-ranking present or former military officials, but U.S. Attorney Henry Hudson said the continuing inquiry promises to be a protracted affair.One defense contractor, a Navy employee and five other men were indicted on charges that included conspiracy and bribery, while another corporation pleaded guilty to conspiracy to defraud the government.
"I think over the next few months, perhaps the next year, you'll see a great deal of additional activity," Hudson said Friday, adding that the initial round of indictments represented a "small percentage" of the case.
"It's a significant investigation and my assessment of its dimensions hasn't changed in the last six or seven months," he said. Prosecutors have subpoenaed more than 1 million documents and spent "many, many hours" before the grand jury, he said.
The big-rigging investigation hinges on allegations that private consultants, hired by defense contracting firms, paid bribes to government employees for inside information that gave them an advantage in securing multimillion-dollar contracts.
Hudson, who had once promised indictments in late fall, said he is satisfied with the pace of the complex case.
"I think if you'll compare this to others of its type . . . this investigation is almost unprecedently quick," he said.
Six months ago, President Reagan, declaring he was "very upset" about the reports of corruption in the Pentagon's $150 billion-a-year purchasing system, told law enforcement agents to move "as rapidly as possible" to get the facts on the case, said his spokesman, Marlin Fitzwater.
And President-elect George Bush said the allegations, if correct, showed people "stealing from our national defense and undermining our national security."
Although the investigation had been under way since September 1986, it was not made public until mid-June when the FBI issued search warrants at 38 locations and 12 states. Investigators used court-ordered wiretaps to gather much of their information.
At least 20 defense contractors are under investigation, as well as six Pentagon officials and a number of consultants, among them Melvyn Paisley, former assistant secretary of the Navy for research, engineering and systems.
Hudson has said no congressmen were targets of the investigation, although Rep. Roy Dyson, D-Md., and former Rep. William Chappell, D-Fla., were once described as being under scrutiny. No search warrants or subpoenas were issued to members of Congress or their staffs.
Shortly after the investigation was revealed, Defense Secretary Frank Carlucci reassigned the six Pentagon officials under scrutiny. Then, based on information he received from court papers, he suspended payment on $1 billion worth of potentially tainted military contracts.
The investigation has prompted calls in Congress to overhaul and procurement system at the Pentagon, which lets contracts worth $620 million daily.
The first indictment named Teledyne Electronics of Newbury Park, Calif., a division of Teledyne Industries, three of its employees, two private consultants and a Navy procurement specialist. They will be arraigned Friday in U.S. District Court. Teledyne could be fined up to $6.5 million if convicted.
At the heart of the indictment are charges that Teledyne and its officers agreed to pay consultant William Parkin $160,000 to assist them in obtaining a Navy contract worth $100 million.
Parkin paid Fred Lackner, a California-based private consultant, who gave money to Stuart E. Berlin, a Navy procurement official, for his assistance in manipulating the procurement process, the indictment says.
If convicted of all charges, Berlin, Parkin and Lackner could face maximum penalties of 185 years in prison and fines of $5.5 million each, Hudson said.
At the same time, Hazeltine Corp., of Greenlawn, N.Y., a division of Emerson Electric Co., pleaded guilty among other things to conspiracy to defraud the government in its efforts to obtain a contract for radar testing devices.
Hazeltine, which is cooperating with the government, agreed to pay fines and court costs of just under $2 million, a fee Hudson said he believed was "appropriate."
Two former Hazeltine employees and a Teledyne Electonics employee also pleaded guilty to lesser charges. They, too, are cooperating with the government.
The Pentagon said it is reviewing the guilty pleas and the indictments to see what action should be taken.