In a major break in the snowballing Pentagon corruption case, former Uni-sys Vice President Charles Gardner pleaded guilty to bribing Assistant Navy Secretary Melvyn Paisley through the purchase of his ski resort condominium at an inflated price.
Gardner confessed Thursday to ordering company consultant James Neal, who pleaded guilty to separate criminal charges, to buy Paisley's condo in Sun Valley, Idaho, for $149,000. It later was sold for $100,000, prosecutors said.Neal pleaded guilty to funneling $400,000 in bribes on Gardner's orders to the Bahamas bank account of Navy procurement official Garland Tomlin, now retired and reportedly living in Switzerland.
In each pleading to three-count felony "informations," Gardner, who was fired by Unisys a year ago, and Neal agreed to cooperate in the massive 33-month-old probe of alleged defense industry bribes-for-insider contract information.
Sources close to the investigation said the two men were giving prosecutors additional evidence against Paisley and other industry figures. They already have helped prosecutors begin to unravel transactions involving more than $4 million in Uni-sys funds, much of which was "washed" through front companies and several offshore accounts for illegitimate purposes, the sources said.
For example, prosecutors charged in court papers Thursday that Gardner masterminded a scheme to launder illegal corporate campaign contributions to Reps. Roy Dyson, D-Md., and Bill Chappell, D-Fla. Prosecutors stressed they have "no evidence" Dyson was aware of the source of his $1,000 contribution; Chappell is no longer in Congress.
The 1986 deal for Paisley's condo was arranged by William Galvin, another defense consultant at the center of the scandal, prosecutors said.
In return for the payoff, U.S. Attorney Henry Hudson told reporters, Paisley fed Unisys inside information about pending Navy contracts for the shipboard Aegis electronic warfare system and another major contract.
Paisley, who resigned his Navy post in 1987 and became Galvin's consulting partner, said through his lawyers that he had "no knowledge that the sale of his condominium was anything other than a completely legitimate, arms-length transaction at fair market value."
Hudson, smiling outside the federal courthouse, told reporters the pleas of Gardner and Neal were "significant developments because their cooperation, we think, will move this investigation forward at a tremendous pace."
In a third agreement Thursday, Galvin's stepson pleaded guilty to a single count of tax evasion. The stepson, Kenneth Brooke, performed accounting services for Galvin and his cooperation gives prosecutors a witness from inside the accounting operation, according to law enforcement officials.
Investigators said they only learned of the alleged scheme to bribe Tomlin when Gardner and Neal began to share their knowledge with prosecutors in recent weeks while negotiating plea agreements. "Tomlin is a brand new name," said one federal law enforcement source.
Gardner was accused of meeting with Tomlin in late 1983 while the latter worked in a Navy office that awarded electronics contracts. Prosecutors alleged that during the meeting Tomlin "asked . . . for $500,000 in return for . . . his influence to help" Sperry Corp., which later merged with Burroughs Corp. to form Uni-sys, win a multimillion-dollar contract.
A law enforcement source said Tomlin specifically requested that the money be transferred to a bank account in Nassau in the name of Longwood International, a company he owned. Prosecutors accused Neal of delivering 18 payments to the account totaling $400,000 in 1983 and 1984.