The Navy has suspended contracting any government work with three divisions of Unisys Corp., including the Communications Systems Division in Salt Lake City.
The suspension was based on "adequate evidence of widespread improper activities" at Shipboard and Ground Systems Division, a statement from the Navy said.But the Navy said it has "reason to suspect related misconduct may have occurred at the other two Unisys divisions" in connection with the Justice Department's "Ill Wind" investigation of Pentagon procurement corruption.
"The misconduct involves expense account abuses, improper use of consultants for lobbying purposes, improper corporate campaign contributions and bribery of government officials."
Both Unisys and Navy spokesmen said they knew of no specific instances of wrongdoing occurring at the Salt Lake division.
"That division is involved in the suspension because it uses consultants," Unisys spokesman Peter Hynes said. "An investigation . . . indicated (some) consultants were not doing what they were being paid to do and the moneys they were being paid allegedly could have gone into lobbying and political contributions."
The Salt Lake operation employs 1,700 in designing and manufacturing communication systems for commercial and defense uses.
Hynes said the suspension will have no effect on current defense contracts or employment at Unisys. He explained the suspension as a measure allowing the Navy to investigate whether Unisys has implemented in-house procedures that will stop the illegal conduct.
The suspension came after Charles Gardner, fired last year as vice president of Unisys, and Robert Barrett pleaded guilty March 9 to bribing former Assistant Navy Secretary Melvyn Paisley and illegally funneling money to campaigns of influential congressmen to try to win lucrative defense contracts.
Gardner was general manager of the Unisys division in Great Neck, N.Y.
Federal court papers in Alexandria, Va., outlined an elaborate, seven-year effort headed by Gardner to funnel more than $5 million in Unisys money into bribes, illegal campaign contributions and Gardner's personal use.
Gardner, 58, also pleaded guilty to laundering $1,000 in corporate funds into the campaigns of both Rep. Roy Dyson, D-Md., and former Rep. Bill Chappell, D-Fla. Investigators said there was no indication that Dyson or Chappell knew the donations were illegal.
Gardner and Barrett have agreed to cooperate with federal authorities.
The Navy recognized Unisys' cooperation and the company's "vigorous and far-reaching action" to remove those guilty of misconduct and implement a program to avoid future problems.
But it ordered the suspensions "to protect the government's interests," the Navy statement said.
Before the suspension is lifted, the Navy said, it still needs evidence that the new policies are being followed and that Unisys will conduct further internal audits to be sure similar illegal conduct isn't going on elsewhere in the company.
Unisys issued a statement from its headquarters in Blue Bell, Pa., saying that it regretted the suspension but had advised the Navy it will cooperate fully in hopes that the suspension will be lifted.
"I believe we've taken all corrective remedial steps," Hynes added. "We have removed people and have disciplined others. And the Navy is saying they want to verify that the procedures we have in place are indeed being followed."