With the wrap-up of the John E. Ward defense contract scandal Friday, U.S. Attorney Dee V. Benson announced the formation of a permanent task force on defense and aerospace corruption.
Ward was the purchasing officer for Morton Thiokol but resigned to form his own supply company. After that point, he was involved in kickback schemes, which came to light when he and 16 other individuals and companies were indicted by a federal grand jury on Oct. 15, 1987.Later, four others were charged.
U.S. District Judge David Sam sentenced Ward to concurrent terms of one year and one day on each of two counts. Sam cited Ward's cooperation with investigators after the scheme came to light.
"I would say that the majority of the other defendants" also cooperated, said Assistant U.S. Attorney Gregory Diamond. Ward's sentence was the stiffest given in the scandal.
During a press conference in his office, Benson said that as of Friday morning, all those charged have pleaded guilty and been sentenced.
The joint investigative team that looked into the original allegations against Ward and the others had evolved into a permanent task force, he said. Members include the FBI, Defense Criminal Investigative Service, Internal Revenue Service, Defense Audit Agency, and the U.S. attorney's office.
"The purpose of the task force is to maintain the integrity of the defense industry, which plays such an important role in the economy of the state of Utah," he added.
"We want to expose and prosecute anyone who endangers this important industry and this country by attempting to profit illegally from the defense-aerospace contracting system."
He vowed the team would do its best to discover and prosecute "kickbacks, payoffs and bribes."
As part of that drive, he announced the establishment of an anti-kickback, anti-fraud hotline. The public can call 355-2600 (phone collect, if necessary) at any time to report any suspicious actions.
A notice to be posted in offices of defense and aerospace suppliers says, "If you have information that may be beneficial, and desire to remain anonymous, you may do so."
A new act provides that with defense or aerospace contracts of more than $1 million, a whistle-blower could win a reward of up to $250,000. One official said Utah has five major aerospace and defense contractors like Hercules and Thiokol, plus an estimated 68 smaller companies supplying goods to the industry.
"In 1987, the federal government put $1.2 billion in the state of Utah in defense contracts, so that's a major portion of this state's economy," Bryant said.
Benson said investigators think quite a bit of fraud is occurring, and to keep Utah competitive in the industry, "we need to nip it in the bud."
Employees need to know they can't accept free lunches, trips to Cancun, or cash under the table, he said.