FBI affidavits laying out the most detailed blueprint yet of the government's Pentagon bribery investigation disclose how agents eavesdropped as one consultant passed along insider information on nine Navy contracts worth more than $522 million.
On Sept. 30, 1987, FBI agents secretly listened in as George Stone, a Navy procurement official, read private defense consultant Mark C. Saunders the sealed bids from 10 companies competing for a $120 million air control contract, according to court documents unsealed Thursday.Two search warrant affidavits unsealed in Dallas show how the FBI began its investigation in September 1986, placed telephone wiretaps and office eavesdropping devices on nine consultants, and traced the flow of insider information on nine contracts.
The documents gave a glimpse of the amounts of money allegedly paid by defense contractors for such data and of purported efforts to launder such payments. For the first time, the FBI disclosed some of the exact words it overheard on its listening devices.
"If you can get anything, we . . . can make some money," the documents quoted consultant Thomas Muldoon as telling Saunders in a conversation monitored by the FBI. The FBI said Saunders usually passed his information on to Muldoon and they split fees from defense contracting companies.
The documents indicate that Saunders and Muldoon split evenly $8,000 a month from Litton, a major defense contractor, which was just one of at least three companies they worked for jointly.
A 27-page affidavit by FBI agent Joanne T. Burns described the evidence to support a search of Saunders' office-at-home in suburban Virginia.
Saunders is a former Navy procurement officer convicted of and fired for stock trading on insider Navy information in 1982. The FBI said Saunders was receiving inside contract data from Stone, his Navy successor, and it "believes that Saunders is paying Stone for this information."
Stone is one of six Pentagon officials transferred to other duties after their offices were searched. A phone call to a number the FBI listed as the one at which Saunders reached Stone was not answered Thursday night.
Another affidavit by FBI agent James B. Lamb spelled out the grounds for searching the offices of Varian Continental Electronics of Dallas, one of the companies with which Saunders dealt.
The FBI said, "There is probable cause to believe that all of Saunders' business records, dated June 1982 to present, ... constitute evidence of the criminal activities of Mark C. Saunders."
The documents detailed not only the flow of inside contract information but also alleged that Saunders, under government subcontract to devise a plan for the Navy to buy radios, conspired with Joe Bradley, vice president for marketing of Varian Continental Electronics, to rig the purchase requirements so Varian could beat other companies in the bidding.