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10 Japanese Firms Agree to Pay $2.7 Million in Bid-Rigging Case

February 24, 1992

WASHINGTON (AP) _ Ten Japanese electronics companies have agreed to pay the U.S. government $2.7 million to settle claims they rigged bids on telecommunications contracts, the Justice Department said Monday.

The settlement with the 10 firms comes 10 months after NEC Information Technologies Ltd., or NECIT, paid the government $34 million to settle similar bid-rigging claims.

The companies in the settlement are members of the so-called Kabuto Kai, which the Justice Department said rigged bids on $103 million worth of telecommunications contracts for the U.S. Air Force at the Yokota Air Base near Tokyo.

The bid-rigging scheme was uncovered by Air Force investigators after contracting officials noticed a suspicious pattern of bids submitted by the Japanese companies.

Assistant Attorney General Stuart M. Gerson said the Justice Department’s Civil Division would continue to seek repayment from foreign contractors when bid-rigging is found.

″The result in this case should send a strong signal to Japanese contractors as well as to companies of other nations engaged in projects funded by the United States that bid-rigging and price-fixing will not be tolerated,″ Gerson said in a statement.

Only two firms, NECIT and Daimei Denwa Kogyo, received contracts to operate and maintain the telecommunications equipment, the department said. The other companies submitted high bids to ensure that NECIT would win most of the contracts, the department said.

Besides Daimei Denwa Kogyo, the other firms involved in Monday’s settlement were: Nippon Comsys Corp., Toyo Denki Tsushin Kogyo Co., Sanwa-Daiei Electric Construction Co., J-Cos Corp., Shinko Tsushin Kensetsu, Ikeno Tsuken Co., Daiwa Tsushin Kensetsu Co., Daiko Denshi Tshushin Co. and Fujitsu Business Systems Ltd.

Kyowa Densetsu Kaisha is contesting a penalty imposed by the Japan Fair Trade Commission resulting from its participation in the scheme, the Justice Department said.

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