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Hughes Aircraft Pleads Guilty to Unlawfully Obtaining Pentagon Documents

March 9, 1990

ALEXANDRIA, Va. (AP) _ Hughes Aircraft Co. today pleaded guilty to two felony counts of unlawfully obtaining classified Pentagon budget documents, and agreed to pay more than $3.55 million to settle the case.

Hughes is the fourth major defense contractor to plead guilty through a plea bargain to similar charges under an investigation begun in the mid-1980s by the Defense Criminal Investigative Service, the investigative arm of the Defense Inspector General.

The two counts concern five-year defense program documents issued in 1983 and 1984 summarizing resources planned, programmed and budgeted by the Department of Defense, according to a statement by Susan J. Crawford, the Pentagon’s inspector general.

The documents were classified secret and they were not releasable to Defense Department contractors, the statement said.

Hughes, through one of its employees, unlawfully acquired these and other classified Pentagon documents from employees of other defense contractors between 1978 and 1985, according to the statement.

The company tried to hide the fact that it had the documents, the statement said. Before 1978, Hughes did not enter the documents into its classified document accountability system. From 1978 through 1985, the documents ″were logged into the system but not under their actual titles in an attempt to hide their receipt,″ the statement said.

Hughes agreed to pay $3.55 million in settlement of any civil liability which may arise out of its actions, plus $50,000 for investigative costs, $50,000 from its overhead account, and a total of $20,000 in penalties stemming from the actual charges. Each charge carries a maximum penalty of $10,000.

Under the plea agreement, entered before U.S. District Judge James C. Cacheris, Hughes will make the payment within five days, according to Michael J. Costello, special agent in charge of the DCIS Washington Field Office, which conducted Operation Uncover.

Asked whether Hughes made money because of the documents, Costello said, ″We are not in a position at this time to say that. We would have to make an assumption that they did make money. That’s the reason for the $3.5 million settlement.″

Negotiations with Hughes had been under way for several months, he said.

The three other major defense contractors that previously pleaded guilty to similar charges, said Costello, are GTE Government Systems Division, which paid about $300,000; The Boeing Company, which paid $5.2 million; and RCA Corp., which paid $2.5 million.

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