Justice Department Dropping Northrop Bribery Case
LOS ANGELES (AP) _ The government is dropping its 5-year-old probe of allegations that Northrop Corp. bribed South Korean officials in an effort to sell its F-20 fighter jets, the Los Angeles Times reported today.
No charges will be filed apparently against the Los Angeles-based defense contractor or several executives who lost their jobs in the scandal, the newspaper said.
Unidentified attorneys told the newspaper that the Justice Department’s case was weak because it relied on unreliable witnesses, mainly foreigners.
The scandal involved Northrop’s 1984 payment of $6.25 million, ostensibly to build a luxury hotel in Seoul. The money was wired to a Hong Kong bank controlled by a girlfriend of the late Chong Kyu Park, a South Korean power broker, and vanished a few days later.
Northrop called the hotel deal a goodwill gesture, but allegations arose that the payments were bribes to help Park sell Northrop’s F-20 jets to the South Korean air force.
No F-20s were ever sold, either abroad or in the United States, and Northrop canceled the program after two of the planes crashed on demonstration fights.
Welko Gesich, who was forced to retire as Northrop executive vice president in 1989, was notified last week that he no longer is under investigation, the newspaper said.
And James Dorsey, Northrop marketing vice president for Korea, recently was given back personal documents that were subpoenaed in the 1980s, said Daniel Bookin, his attorney.
″Our understanding is that the investigation is closed,″ Bookin said.
In 1991, four Northrop insurers agreed to pay $18 million to settle a shareholder lawsuit that alleged misconduct and unlawful business practices by Northrop executives and directors.