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Pratt & Whitney to pay $14.8 million to settle Israeli slush fund case

May 21, 1997

WASHINGTON (AP) _ The Pratt & Whitney Group of United Technologies Corp. has agreed to pay $14.8 million for allegedly scheming to divert $10 million in U.S. military aid to a slush fund controlled by an Israeli Air Force officer.

The settlement announced Tuesday by the Justice Department resolves a claim filed by the United States against United Technologies. The government has already recovered $2 million in funds related to the scheme, the department said.

The claim alleged that United Technologies and former Israeli Air Force officer Rami Dotan set up a $10 million fund with U.S. military aid that could be spent at Dotan’s discretion, without the required oversight of the Defense Security Assistance Agency or procurement authorities within Israel.

Dotan was sentenced to 13 years imprisonment by an Israeli military court in 1991 for his role in related schemes.

Assistant Attorney General Frank Hunger praised the Israeli Defense Ministry and national police for helping investigate the case.

The complaint alleged that United Technologies acquired the $10 million in funds for Dotan through false billings under a contract with Israel to develop and manufacture a PW1120 turbojet engine for an Israeli LAVI fighter plane.

United Technologies allegedly prepared false purchase orders and submitted false invoices to Israel between March and July 1987 to collect $10 million for engine improvement work the U.S. government said was never performed. The government said the company and Dotan concealed their deal to use this money as a ``bank″ for Dotan.

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