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Manufacturing Officials Charged In Federal Weapons Probe

February 27, 1986

MINNEAPOLIS (AP) _ A father and son, both former officials of a defense contractor, have been indicted in the sale of allegedly substandard parts for key military weapons.

A federal grand jury Wednesday indicted John Edward Rausch, 58, and Randall Patrick Rausch, 34, on three counts of conspiracy to defraud and four counts of making false claims against the government in connection with several defense contracts awarded to Rausch Manufacturing Co. Inc.

Rausch was the company’s president and his son was vice president. The company filed for reorganization under Chapter 11 of federal bankruptcy laws in 1983 and has since been sold and its name changed.

The seven-count indictment was part of a four-year probe into the reliability of the Phoenix missile, the first line of defense for Navy aircraft carriers, the Minneapolis Star and Tribune said.

Allegedly defective parts for the Phoenix air-to-air missile and other military equipment were found during FBI and Defense Department raids on Rausch’s plant about two years ago, the paper said.

Navy officials in Washington told the Star and Tribune on Wednesday that the problems discovered in the missiles do not represent a danger to the carrier fleet.

However, the newspaper reported that sources familiar with the investigation of the Phoenix said there is internal disagreement over whether the missile should be recalled.

Hughes Aircraft, the main contractor for the missile, said the Rausch parts hold down a crucial radar tracking antenna. If the parts were to break when a Phoenix was fired, ″the missile would have a very difficult time tracking a target,″ the newspaper quoted an unidentified Hughes spokesman as saying.

Attorney Joseph Friedberg, who is representing the Rausches, said Thursday that neither he nor they will comment on the case. The Rausches will appear in court for arraignment Friday, he said.

Rausch manufactured parts for the latest version of the Phoenix missile from 1979 to 1984, the indictment said.

An X-ray technician who randomly tested parts for the missile was instructed by the Rausches that whenever any parts picked were unsatisfactory, the technician should X-ray more parts in the batch until she found enough that were satisfactory, the indictment said.

The indictment also alleged that the Rausches instructed employees to weld parts for the Phoenix missile, in violation of government specifications for them.

Assistant U.S. Attorney Thor Anderson, who will prosecute the case, said such welding could disguise defects in a part.

The indictment also dealt with Rausch Manufacturing’s contracts to make parts for an Air Force mobile radio tower and for hardware used to secure a computer screen on the Air Force’s advanced F16 fighter plane.

The indictment alleged the Rausches directed a company employee to ship radio tower parts that had holes in critical locations. The indictment said that when the holes were pointed out to the Rausches, they told an employee, ″Move them on.″

The indictment accused Randall Rausch of helping hide parts being welded from inspectors who visited the St. Paul plant in May 1984. In addition, he is accused of instructing two employees to ship parts under an old lot number to disguise the fact that they had been found to be defective or had not been tested at all.

On the F-16 contract, John Rausch told a company employee ″to box up the parts with the bad parts on the bottom row and the good parts on the top,″ the indictment said.

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