Defense Says Consultant Hid Inside Dealings
Apr. 04, 1989
ALEXANDRIA, Va. (AP) _ A retired Teledyne Electronics Inc. executive testified today that he hired a Washington lobbyist on the recommendation of Navy engineer Stuart Berlin.
William Rosen, former vice president for marketing, testified that Berlin, a Navy engineer who has pleaded guilty in the Pentagon procurement scandal, recommended that he hire Michael Savaides as a Washington lobbyist for the California-based aerospace company.
Rosen said he was told by Berlin that Savaides was ''employed by a company engaged in manufacturing and selling similar equipment.''
''You felt he knew his way around the Navy?'' asked prosecutor Jack Hanly, and Rosen said yes.
Berlin, who is expected to testify later, is cooperating with the government investigation of the Pentagon procurement scandal, which involved the payment of bribes and kickbacks to military procurement officials and outside Pentagon consultants to obtain procurement information and influence the award of lucrative contracts.
Rosen, testifying under an immunity grant at the bribery and conspiracy trial of three Teledyne executives in U.S. District Court, also told how he was angered when told that Washington defense consultant William L. Parkin was working, without his knowledge, to help Teledyne obtain a Navy contract.
''You might say I became angry,'' Rosen testified, recalling that he went to see Eugene R. Sullivan, one of the defendants, and ''expressed my outrage over meddling in my department.''
Rosen said he learned that Parkin was working for Teledyne from Fred H. Lackner, another defense consultant who, like Parkin, has pleaded guilty and is expected to testify as a prosecution witness in the case.
Recalling the events of the fall of 1985, Rosen said that Sullivan initially told him he was ''not prepared to discuss it. The only thing he said was he did not engage a consultant.''
Sullivan and two other Teledyne executives are defendants in the first trial of the Justice Department ''Ill Wind'' investigation into Pentagon procurement fraud.
Prosecutors are trying to prove that the three conspired to bribe a public official for information that helped their company win a $24 million contract.
The three defendants - Sullivan, George Kaub, Dale Schnittjer - were executives with Teledyne Electronics of Newbury Park, Calif., a division of Teledyne Industries. Lawyers for the men, who are charged with bribery, conspiracy and making false statements, say their clients have done nothing wrong.
''This is a case about bribing, about cheating, about lying,'' charged Assistant U.S. Attorney Robert DeHenzel Jr. in his opening arguments Monday.
The three are accused of conspiring to bribe a Navy official to influence the award of a hand-held radar testing device for the Navy.
Rosen testified, he met Parkin at a meeting in Sullivan's office that was also attended by Kaub. The meeting was held to discuss hiring Parkin to help Teledyne get the contract, Rosen said.
Parkin told the Teledyne officials ''he knew his way around the Navy, that he could do a job for us.''
Rosen said that Parkin wanted a written agreement which he described as ink on paper to formalize his consulting relationship with Teledyne. In return ''he would take measures to assure the contract would be awarded to Teledyne Electronics.''
The agreement called for Parkin to receive $10,000 in advance for expenses and $150,000 as a reward once Teledyne obtained the contract.
Rosen said he later expressed misgivings to Sullivan about the agreement with Parkin. Recalling a conversation on a golf course, Rosen said he told Sullivan, ''I think we were being foolish. I thought we were being ripped off.''
Asked how Sullivan replied, Rosen said, ''He said I was just as involved as everybody else.''
At Monday's opening day of the trial the first witness was Charles Jones, an Air Force contracting officer.
On the witness stand, Jones discussed the 25-month process that led to the Pentagon's decision in July 1987 to sign with Teledyne Electronics a contract to make hand-held radar test equipment.
DeHenzel argued the three defendants were part of a conspiracy that included bribing Berlin to receive inside information crucial to winning the contract.
He said Berlin provided information about another competitor that should have been kept secret.
''A lot of information should not have been given to anyone outside government,'' he said.
Berlin also spoke during internal Pentagon discussions in favor of a position that benefited Teledyne, he said. Specifically, the former Navy official opposed limiting the contract to small businesses, a decision that would have excluded Teledyne from bidding. That decision was ultimately reversed.
Teledyne Industries, Parkin, Lackner and Berlin were all named in the indictment returned by a grand jury in January. They pleaded guilty and are cooperating with the government. Savaides also pleaded guilty, but he was not indicted.
The defendants' lawyers said their clients never knew about a secret deal that Parkin made with his associates. Kaub, Sullivan and Schnittjer believed Parkin used legitimate methods to obtain information about contracts, a time- honored practice, they said.
''The conspiracy in this case was directed as much as concealing from Teledyne as defrauding the government,'' said George O'Connell, Sullivan's lawyer.
Mark Tuohey, Kaub's attorney, described the deal between Parkin and his associates as a ''conspiracy of silence.''
Kaub was Teledyne Electronics' executive vice president dealing with government contracts. Sullivan and his successor, Schnittjer, were also executive vice presidents.
As part of the evidence, prosecutors have said they will play tapes from conversations between Parkin and his associates. The government taped the telephone calls as part of their investigation.
The coast-to-coast investigation into the Pentagon's $150-billion-a-year purchasing system began nearly three years, but it was not publicly revealed until June 1988.