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Witness: Teledyne Exec Called Consultant ‘Influence Peddler’

April 6, 1989

ALEXANDRIA, Va. (AP) _ A government contracting officer testified today that the Defense Department had received a better-than-expected price when it negotiated a $24 million contract with a California defense contractor to make hand-held radar equipment in July 1987.

The testimony of William Massie, who handled contracts for the project, came as the defense opened its case in the trial of three former executives at Teledyne Electronics of Newbury Park, Calif. All are charged with bribery, conspiracy and making false statements.

Before a parade of defense witnesses was called, U.S. District Judge Richard Williams denied defense motions to dismiss bribery and conspiracy charges against the three - Eugene Sullivan, George Kaub and Dale Schnittjer.

The government finished its case Wednesday with prosecutors attempting to persuade the jury that the three defendants knew a private consultant hired by Teledyne Electronics had paid bribes to a Navy engineer to help secure the radar equipment contract.

The defense contends the former executives were unwittingly duped by private consultants hired by the company.

Massie, the contracting officer, said the government’s objective was to allow the defense contractor a 13.74 percent rate of profit on the job. In fact, Massie said, Teledyne Electronics agreed to only a 13.5 percent rate of profit, meaning the government got a cheaper price than it had expected.

Under cross-examination, however, Massie acknowledged that that price was still “not necessarily” the best possible price.

On Wednesday, William Parkin, a consultant who has pleaded guilty to bribery and is cooperating with the government, testified that he took a portion of the money that Teledyne gave him and channeled it to another consultant, Fred Lackner. Lackner, in turn, paid bribes to Stuart Berlin, a Navy engineer familiar with the contract.

The government contends that the three defendants knew that Parkin and his consortium were bribing Berlin. The defense says the former Teledyne executives were innocent victims of a conspiracy devised by Parkin and Lackner.

Teledyne Electronics paid Parkin $10,000 in up-front money in November 1985 to help win the contract, and agreed to hand over another $150,000 in February 1988 after Teledyne won the contract.

FBI agent Michael Swinhoe testified that he had interviewed Kaub after the government’s investigation of Pentagon fraud and kickbacks was made public in June 1988.

According to the agent, Kaub said he was “not aware of any illegal or unethical behavior” on Parkin’s part.

But Kaub said he was skeptical of the consultant “by virtue of Mr. Parkin’s profession as an influence peddler.”

Kaub, who was Teledyne’s vice president dealing with government contracts, said the “nature of the environment” in which Parkin worked was also cause for some concern.

On the witness stand, Parkin admitted that he had taken about $50,000 in bribes over a 10-year period while he was employed by the Defense Department. Parkin left the Navy, where he had been director of acquisitions for the Joint Cruise Missile Project, in October 1983.

The trial in federal court is the first brought by the government in its investigation of the $150 billion purchasing system at the Defense Department.

Except for the three executives, all the people named in the indictment, including Parking, Lackner and Berlin, have pleaded guilty, as has Teledyne.

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