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Retired Colonel Pleads Guilty To Distributing Classified Documents

March 12, 1990

ALEXANDRIA, Va. (AP) _ A retired Air Force lieutenant colonel pleaded guilty Monday to a felony conspiracy charge that, as a Grumman Corp. employee, he unlawfully obtained and distributed classified Pentagon budget documents.

As part of the plea bargain, Harry Kotellos agreed to cooperate fully with the government investigation into the illegal trafficking in classified Defense Department documents.

Kotellos, 53, is a West Point graduate and retired Air Force lieutenant colonel who has worked for Grumman since 1980, said his attorney, Plato Cacheris.

He faces a maximum penalty of $250,000 in fines and five years imprisonment when he is sentenced May 18 for his actions from 1980 through 1985.

The documents involved were those that summarize the resources the Pentagon is planning to spend in future years, said Richard Smith, assistant special agent in charge of the Defense Criminal Investigative Service’s Washington field office. The case also involved Air Force budget documents, according to court papers.

″Mr. Kotellos was a significant player in the tightly knit group which acquired and distributed some very sensitive DoD information,″ said Michael J. Costello, special agent in charge of the DCIS Washington field office. ″We have attempted to reach the inner core of the network and neutralize it.″

Investigators would not say whether Grumman itself was under investigation.

But Grumman spokesman Larry Hamilton said: ″Grumman is engaged in discussions with the government as to the consequences to the company of Mr. Kotellos’ plea. Since this matter continues to be under review, the company cannot comment on these discussions.″

The DCIS field office has been conducting an investigation - code-named Operation Uncover- since the mid-1980s into illegal transfers of Pentagon documents to defense contractors.

Last Friday, Hughes Aircraft Co. became the fourth major defense contractor to plead guilty to unlawfully obtaining Defense Department budget documents, and agreed to pay a total of $3.67 million in fines and restitution.

Previous companies to plead guilty are:

-GTE Government Systems Division, which paid about $300,000 in fines in 1985.

-The Boeing Company, which paid fines and restitution of $5.2 million last November. Boeing employee Richard Lee Fowler was convicted last December of all counts of a 39-count indictment.

-RCA Corp., which was ordered Feb. 5 to pay fines and restitution of $2.75 million. Former RCA employee Leonard Kampf and current RCA employee Ronald Stevens each pleaded guilty to one felony count and face sentencing April 6.

The plea agreement submitted Monday to U.S. District Judge Claude Hilton is contingent on Kotellos’ cooperation in the probe.

The conspiracy count says Kotellos acquired classified documents from a government employee who was not authorized to release them, getting classified documents from Fowler of Boeing, sharing classified documents with other defense contractors and obtaining such documents from them, and destroying some of the documents in his fireplace at home.

The government employee was not identified in court papers, and Smith declined to reveal the name or to say whether that person was under investigation.

The source close to the investigation said he believed prosecutors ″may have a problem with the statute of limitations″ in the case against the government employee because of a lack of information of wrongdoing after 1984.

The court papers say Kotellos got documents from the government employee ″on approximately two occasions between 1980 and December 1984.″

Said Smith: ″In a continuing conspiracy, the last overt act that an individual or corporation does in furtherance of that conspiracy can continue the life of the statute of limitations.″

The 1985 actions enabled prosecutors to go after Kotellos, Smith said.

Kotellos was placed on administrative leave with pay from his job as a senior marketing analyst at the Washington operations office on Monday morning, said Grumman spokesman Larry Hamilton.

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