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ITT in Big Trouble  

2007-03-28 09:11:01|  分类: 默认分类 |  标签: |举报 |字号 订阅

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ITT fined $100 million forillegal exports to China

Company admits sending classifiednight-vision gear without license



ITT工业公司生产的AN/PVS-14单目夜视镜

ROANOKE, Va. -ITT Corp. has agreed to pay a $100 million penalty for illegallysending classified night-vision technology used in militaryoperations to China and other countries, U.S. Attorney JohnBrownlee announced Tuesday.

ITT, the leadingmanufacturer of night-vision equipment for U.S. armed forces, willplead guilty in U.S. District Court on Wednesday to two felonycharges, Brownlee said at a news conference. One count is export ofdefense articles without a license and the other is omission ofstatements of material facts in arms exports reports.

“The criminalactions of this corporation had threatened to turn on the lights onthe modern battlefield for our enemies and expose American soldiersto great harm,” Brownlee said.

ITTdefense-related technical data was given to contractors in China,Singapore and the United Kingdom in order to cut costs, governmentinvestigators said.

“Placing profitsahead of the security of our nation is simply not acceptable forany corporation,” Homeland Security Assistant Secretary JulieMyers said in a statement.

ITT, whichBrownlee said is the U.S. military’s 12th largest systemssupplier, is the first major defense contractor convicted of acriminal violation under the Arms Export Control Act that aBrownlee spokesman said was passed in 1976.

ITT chiefexecutive Steven Loranger noted that the case related to theactions of a few individuals in one of 15 business units, but saidthe company “regrets very much that these serious violationsoccurred.”

“I want toreinforce, however, that the heart of our night vision goggles —the tube — is secure,” he said. “No information regarding thetube was ever compromised.”

According to theprosecutor, ITT agreed to pay a $2 million criminal fine, forfeit$28 million in illegal proceeds to the U.S. government and pay $20million to the State Department.

“ITT will pay$50 million in restitution to the victims of their crimes — theAmerican soldier,” Brownlee said.

The fine will besuspended for five years and the White Plains, N.Y.-based companycan reduce it dollar-for-dollar by investing in the development andproduction of more advanced night-vision technology so the U.S.military maintains battlefield advantage.

The governmentwill maintain the rights to any technologies ITT develops and canshare them with rival defense firms bidding on future contracts,Brownlee said.

No individualshave been charged, but Brownlee said the investigation wascontinuing.

“The size of thepenalty shows how severely the government regards any sale ofsensitive military technology to a potential adversary,” saidLoren Thompson, a defense analyst at the Lexington Institute inArlington, Va. “Night-vision goggles greatly enhance thecapability of military forces to operate around the clock, whichdifferentiates our force from that of most adversaries.”

A criminalinvestigation began in August 2001 when special agents from theDefense Department’s Criminal Investigative Service found that ITThad illegally sent a classified U.S. military document aboutnight-vision technology to foreign nationals in the UnitedKingdom.

Officials fromDCIS, the Bureau of Immigration and Customs Enforcement andDepartment of Justice later uncovered numerous export lawviolations, such as ITT allowing a Singapore engineer to work withits engineers at the company’s Night Vision manufacturingoperation in Roanoke County, and two Chinese optical engineersworking on the design of the enhanced night-vision goggle system inSingapore.

Government agentssaid managers viewed U.S. export laws “as obstacles to gettingbusiness done,” Brownlee said.

Prosecutors alsosaid that between April 2000 and October 2004, ITT omitted materialfacts in required arms exports reports that made themmisleading.

As part of theagreement, the company is subject to independent monitoring and anextensive remedial action program, Brownlee said.

In a relatedaction, ITT said the State Department had placed restrictions oncertain exports of night vision equipment and technical data, andITT Night Vision will face shipping restrictions for at least ayear.

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ITT and itscorporate attorneys fought the government’s investigation forthree years, attempting to “run out the clock on the statute oflimitations” after law enforcement officials executed a searchwarrant in October 2002 at the Roanoke operation, Brownleesaid.

But when thegovernment informed ITT it would seek an indictment in the fall of2005, Loranger, then new in his post, hired new attorneys and fullycooperated with the investigation.

The globaleconomy has made compliance with U.S. export laws more difficultfor companies, said Jim Wilson, a JPMorgan Chase Vastera vicepresident.

“They have tounderstand their entire supply chain,” he said. “That’s a lot oftraining and ongoing education because the rules aren’tstable.”

Shares of ITT,which makes products ranging from wastewater handling systems toelectronic warfare technologies for military aircraft, endedTuesday down 31 cents to $60.89 on the New York Stock Exchange.

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