DC Says
NO to Northrop Grumman & Corporate Welfare
and Wins!
April 21st, 2010, Washington DC—A DC coalition
of small businesses, watchdog groups and peace
activists quashed a $25 million DC City Council
proposal to entice defense contractor Northrop
Grumman to the nation's capitol.
Earlier this year, a major
struggle was brewing in the nation's capitol about
the city's proposal to offer$25 million in subsidies
and grants to the mammoth defense contractor Northrop
Grumman. The legislation was originally
sponsored by seven of the City Council's 13 members
and supported by Mayor Adrian Fenty.
The taxpayer giveaway
incensed small businesses, watchdog groups and
peace activists, who formed a new coalition called
CENTS—Coalition to End Needless Tax Subsidies.
They met with the mayor and council members, testifying
at hearings, holding press conferences and educating
the public. Our message was clear: This community
is not for sale. One by one, council members began
to reconsider their position. At
an April 18 gathering for DC Emancipation Day,
City Council Chair Vincent Gray told organizers
that the “proposal is dead.”
“This is a victory for the people against
a corporate behemoth,” said CODEPINK cofounder
Medea Benjamin, who was one of the main organizers.
CODEPINK had generated over 1,000 emails or calls
to each Council member supporting the bill. “Working
together in coalition, we proved that we can stop
corporate giveaways. Northrop Grumman should be
free to move its headquarters wherever it wants,
but not at taxpayer expense.”
Northrop Grumman was the third largest Federal
contractor in 2009 with over $17 billion in
mostly defense and aerospace contracts. (usaspending.gov)
Since 1995, the company has accrued over $820
million in fines, according to the Project on
Government Oversight (www.contractormisconduct.org)
The Company's Long History of Fraud,
Overcharges, etc. Includes:
In 2009, Northrop Grumman and TRW agreed to
pay $325 million to settle allegations that
the company improperly billed the National Reconnaissance
Office (NRO) for defective microelectronic parts.
In 2008, Northrop Grumman agreed to pay $400,000
to settle alleged violations of Export Administration
Regulations that occurred from 1998 to 2002.
In 2008 Northrop Grumman agreed to pay $15
million to settle alleged violations of the
Arms Export Control Act (AECA) and the International
Traffic in Arms Regulations (ITAR) for the sale
of modified LTN-72 and LTN-92 aircraft navigation
systems between 1994 and 2003.
In 2009, the Virginia Joint Legislative Audit
and Review Commission (JLARC) reported problems
with a $2 billion IT contract, including cost
overruns, missed deadlines and network and computer
outages at state offices.
In 2007, Northrop Grumman agreed to pay $8
million to settle charges it failed to test
tubes used in night vision goggles and sniper
scopes used by U.S. troops in Afghanistan and
Iraq.
In 2007 Northrop Grumman paid $60 million
to settle accusations that the company used
automated fingerprint technology without permission.
In 2005, Northrop paid $ 62 million to settle
charges of fraud originally filed by company
whistleblowers who said Northrop “routinely
submitting false contract proposals,” “concealed
basic problems in its handling of inventory,
scrap and attrition,” and “lied to the government
during a ‘Critical Design Review'” for a B-2
Bomber radar jamming device. (Robinson v. Northrop
Grumman)
In 2003, the company paid $60 million to settle
allegations that Newport News Shipbuilding mischarged
costs for double hulled tankers it was building
for commercial customers.
In 2003, Northrop-Grumman paid $111.2 million
to settle claims that TRW overcharged the government
in association with its attempt to enter the
space launch vehicle business. (Bagley v. TRW).
According to the GAO, in 1996 Northrop's Hawthorne
Division paid $1.5 million to the government
to settle a matter involving “defective pricing.”
In 2004 Northrop agreed to pay $81 million
to settle allegations of fraud associated with
cost overruns on an engine exhaust liner.
In 1999, Northrop Grumman paid $500,00 to
settle allegations that it “falsely certified
inspection checklists for military and civilian
aircraft.” (DoD IG)
In 1997, Northrop Grumman agreed to pay $34.8
million to settle civil charges filed by the
Air Force for overbilling the government on
a B-2 bomber contract.
In 2003, the Canadian Transportation Agency
suspended the company's charter license due
to an invalid certificate of insurance.
In 2003, Northrop Grumman paid $20 million
as restitution for knowingly installed substandard
parts in defective target drones designed for
the Navy.
In 1999, Northrop Grumman paid $145,250 to
the government to settle a matter involving
"cost/labor mischarging."
In 1998, Ingalls Shipbuilding (Northrop Grumman)
paid the Navy $2.25 million to settle allegations
of accounting fraud and “improper billing for
work not performed.”
In 2000, Northrop Grumman paid $750,000 “to
settle claims arising from its failure to properly
manufacture more than 5,000 replacement parts
it made for use on military aircraft.”
In April, 1996, Northrop Grumman paid $100,000
to settle charges of “procurement fraud.” According
to the GAO, Northrop's Aircraft Division paid
$4,000,000 to settle “procurement fraud"
charges less than a year earlier.
Environmental, Labor and Safety Violations
In 2003, Northrop Grumman Ship Systems paid
$9,100 and “agreed to bring its Hazardous Waste
Permit into full compliance regarding proper
storage, labeling and handling of hazardous
waste related to the [company's] facility located
in Pascagoula.”
In 2009, Northrop Grumman Space & Mission
Systems agreed to spend $21 million to clean
up contaminated groundwater at the San Gabriel
Valley, CA Superfund Site, and reimburse over
half a million in previous cleanup costs to
EPA and the California Department of Toxic Substances
Control.
In 2008, Northrop Grumman paid $5,000 for
violating federal safety standards when an employee
died after falling of an aircraft carrier at
its Newport News shipyard, while working on
its ventilation system without a body harness.
In 2003, Northrop Grumman agreed to pay $47,000
up front to California EPA (with costs up to
$768,317) to address a hazardous waste release.
In 2002, Northrop Grumman paid $131,000 for
33 serious safety violations after a welder
was crushed between two ship modules at the
company's Gulfport facility.
In 2003, Northrop's Space Technology facility
in Redondo Beach, CA paid $15,000 to settle
64 alleged air permit violations. (SCAQMD)
In 2001, Northrop Grumman paid $2.15 million
in backpay to 61 employees who filed unfair
labor practices charges with the NLRB.
Political Influence-Peddling
Northrop Grumman is no stranger to the shadier
side of Washington deal-making. In the early
1970s, Northrop Corp. chairman Thomas Jones
was embroiled in controversies over illegal
campaign contributions to Richard Nixon's reelection
campaign, while allegations surfaced that some
$30 million in bribes had been paid to foreign
governments to win orders for fighter jets.
A few years later, reporters revealed that company
executives regularly entertained Pentagon officials
and members of Congress at a hunting lodge on
the eastern shore of Maryland.
Compiled by:
Charlie Cray, Center for Corporate Policy, ccray@corporatepolicy.org
Sources: Notable Corporate Chronologies (Gale
Group); U.S. Department of Justice;
Project on Government Oversight Contractor Misconduct
Database; Crocodyl.org.
