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Demands amounted to blackmail, general says

A retired general who briefly headed Sooner Defense of Florida Inc. said in court Wednesday that government officials made demands that "amounted to blackmail."

The company, which took government-supplied parts and produced fuzes for the Army, was preparing to file a $5.8-million claim against the federal government for lost revenues brought about by delays in shipments of needed parts, court records show.

At the same time, Sooner was seeking delivery extensions on fuze contracts, which were critical to the company's financial survival. Gen. Wallace Nutting, a retired four-star general who served as Sooner president for two weeks starting in June 1988, said the government offered to grant the extensions if Sooner dropped the suit.

Nutting, who completed a third day of cross-examination Wednesday, said company officials rejected the offer on July 14, 1988, days before the company filed for Chapter 11 bankruptcy protection.

"It appeared as if it was designed to put the company out of business," Nutting said. "And I think history bore that out."

U.S Assistant Attorney Ernest Peluso, however, argued that Sooner had had difficulty meeting earlier contract deadlines and the government's actions were warranted to ensure delivery.

Nutting, 64, is among seven former Sooner Defense of Florida Inc. officials charged in 1991 with defrauding the government of $40-million by selling shoddy ammunition and charging for costs not incurred. Their trial began in February and is expected to last well into the summer.

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