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Suit says Lockheed defrauded U.S., allies

A Lockheed Martin unit deliberately overcharged the U.S. Defense Department and seven foreign countries more than $147-million, a former manager claims in a whistleblower lawsuit.

Albert D. Campbell, the former cost-control chief of Lockheed's Orlando-based Lantirn program, claims the company falsified documents, double-billed and inflated costs to get millions more than it was due. Lockheed Martin makes the Lantirn infrared navigation device used in aircraft.

Campbell's allegations are made in a federal whistleblower lawsuit filed in May 1995 and unsealed last week in Orlando's U.S. District Court. The suit falls under the False Claims Act, which allows individuals to sue companies on behalf of the U.S. government if they believe tax dollars are being improperly used.

Lockheed would not comment on the allegations. Company lawyers received the suit late last week and are still evaluating how the company should respond, Lockheed spokesman Jim Tierney told the Orlando Sentinel.

Campbell's allegations have triggered investigations of the Lantirn program by the U.S. Justice Department and the Department of Defense. The Justice Department is considering whether to join Campbell in pursuing the case, said Karen L. Gable, an assistant U.S. attorney in Orlando.

Lockheed's violations began as far back as 1988 involving about $6-billion worth of contracts with the U.S. Air Force and Israel, Egypt, Turkey, South Korea, Saudi Arabia, Greece and Bahrain, the suit says.

Lockheed's sales to other countries were negotiated and handled by the U.S. government, which passed the company's inflated contract prices onto U.S. allies, said Andrew Grosso, Campbell's lawyer.

Bethesda, Md.-based Lockheed Martin could face up to half a billion dollars in penalties if the allegations are substantiated, said Paul Nisbet, a defense analyst with JSA Research Inc., a stock research firm in Newport, R.I.

"The financial impact on the company could be disastrous," Nisbet said.

Lantirn is one of the biggest deals in the history of Lockheed Martin's Orlando operations. Sales to the U.S. Air Force alone have totaled more than $3-billion since 1987.