Judge to Decide by Feb. 10 on General Dynamics Probe

In a closed-door hearing, a federal judge in Los Angeles said Monday that he will rule by Feb. 10 on whether the Justice Department failed to “diligently investigate” charges by current and former employees that General Dynamics Corp. falsified tests on two important defense systems made at the company’s Pomona plant, according to a lawyer for the employees.

The hearing was held by U.S. District Judge W. Matthew Byrne Jr. in a civil fraud case that was filed under seal under the Federal False Claims Act in September, 1988. The allegations inadvertently came to light at that time because of a mistake in the court clerk’s office. However, the case is still formally under seal, so Byrne did not allow reporters or other spectators to attend Monday’s hearing.

One current and four former employees of General Dynamics, one of the nation’s largest defense contractors, alleged in the suit that company officials began in 1983 to teach workers how to falsify quality assurance tests on military hardware. The parts are used in the Navy’s primary antiaircraft missile--the Standard missile--and in the Phalanx anti-missile system.

The Phalanx system was in use aboard the Navy frigate Stark when the ship was struck by a missile in May, 1987, killing 37 sailors in the Persian Gulf.

Among the charges are that in the tests the company used computer software programmed to pass substandard parts. The suit also contends that Navy officials knew about the defective parts and that General Dynamics deliberately overcharged the government for its work on the Phalanx.

At the time the suit was filed, General Dynamics’ Pomona division had made more than 15,000 Standard missiles and more than 500 Phalanxes.

Under the False Claims Act, a private citizen is allowed to recover damages if a case against a contractor that has defrauded the government is successfully prosecuted.

Monday’s hearing stemmed from actions that occurred last October, when the Justice Department declined to intervene in the case. Then Herbert Hafif of Claremont, the plaintiffs’ lawyer, wrote to Atty. Gen. Dick Thornburgh and several U.S. senators and representatives, asserting that the Justice Department had failed to “diligently investigate” the charges.

“Something has got to be done,” Hafif said in a letter to Rep. John D. Dingell (D-Mich.) that was first reported in Defense Contract Litigation, a Washington magazine specializing in Defense Department litigation. “This is a major case that is being defaulted. A fraud is effectively being pardoned by default,” Hafif added.

Hafif said this is the first case that he knows of in which the Justice Department has been formally charged with failing to properly investigate a plaintiff’s claims in a false claims suit.

Byrne’s ruling could have a significant impact on the relationship between Justice Department lawyers and the private plaintiffs in these types of cases.

Hafif asserted that investigation in the case had been thwarted because “General Dynamics has intimidated potential witnesses.”

But Chris Shields, a company spokesman at the company’s St. Louis corporate headquarters, said General Dynamics has “never seen the charges” in the case. “To the best of our knowledge, the government investigation has not been completed and we have not been informed of its status.”