Rockwell Hit by Indictment

A federal grand jury in Iowa indicted Rockwell International, along with one current and one former manager, for defrauding the government on the space shuttle program--the third time in a decade that the aerospace firm has been criminally charged.

A 15-count indictment, returned in U.S. District Court in Cedar Rapids, charges conspiracy, mail and wire fraud and false claims, alleging that the firm inflated its charges under a cost-plus type contract on the program.

The defendants are charged with inflating records of the amount of time worked on contracts for the National Aeronautics and Space Administration and then sending false billings to NASA for payment.

The El Segundo-based firm said in a statement: “Rockwell International believes it is innocent of any wrongdoing and intends to defend itself vigorously against the charge.”

The two Rockwell International employees named in the indictment are Sandra Simoens, identified as a quality operations manager at Rockwell’s Collins Government Avionics division, and Richard Priddy, a former manager of materiel and manufacturing operations.

“At various times Richard Priddy told employees to ‘soak the shuttle’ or ‘hose NASA’ or words to that effect,” the indictment says.

The charges cover production and repair work done on space shuttle equipment over several years, U.S. Atty. Charles W. Larson said. The specific amount of the overcharge was not disclosed.

The Collins division, based in Cedar Rapids, reports to Rockwell’s defense electronics operation in Anaheim, a company spokesman said.

If convicted on all counts, Rockwell could be fined up to $7.5 million, Larson said. Priddy and Simoens could each be sentenced to 30 years in prison and fined up to $1.5 million if convicted on all counts, the statement said.

Rockwell pleaded guilty to one count of conspiracy and one count of contempt in a case brought against the firm’s Seal Beach operation in 1988. In 1982, Rockwell was charged with shifting costs from a navigation satellite program to the space-shuttle program and later pleaded guilty to the charges.