Litton Reportedly to Pay Fine to Avoid Criminal Charges

Litton Industries Inc. will pay a multimillion-dollar penalty to avoid federal criminal charges that it made improper payments to foreign consultants, a person familiar with the investigation said Tuesday.

The federal government informed the Woodland Hills-based defense contractor in February of plans to bring criminal charges, Litton said in regulatory documents filed earlier this week. Litton may announce the penalty payment as early as next week, the person said.

The Justice Department’s investigation focused on Litton’s payments to foreign consultants and the reporting of those payments to the United States in connection “with sales to Taiwan, Greece and possibly South Korea,” according to the filing with the Securities and Exchange Commission.

The investigation involves Litton’s relationship with Richard Hei, a consultant with ties to Taiwan’s military and to officials in other countries, according to the Wall Street Journal, which reported the settlement Tuesday.

Litton employed Hei through the 1980s and early 1990s to help win military orders from foreign governments. Details about payments to consultants must be disclosed to the Pentagon as part of foreign arms sales, the article said.

Ian Campbell, an outside spokesman hired by Litton, would neither confirm nor deny the newspaper article, or comment beyond the SEC filing. A spokesman for the U.S. attorney’s office declined to comment.

While Litton believes it has “good and meritorious defenses” against the charges, it couldn’t predict the outcome of any trial, according to the filing.

Litton shares rose 75 cents to close at $68.75 on the New York Stock Exchange.