ITT hit over export of night-vision goggle parts

WASHINGTON Tue Mar 27, 2007 4:18pm EDT

An undated night vision video grab. ITT Corp. has agreed to plead guilty and pay a penalty of up to $100 million for illegally exporting night vision goggles in 2001 to China, Singapore and the United Kingdom, the Justice Department said on Tuesday. REUTERS/File

An undated night vision video grab. ITT Corp. has agreed to plead guilty and pay a penalty of up to $100 million for illegally exporting night vision goggles in 2001 to China, Singapore and the United Kingdom, the Justice Department said on Tuesday.

Credit: Reuters/File

WASHINGTON (Reuters) - ITT Corp. has agreed to plead guilty and pay a penalty of up to $100 million for illegally exporting night-vision goggle component parts to China, Singapore and Britain in 2001, the U.S. Justice Department said on Tuesday.

It said ITT had agreed to plead guilty to one count of making the exports without first obtaining a license or written authorization from the State Department.

The company also will plead guilty to one count of leaving out material facts from required reports on arms exports between 2000 and 2004, making the reports misleading, the department said.

The Justice Department said ITT would pay a $2 million criminal fine, forfeit $28 million as the proceeds of its illegal actions, and pay a $20 million penalty to the State Department.

Payment of a $50 million deferred prosecution penalty will be suspended for five years, department officials said. ITT can pay the $50 million or invest that same amount in developing more advanced night-vision technology.

The officials called the total one of the largest penalties ever in a criminal case. They said ITT would become the first major defense contractor convicted of a criminal violation of the Arms Export Control Act.

"ITT's exportation of this sensitive technology to China and other nations jeopardized our national security and the safety of our military men and women on the battlefield," Assistant Attorney General Kenneth Wainstein said in a statement.

ITT said the financial impact of the fine was fully covered by the company's previous reserves, including a $25 million charge to net income that was taken late last year.

"While this settlement relates to the actions of a few individuals in one of our 15 business units, we regret very much that these serious violations occurred," ITT Chief Executive Steven Loranger said in a statement.

"I want to reinforce, however, that the heart of our night vision goggles -- the tube -- is secure. No technical information regarding the tube was ever compromised," Loranger said.

A company spokesman said, "There's no question that violations occurred. We're very anxious to put this behind us and move forward."

Justice Department officials said ITT was aware it was violating its export licenses for the night-vision goggles, but failed to take significant corrective action until shortly before it informed the State Department about the violations.

The State Department placed restrictions on certain exports of ITT night vision equipment for at least one year, but the company said the restriction would apply to less than 5 percent of its total night vision sales.

Department officials said the plea agreement and statement of facts in the case had been filed in federal court in Roanoke, Virginia. They said they expected to formally enter the company's guilty plea before a judge on Wednesday.

ITT also said it launched a new ethics training program for all employees and developed a comprehensive computer tracking program to monitor all packages sent from ITT facilities.

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