* Senator says latest report is "deeply troubling"
* GAO used fictitious company to buy parts
* All 40 offers for bogus part numbers came from China
By Andrea Shalal-Esa
WASHINGTON, March 26 (Reuters) - U.S. government investigators, using a fictitious company, were able to easily find electronic parts for weapons from China on the Internet and every single item they bought was counterfeit, despite China's pledge to crack down on fake products.
A new report by the congressional Government Accountability Office showed that 334 of 396 vendors who offered to sell parts to the fictitious company were from China.
It said all 16 parts eventually purchased by the fake company came from 13 China-based vendors and all were determined by an independent testing laboratory to be counterfeit.
"These findings should outrage every American," said Senator Carl Levin, the Michigan Democrat who heads the Senate Armed Services Committee, calling the new report "deeply troubling."
"The Chinese government's refusal to shut down counterfeiting that occurs openly in their country puts our national security and the safety of our military men and women at risk. It also costs thousands of American jobs."
Levin and the top Republican on the committee, Senator John McCain, blasted China last year for failing to control a flood of counterfeit parts installed on U.S. weapons systems.
At the time, they said committee investigators had identified about 1,800 cases involving one million counterfeit parts since 2009.
They asked the GAO to carry out the fictitious shopping trip as part of the committee's broader investigation, which is nearing completion. The GAO specifically requested parts that were new in original packaging, not refurbished.
McCain said the GAO report made clear how easily Chinese counterfeiters were able to access the U.S. market.
Given the lack of any crackdown by China, Levin said it was critical that the U.S. Treasury and Department of Homeland Security stop counterfeit products from entering the country, using authorities added to last year's defense authorization bill.
"There is too much at stake for us to delay," Levin said.
The GAO cautioned that the results of the latest report were based on a small sample and could not be used to make inferences about the extent to which parts were being counterfeited.
It said it bought seven parts with authentic part numbers that were out of production, including parts used on the Air Force's F-15 fighters, the Marine Corps' V-22 Osprey tilt-rotor aircraft and the Navy's nuclear submarines. All of those parts failed inspection and were determined to be counterfeit.
It also purchased five parts with authentic part numbers that were stamped with date codes beyond the item's last actual production date and all of those were determined to be counterfeit as well.
The agency also bought four parts with made-up numbers that are not associated with any authentic parts, which it said showed the willingness of the vendors "to supply parts that do not technically exist." All 40 of the responses it received for the bogus part numbers came from Cina, the GAO said.
The GAO also noted it was able to get membership on two Internet buying platforms fairly easily, while a third rejected the request from the fictitious company. None of the platforms contacted the company's listed references, it said.
Parts for defense systems are bought from many sources, which often are infiltrated by counterfeit items, the senators said. China has been identified nearly five times more frequently than any other country as a source of counterfeit parts, according to a U.S. Commerce Department report.
After the November Senate hearing, a spokesman for the Chinese Foreign Ministry rejected the committee's findings and said China was committed to fighting fake products.