September 18 2000
FBI probing TRW for missile defense-related fraud
By Jim Wolf

WASHINGTON, Sept 18 (Reuters) - The FBI said on Monday it had begun a preliminary inquiry into fraud and cover-up charges involving defence giant TRW Inc.'s role in a key component of the U.S. national missile defence programme.

``It磗 a preliminary inquiry at this point to determine if an investigation is justified,创 said Susan Lloyd, spokeswoman for the FBI磗 Washington field office.

Fifty-three U.S. House of Representatives Democrats had urged the FBI to look into self-styled whistle-blowers' allegations that TRW (NYSE:TRW - news) faked test results in developing a prototype ``kill vehicle创 for the proposed antimissile shield.

Lloyd said the matter was being reviewed by a white-collar crime unit. She said she had no idea when a determination would be made on whether a ``full-field创 investigation was warranted. Any such finding would be made in conjunction with the U.S. Attorney磗 office, she said.

Nira Schwartz, a senior engineer at TRW in 1995 and 1996, has charged that TRW fudged flight-test data, purportedly to conceal that its prototype would be unable to differentiate warheads from decoys that an enemy might use to overwhelm the defence system.

Cleveland-based TRW said it had discussed the ``Nira Schwartz issue创 with FBI officials and offered to assist them in any way possible. Schwartz was fired by TRW. She has sued the company in Los Angeles, where the case is pending.

COMPANY EXPRESSES CONFIDENCE

``We are confident that this review by the FBI or any other organisation will once again validate TRW磗 work创 on the proposed antimissile system, Jay McCaffrey, a company spokesman, said on Monday night.

TRW portrayed the FBI's preliminary review as nothing more than a ``routine action创 taken in response to a request from a member of Congress. The FBI磗 Lloyd declined to characterise it in this way.

The U.S. Defence Criminal Investigative Service concluded in 1997 that Schwartz's allegations warranted further review, but a Pentagon advisory board disagreed and defended TRW's work. The Justice Department, after reviewing an additional study by a supposedly independent panel, declined to join Schwartz's lawsuit against TRW.

Schwartz has been joined by Theodore Postol, an arms expert at the Massachusetts Institute of Technology and former government science advisor, in trying to win White House attention to the alleged fraud in missile defence.

President Bill Clinton said on Sept. 1 that he would leave it to his successor to decide whether to build a missile shield, citing, among other things, two failures in the first three flight tests and strong opposition to the programme from Russia, China and others. The request for an FBI investigation was spearheaded by Representative Dennis Kucinich, an Ohio Democrat. Last week, he released a July 31 reply in which the FBI said it would review whether federal law had been broken.


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