close
close

Guiltandivy

Source for News

When the blood money isn't enough: Raytheon admits to defrauding the Pentagon
Update Information

When the blood money isn't enough: Raytheon admits to defrauding the Pentagon

RTX CorporationThe weapons giant formerly (and better) known as Raytheon agreed on Wednesday to pay nearly $1 billion to resolve allegations that it defrauded the U.S. government and paid bribes to win deals with Qatar to secure.

“Raytheon engaged in criminal activity to defraud the United States government,” Deputy Assistant Attorney General Kevin Driscoll of the Justice Department’s Criminal Division said Wednesday. “Such corrupt and fraudulent behavior, particularly by a publicly traded U.S. defense contractor, undermines public trust and harms the Department of Defense, companies that follow the rules, and American taxpayers.”

As part of that agreement, which included multiple investigations into its business, RTX admitted to participating in two separate fraud schemes against the Department of Defense, which included deals for a radar system and Patriot missile systems. It also agreed to enter into a separate deferred prosecution agreement related to the Qatar bribes, which provides for increased government oversight and transparency over the next three years.

“Over several years, Raytheon employees bribed a senior Qatari military official to obtain lucrative defense contracts and concealed the bribe payments by falsifying documents to the government, in violation of laws, including laws protecting our nation Security,” he told Breon Peace, U.S. attorney for the Eastern District of New York. “We will continue to advocate for justice against corruption and, as set out in this agreement, enforce meaningful consequences, reforms and oversight to ensure this misconduct does not occur again.”

The $950 million payment includes criminal penalties, civil monetary penalties, restitution, and restitution of profits RTX made from harassing the Pentagon.

The announcement is a rare example of a major defense contractor being held accountable for its white-collar crimes. But while Raytheon defrauded the government and violated international corruption laws, it has also been involved in potential war crimes in recent years.

As one of the world's largest military suppliers, Raytheon produces missiles, bombs, fighter aircraft components and many other weapons systems used in war zones from Afghanistan and Iraq to Gaza and Yemen. Civilians have often paid the price.

“Raytheon not only regularly defrauds the government, but its weapons are used to kill civilians in Yemen, Gaza and other war zones,” William Hartung, a longtime research fellow at the Quincy Institute for Responsible Statecraft, a weapons industry observer, told The Intercept .

RTX spokesman Chris Johnson said the company accepts responsibility for its misconduct in the fraud and bribery scandal. “We have worked diligently throughout the investigation to address this wrongdoing and will continue to do so,” he told The Intercept, but declined to comment on civilian casualties caused by Raytheon’s weapons.

Prior to 2023, the Israeli military deployed the 5,000-pound GBU-28 “Bunker Buster” and Raytheon laser-guided Paveway bombs, as well as AGM-65 Maverick air-to-surface missiles, AIM-9X missiles, and AIM-120 Sidewinder missiles , and long-range TOW missiles to attack targets in Gaza to a 2022 report by the American Friends Service Committee, a Quaker organization.

Such weapons are typically fired or dropped from F-15, F-16 and F-35 fighter aircraft, for which Raytheon provides weapons systems, components and maintenance services. The Israeli military may have also used its “bunker buster” bombs – weapons banned from use in areas with large civilian populations – in the Gaza Strip in the current war.

The Saudi-led coalition's war in Yemen was also fought with Raytheon ammunition. In 2022, the coalition carried out an airstrike on a detention center that killed at least 80 people and injured more than 200, according to Doctors Without Borders. An Amnesty International investigation found a GBU-12 manufactured by Raytheon, a 500-pound laser guided bomb used in the attack. Amnesty also found that Raytheon bombs were used in a Saudi-led airstrike in 2019 that killed six civilians – including three children.

An investigation by CNN and the Yemen-based human rights group Mwatana found evidence that Raytheon weapons systems were used by the Saudi-led coalition in numerous cases of civilian harm, such as a 2018 attack on a wedding party that killed 21 civilians , including 11 children, were killed and injured another 97 people, including 48 children; a 2016 airstrike that killed 15 members of a single family, including 12 children, the youngest a one-year-old boy; the 2016 apartment bombing that killed six people; and an attack on a residential neighborhood in 2015 that killed one civilian and injured six others, including two women and a young girl.

“The Raytheon allegations are staggering, even by the defense industry’s lax standards,” Hartung told The Intercept this week. “Engaging in illegal behavior to this extent suggests that this behavior is far from an anomaly and could be a normal course of business for the company.”

Although Raytheon has been a major U.S. defense contractor since the 1940s and has won tens of billions of dollars in government contracts, the company has actually been embroiled in scandals and misconduct for decades, although it has rarely been forced to pay fines and penalties were penalties of this magnitude.

The company pleaded guilty to “illegal trafficking in secret military budget reports” (1990); paid $4 million to settle charges that it overbilled the Pentagon (1994); paid $10 million to settle a class action lawsuit alleging that the Amana unit sold defective furnaces and water heaters (1997); paid $2.7 million to resolve allegations that the Pentagon improperly charged expenses for marketing products to foreign governments (1998); paid $400,000 to settle claims that the Department of Defense overcharged (1999); paid the federal government more than $1 million to resolve quality control problems on various electronic devices sold to the Pentagon (2000); paid $3.9 million to settle allegations that the Department of Defense had been overbilled (2003); agreed to pay a $25 million civil penalty to resolve U.S. State Department allegations that the company violated export controls (2003); agreed to pay $12 million after the SEC found that it had “made false and misleading statements and engaged in improper accounting practices that amounted to fraud” (2006); agreed to pay an $8 million fine for export control violations (2013); agreed to pay $1 million to settle a procurement fraud claim (2019); agreed, along with a subsidiary, to pay $515,000 to resolve False Claims Act (2021) allegations; and agreed to pay $59.2 million to settle an Employee Retirement Income Security Act complaint after an outdated mortality table was used to incorrectly calculate retirement benefits (2021).

Earlier this year, RTX agreed to pay $200 million to resolve allegations that the company violated U.S. export controls, including by transferring some of the technology behind Air Force One and U.S. military aircraft to China, and was named in a class action lawsuit for alleged discrimination against job seekers who are 40 years old or older. This week's $950 million settlement includes a $428 million civil settlement for allegedly deceiving the government about its labor and materials costs to justify more expensive no-bid contracts and for double billing a weapons maintenance contract.

“Raytheon Corporation engaged in a systematic and deliberate conspiracy that knowingly and willfully violated U.S. fraud and export laws,” Special Agent in Charge William S. Walker of Homeland Security Investigations, New York, said earlier this week. “Raytheon’s bribery of government officials, particularly those involved in the procurement of U.S. military technology, posed a national security threat to both the United States and its allies.”

Johnson, the RTX spokesman, did not comment on Raytheon's long history of alleged misconduct, noting only that “RTX has entered into agreements with the U.S. Department of Justice (DoJ) and the U.S. Securities and Exchange Commission (SEC) in connection with previously disclosed investigations.” has.”, and characterizes them as “legacy legal matters.” He also did not respond to questions about the company's threat to U.S. national security and its obligations to U.S. taxpayers.

While taxpayers have been harmed by Raytheon's corrupt business practices, the weapons giant's investors have benefited from Israel's war on Gaza. “Raytheon's total investor return was 82.69 percent last year, outperforming the S&P 500 by approximately 46 percent,” Eli Clifton, a senior advisor at the Quincy Institute, wrote recently.

“At this point, Raytheon appears to be a fraudulent company more interested in increasing revenue for its executives and shareholders than serving as a reliable supplier of defense equipment,” Hartung told The Intercept. “The extent of Raytheon’s misconduct suggests that the Justice Department should closely examine the practices of other defense contractors to determine whether what Raytheon committed is an industry-wide practice.”

LEAVE A RESPONSE

Your email address will not be published. Required fields are marked *