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Lockheed Martin Pays $2 Million Settlement for Defrauding U.S. Government


Becoming bedfellows with any defense contractor is a dangerous game, but in light of yesterday's news out of the justice department, Burlington Mayor Bob Kiss may now wish he'd courted a more attractive partner.

On Monday, the U.S. Department of Justice announced that it had reached a $2 million settlement with Lockheed Martin, Inc. to resolve a June 2009 whistleblower lawsuit. The suit, filed in the southern district of Mississippi, alleged that the world's largest defense contractor knowingly violated the U.S. False Claims Act by conspiring to submit false claims under a contract with the General Services Administration for work on the Naval Oceanographic Major Shared Resource Center.


Without getting into too many particulars, the suit alleged that two then-government employees conspired with Lockheed Martin and another contractor, Science Applications International Corporation (SAIC), to game the system to ensure that SAIC and Lockheed Martin were awarded the contract.

"Companies that do business with the federal government and get paid by the taxpayers must act fairly and comply with the law," said Tony West, assistant attorney general for the justice department's civil division, in a written statement. "Whistleblowers have helped us to enforce the law by bringing to light schemes that misuse taxpayer dollars and abuse the public trust by undermining the integrity of the procurement process."

 As Seven Days' Shay Totten first reported in his December 18, 2010 column, Mayor Kiss has signed a "letter of cooperation" with Lockheed Martin to work together on a number of green-energy-related issues. According to the mayor's press release, Burlington and Lockheed Martin plan to "explore mutually beneficial arrangements involving sustainable environmental practices and renewable energy projects that can be applied in Burlington and elsewhere."

But despite the eco-friendly nature of the agreement, some Queen City progressives were understandably irked that, as Totten points out, a city once known for hosting protests and civil disobedience at its General Dynamics facility is now cozying up to the manufacturer of the F-35, the next-generation strike fighter that, coincidentally, the military may eventually base at Burlington International Airport.

Lockheed Martin's $2 million settlement won't leave much of a chink in its armor. Headquartered in Bethesda, Md., the company employs about 133,000 people worldwide and posted $44 billion in sales in 2009. It's likely a $2 million settlement falls under the category of "cost of doing business."