US fines ITT for illegal export to China

Roanoke, March 28:

ITT Corp has agreed to pay a $100 million (euro74.92 million) penalty for illegally sending classified night-vision technology used in military operations to China and other countries, US Attorney John Brownlee announced.

ITT, leading manufacturer of night-vision equipment for US armed forces, will plead guilty in US District Court to two felony charges, Brownlee said at a news Conference. One count is export of defense articles without a license and the other is omission of statements of material facts in arms exports reports.

“The criminal actions of this corporation had threatened to turn on the lights on the modern battlefield for our enemies and expose American soldiers to great harm,” Brownlee said on Tuesday.

ITT defense-related technical data was given to contractors in China, Singapore and the United Kingdom in order to cut costs, government investigators said.

“Placing profits ahead of the security of our nation is simply not acceptable for any corporation,” Homeland Security Assistant Secretary Julie Myers said in a statement.

ITT, which Brownlee said is the US military’s 12th largest systems supplier, is the first major defense contractor convicted of a criminal violation under the Arms Export Control Act that a Brownlee spokesman said was passed in 1976.

ITT chief executive Steven Loranger noted that the case related to the actions of a few individuals in one of 15 business units, but said the company “regrets very much that these serious violations occurred.” “I want to reinforce, however, that the heart of our night vision goggles - the tube - is secure,” he said. “No information regarding the tube was ever compromised.” According to the prosecutor, ITT agreed to pay a $2 million (euro1.5 million) criminal fine, forfeit $28 million (euro20.98 million) in illegal proceeds to the US government and pay $20 million (euro14.98 million) to the State Department.

“ITT will pay $50 million (euro37.46 million) in restitution to the victims of their crimes - the American soldier,” Brownlee said.

The fine will be suspended for five years and the White Plains, New York-based company can reduce it dollar-for-dollar by investing in development and production of more advanced night-vision technology so US military maintains battlefield advantage.

The government will have rights to any technologies ITT develops and can share them with rival defense firms bidding on future contracts, Brownlee said.

“The size of the penalty shows how severely the government regards any sale of sensitive military technology to a potential adversary,” said Loren Thompson, a defense analyst at the Lexington Institute in Arlington, Virginia “Night-vision goggles enhance the capability of military forces to operate around the clock, which differentiates our force from that of most adversaries.”