Lockheed

IN 1909, AVIATOR Glenn L. Martin expanded his small aircraft construction business into Lockheed Martin Corporation, which became one of the most prominent aircraft suppliers in the world. In the years immediately after World War II, Europe was rebuilding its economy, and American businesses traded with former enemies as well as with former allies. International trade with developing countries was also on the rise. Expanded world markets offered enormous profits, and Lockheed was eager to make the most of its opportunities.

Money poured in from Lockheed sales to Japan, Germany, Italy, the Netherlands, West Germany, Indonesia, Turkey, Brazil, the Philippines, Saudi Arabia, and a number of other countries. Lockheed's problems started when William Findley, an independent auditor simply doing his job, discovered Lockheed's “unusual” accounting practices and began to wonder why Lockheed was making such huge contributions to a fund for widows and orphans in Djakarta, Indonesia, and to the Indonesian Air Force. Findley was most surprised by a Lockheed receipt that read: “I received One Hundred Peanuts.” He was even more astonished when he learned that “One Hundred Peanuts” literally meant the receipt was for one million Japanese yen.

In June 1973, the head of Northrop Corporation, a Lockheed rival, admitted to a subcommittee of the U.S. Senate that his company had also paid “consultants” to facilitate business deals with foreign governments, adding that Northrop's secret agreements were patterned after those used by Lockheed. The resulting scandal led Senator Frank Church, chair of the Church Committee that investigated the Lockheed scandal, to remark that Lockheed's activities encompassed “a sordid tale of bribery, and of shadowy figures operating behind the scenes with a cast of characters [straight] out of a novel of international intrigue.” Investigators discovered that between 1972 and 1974, the president [Page 500]of Lockheed, A. Carl Kotchian, had paid millions of dollars to Japanese sales consultants, secret agents, businessmen, and the Japanese government to facilitate the sale of Lockheed planes to All Nippon Airlines. Upon learning of the Lockheed scandal, Japanese merchants seized on the wording of the receipt that auditor Findley had discovered. Souvenir handkerchiefs were sold, which read: “I received One Hundred Peanuts.” Foreign governments did not treat the scandals so lightly. Many of Lockheed's cohorts stood trial and received various punishments.