Teledyne Industries

FOUNDED IN 1960 by Henry Singleton and George Kozmetsky, Teledyne, Inc. was a communications company created to capitalize on the shift from analog to digital technologies. Teledyne has since branched out into several subsidiaries including companies in the fields of electronics, communications, engineering, aerospace, and energy.

Several of these subsidiaries have continued to branch off into separate units of their own. One of the units, Teledyne Industries, is a military contracting company based out of Newbury Park, California, and has been involved in several cases of defrauding the U.S. government, specifically, the Department of Defense. Most of the cases involve inflated pricing and inadequate testing of military equipment.

Between 1980 and 1986, Teledyne Hydra-Power, a unit of Teledyne Industries, defrauded the U.S. Navy of $4.5 million on a helicopter contract by inflating the price of parts and the number of hours worked. Teledyne paid the U.S. government $11.9 million to cover overcharges, interest, and penalties. Again, in 1992 Teledyne Industries agreed to pay $17.5 million to settle a criminal case in which it was accused of 35 counts of submitting false statements between 1987 and 1990. Teledyne sold over 12 million relay switches to the Pentagon without adequately testing them. The relays normally cost $6 each, but the government paid $26 per relay so that each one could be tested and certified.

In the course of the 10-year contract, the government would have been defrauded of $240 million.[Page 799] In a similar case, Teledyne paid the U.S. government $275,000 in 1993 to settle claims that their Firth Sterling division failed to properly test cluster bomb grenades. Ten months later, Teledyne paid the government $1.5 million and pleaded guilty to three felony counts of submitting false statements about sales to Taiwan in the 1980s. Then, again in 1994, Teledyne Industries paid the U.S. government another $10 million for failing to perform quality-control tests on parts used in the U.S. Army's Stinger missile. The Environmental Protection Agency also fined Teledyne $85,000 in 1994 for violating the federal Clean Water Act by releasing excess metals and cyanide in waste water discharged to city sewer plants.