Unisys

IN SEPTEMBER 1991, Unisys, then the fourthlargest defense contractor in the United States, agreed to pay a record $190 million fine to settle criminal charges stemming from Operation Ill Wind. Among those implicated in the government investigation of Defense Department corruption were six company executives, several consultants, military officials, and Armand D'Amato, brother of Senator Alfonse D'Amato (R-NY).

Formed in the 1986 merger of Burroughs and Sperry, Unisys became a computer industry giant, second only to IBM in size. Late that year, the company sold its Sperry Aerospace division to Honey-well but overstated assets in the $1.025 billion deal, leading to a 1993 settlement in which Unisys paid Honeywell $43.2 million.

Operation Ill Wind was an Federal Bureau of Investigation and Naval Investigative Service project aimed at rooting out fraud in the defense industry. In June 1988, a federal grand jury issued 275 subpoenas; federal agents searched 42 homes and offices in 12 states. Unisys' 1991 guilty plea was the 51st conviction of companies or individuals fingered in the investigation.

Charges against Unisys included bribing Melvyn R. Paisley, an assistant secretary of the navy, and Victor D. Cohen, air force deputy for tactical warfare systems, to gain contracts for the navy's Aegis anti-air warfare system and other military projects. Two years before the Unisys settlement, Garland L. Tomlin Jr., a branch head of the navy's Space and Naval Warfare Systems Command, pled guilty to accepting the largest bribe uncovered in the probe, $400,000 from Unisys and $75,000 from Honeywell. Tomlin was sentenced to 18 months in prison.

As well as direct bribery, Unisys was charged with using consultants to make illegal campaign contributions to members of the House Armed Services and Appropriations committee. Unisys also funneled money to D'Amato, hoping that he would lobby his brother. Senator Alfonse D'Amato was reprimanded by the Senate in 1991 for allowing his brother unrestricted access to his office and letterhead; Armand D'Amato was convicted in 1993 of seven counts of mail fraud. The brains behind Unisys' wrongdoing, Vice-President Charles Gardner, pleaded guilty in 1989 to bribing Paisley; on his release, he testified for the government against the younger D'Amato.

The 1991 settlement cleared the way for Unisys to spin off its troubled defense division as Paramax. This company, briefly owned by Loral and then bought by Lockheed Martin in 1996, had its own[Page 833] woes during multiple rounds of layoffs in the early 1990s. Although still faced with lawsuits from retirees whose health insurance benefits were cut, Unisys is finally showing signs of stability. Among its current products is fraud-prevention software.