THE US DEPARTMENT of Defense (DoD) is reviewing whether to bar Lockheed from receiving Pentagon contracts after the company pleaded guilty to paying an Egyptian politician $1 million for help in securing a $79 million contract for three C-130H Hercules transports.

The US State Department has been reviewing the company's proposed export sales since Lockheed was indicted in June, but has not delayed any deals.

Lockheed has agreed to pay a $24.8 million fine, representing twice its profit on the 1989 deal, the highest ever paid under the US Foreign Corrupt Practices Act. "Lockheed chose to settle the matter because, during its internal investigation, it found that regrettable mistakes in judgment were made by a few the late 1980s," the company says.

The US Government alleged that Lockheed agreed in 1988 to pay a commission of $600,000 per aircraft to a consulting company owned by a member of the Egyptian People's Assembly.

In 1989, Lockheed assured the DoD that no fee would be paid in connection with the sale, but, in 1990, the company agreed to pay a $1 million "termination fee" in lieu of the commission.

Former Lockheed director of Middle East and North African sales Allen Love pleaded guilty to helping the company pay and conceal the bribe.

A former regional vice-president of Lockheed Corporation International, Suleiman Nassar, is a fugitive living in Syria.

Source: Flight International