Patriot missile maker gets penalty of nearly USD1bn
Date
10/20/2024 5:04:08 AM
(MENAFN) The US government has imposed significant penalties on defense contractor Raytheon, mandating the company to pay over USD950 million in fines for fraudulent practices involving federal contracts and bribery of foreign military officials. This announcement was made public on Wednesday through a press release from the US Justice Department.
Raytheon, a subsidiary of RTX, has accepted the allegations without dispute. As part of the settlement, the company will pay the hefty fine and enter into a three-year deferred prosecution agreement (DPA) in connection with the charges, which include two counts of “major fraud against the United States.”
According to the Justice Department, Raytheon acknowledged its involvement in two separate fraudulent schemes targeting the Department of Defense (DOD) related to the provision of defense articles and services, specifically including PATRIOT missile systems and radar technology.
Prosecutors detailed that between 2012 and 2013, and again from 2017 to 2018, Raytheon employees submitted “false and fraudulent information” during contract negotiations concerning the sale of PATRIOT missile systems and the operational maintenance of radar systems. As a result of these deceptive practices, the DOD ended up paying Raytheon USD111 million more than it should have for these services.
In addition to the charges related to the PATRIOT missile contracts, Raytheon has also confessed to consistently providing misleading information to the Defense Department regarding costs and pricing across multiple government contracts from 2009 to 2020.
Furthermore, the defense contractor has entered into a separate three-year DPA addressing two additional charges: one for conspiracy to bribe a high-ranking Qatari military official and another for violating the Arms Export Control Act (AECA). This latter charge involved efforts to conceal bribes in export licensing applications submitted to the State Department.
This significant penalty highlights the ongoing scrutiny of defense contractors and their practices, particularly regarding compliance with federal regulations and ethical standards in dealings with foreign governments. As the defense industry faces increasing pressure to uphold integrity, Raytheon’s case serves as a cautionary tale for other companies within the sector.
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