ITT to pay $100 million for sharing classified night-vision goggle technology

Associated Press • Mar 27, 2007 at 11:57 AM

ROANOKE, Va. - ITT Corp. has agreed to pay a $100 million penalty for illegally sending classified night-vision technology used in military operations to China and other countries, U.S. Attorney John Brownlee announced Tuesday.

ITT, the leading manufacturer of night-vision equipment for U.S. armed forces, will plead guilty in U.S. District Court on Wednesday to two felony charges, Brownlee said at a news conference. One count is export of defense articles without a license and the other is omission of statements of material facts in arms exports reports.

"The criminal actions of this corporation had threatened to turn on the lights on the modern battlefield for our enemies and expose American soldiers to great harm," Brownlee said.

ITT defense-related technical data was given to China, Singapore and the United Kingdom in order to cut costs, government investigators said.

"Placing profits ahead of the security of our nation is simply not acceptable for any corporation," Homeland Security Assistant Secretary Julie Myers said in a statement.

ITT, which Brownlee said is the U.S. military's 12th largest systems supplier, is the first major defense contractor convicted of a criminal violation under the Arms Export Control Act that a Brownlee spokesman said was passed in 1976.

ITT chief executive Steven Loranger noted that the case related to the actions of a few individuals in one of 15 business units, but said the company "regrets very much that these serious violations occurred."

"I want to reinforce, however, that the heart of our night vision goggles - the tube - is secure," he said. "No information regarding the tube was ever compromised."

According to the prosecutor, ITT agreed to pay a $2 million criminal fine, forfeit $28 million in illegal proceeds to the U.S. government and pay $20 million to the State Department.

"ITT will pay $50 million in restitution to the victims of their crimes - the American soldier," Brownlee said.

The fine will be suspended for five years and the White Plains, N.Y.-based company can reduce it dollar-for-dollar by investing in the development and production of more advanced night-vision technology so the U.S. military maintains battlefield advantage.

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