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The Lockheed Incident And Corporate Crime In The Aerospace Industry

3072 words - 13 pages

The case of the Lockheed Incident, is one which deals with bribery and kickbacks between corporations to officials and political figures in return for contracts, a type of figurative "grease machine". The Lockheed Corporation, which is what this essay will concentrate on, was scrutinized during the 1970's for its "questionable practices" in going about getting aerospace contracts. They were seeking favor through financial inducements. 1 Their practices became public when the Northrup case broke, and the Subcommittee on Multinational Corporations began a huge investigation, which resulted in the arrests of the major players and downfall of the company. Another angle of what crime was ...view middle of the document...

In this case, bribery is used to expropriate capital, but it is not stealing, because in return for contracts, the buyers are given aircrafts, weapons, etc. The pattern is that Lockheed, would make payments to either the companies directly in turn for large contracts, worth much more than the bribe, or they would provide payment to an agent, or government official in return for the assurance or influence to the company giving the contract. Basically, the company is only trying to attain an edge of their competitors such as Northrup, or Boeing, and the shenanigans that are used are the offering of monies in return for assurances. In a way those who are really doing the expropriating are the agents, brokers, and politicians. They may decide to steal money without living up to their part of the bargain, or do as Prince Bernhard did, and agree to a certain amount of payment, and then inflate their cost, or threaten to not go through. It is also fair to say that Lockheed was misrepresenting the reasons for receiving these contracts from foreign companies such as Japan and Indonesia. The rival company's would be under the opinion that they received the contracts because they were better products. The countries and businesses such as All Nippon Airways were also lying about why they gave such contracts to Lockheed. During the investigation it was revealed that Lockheed paid out millions of dollars to companies as well as to many agents for their services, which is all capital expropriated by the respective agents. The misuse of capital in this case, was that instead of using the money the company had to improve their planes and products, thus allowing them to sell more contracts because they have a superior product, they used it to bribe others into buying their inferior products. Before we discuss the particular players we must first acknowledge the fact that a top-level management team thought up the Lockheed scandal, and that they also implemented it as well. None of the lower level, and very few of the middle level personnel had anything to do with these crimes. The players that were involved, were each integral parts of the success of Lockheed's contracts. Daniel J. Haughton was the chairman of Lockheed, who testified that his company had done nothing wrong. Tanaka who was the prime minister of Japan at one time was the one who was brought up on charges of Japanese foreign exchange laws in Toyko. Prosecutors wanted to blame him for arranging the sale of Tri-Star planes to All Nippon, and for his influence he would be give 1, 600,000 dollars. Hiro Hiyama and T. Okubo introduced the original deal of Tri-Star planes to Tanaka. These men worked for Marubeni the 4th largest trading company in Japan. A. Kotchian the president of Lockheed. He and John Clutter, Lockheed's chief representative in Japan would frequently pay for the aide of the notorious Yoshio Kodama. He was a secret agent for Lockheed in Japan. He was able to get many contracts for...

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