Justice Department investigating Deepwater for possible fraud

Lawmakers, Lockheed Martin and Northrop Grumman confirmed the Justice Department is looking into possible allegations of fraud under the Deepwater program.

The chairman of the House Transportation and Infrastructure Committee said today that the Justice Department is conducting its own inquiry on the Coast Guard’s Deepwater program.

Rep. James Oberstar (D-Minn.) said during a hearing on the problematic $24 billion initiative to replace the Coast Guard’s aging fleet that DOJ would look into the issues of fraud by the joint team of Lockheed Martin and Northrop Grumman.

Rep. Elijah Cummings (D-Md.), chairman of the committee’s Coast Guard and Maritime Transportation Subcommittee, called for an investigation last week. “[I]t is time to salvage equipment and parts from the 123-foot patrol boats and begin a civil and criminal investigation into how the federal government and the American taxpayers were sold a boat that is unsafe,” he said.

Oberstar added that as disturbing as the Coast Guard’s decision to abandon the 123-foot patrol boats was, the management failures are even more upsetting. He said he would await full judgment until after the hearing and possible investigation.

The Coast Guard earlier this week removed Lockheed Martin and Northrop Grumman from the lead systems integrator role and moved it in-house.

Margaret Mitchell-Jones, communications director for the Integrated Coast Guard Systems — a Lockheed Martin and Northrop Grumman joint venture -- said the Justice Department notified the two companies in December 2006 that they were conducting an investigation and the companies should not destroy any information related to the program.

"ICGS is cooperating with the investigation,” Mitchell-Jones said.

But Mitchell-Jones added that having a “do not destroy” order from Justice doesn’t mean anything is wrong.

“DOJ is just doing its job,” she said.

Coast Guard spokesman Cmdr. Jeff Carter referred all questions about a possible investigation to DOJ.

Two witnesses during the hearing told lawmakers that actions by Lockheed Martin, Northrop Grumman and the Coast Guard were more than simple mistakes.

“They were informed, deliberate acts,” said Michael DeKort, a former Lockheed Martin systems engineer on Deepwater.

James Atkinson, president and senior engineer at the Granite Island Group, an electrical engineering company that reviewed the data protection capabilities on the cutters, said the ships are a liability to national defense because the information technology on board does not meet “stringent certifications” to protect data.

He recommended the committee consider debarring both companies until the fraud investigation is completed. He said Congress should pull the plug on the Coast Guard’s access to any classified network including the military’s secure IP network.

“The committee should consider every Coast Guard asset vulnerable until an independent and rigorous inspection done by someone outside of the Coast Guard is completed,” Atkinson said. “The Navy should handle the Coast Guard’s procurements until the Coast Guard proves it can do it themselves.”