The Justice Department sued Lockheed Martin Corp. (LMT) and several of its affiliates Friday, alleging the company paid kickbacks to another contractor's executives and inflated billing costs in connection with an environmental cleanup project.
U.S. authorities claim that in 2010 the Department of Energy contracted Mission Support Alliance LLC, then partially owned by a Lockheed Martin subsidiary, to clean up the Hanford decommissioned nuclear production complex on the Columbia River in Benton County, Washington. Mission Support then awarded its affiliate, Lockheed Martin Services Inc., a $232 million subcontract to perform that work from Jan. 1, 2010 through June 2016.
Prosecutors allege that Lockheed Martin paid more than $1 million to Mission Support President Jorge Francisco Armijo and other company executives to win the $232 million subcontract. The Justice Department also said the defendants lied about the amount of profit included in Lockheed's billing rates.
"Lockheed Martin categorically denies the allegations made by the United States Attorney's Office for the Eastern District of Washington and rejects the suggestion that the corporation or its executives engaged in any wrongdoing," a Lockheed Martin spokeswoman said in a statement. "Lockheed Martin will defend this matter vigorously."
Mr. Armijo didn't respond to requests for comment.