U.S. defense contractor Northrop Grumman hid major accounting irregularities in the late 1980s in order to remain eligible to work for the Pentagon, the Wall Street Journal said on Monday.
The accounting problems — which occurred through the end of the Cold War — are revealed in internal documents reviewed by the Journal, but that have not been made public.
The documents are part of a U.S. government lawsuit against Northrop that could seek hundreds of millions of dollars in penalties from the Los Angeles-based firm, the Journal said.
In a U.S. Justice Department's False Claims Act case that has been pending for years and that could go to trial later this year, the government alleges Northrop Grumman's Rolling Meadows, Illinois unit overcharged for advanced radar jamming devices and other equipment used on the Defense Department's advanced planes, the story said.
The Journal said a federal judge in Chicago is about to unseal some of the files.
The story also quotes a 1986 memo sent to 37 managers that said when discussing accounting faults: "We can't tell the truth."
Northrop said in an SEC filing, according to the Journal, that the government is seeking damages of $369 million — which could be trebled under the False Claims Act.
In that same filing, Northrop said: "The company denies the allegations and continues to vigorously defend the action."
A Northrop Grumman representative could not be immediately reached by Reuters.
