Lawrence Engineering Indicted in Sale of Defective Fasteners

Lawrence Engineering & Supply in Burbank and two of its former top managers were indicted Thursday on charges of selling substandard nuts and bolts used in the space shuttle, nuclear missiles and United Airlines commercial jets.

The indictment handed up by a federal grand jury in San Jose listed 33 charges of conspiracy and making false statements to the government in connection with fasteners sold by Lawrence from December, 1983, through October, 1987.

Lawrence routinely fabricated the results of safety tests on counterfeit fasteners and then sold them to companies whose work can affect public safety, the indictment said. “If Lawrence Engineering did what is alleged in the indictment, they have definitely put the public and the country at risk,” said Joseph Burton, an assistant U.S. attorney in San Jose.

Ross Arbiter, Lawrence’s attorney, countered that “the company has been in business for 36 years and believes its products were and are sound. If the company had been producing substandard parts, it would have been out of business long ago.”

Gary Davidson, 37, of Saugus, who was Lawrence’s quality control manager from 1978 until his departure in March, 1985, has agreed to plead guilty to the 33 charges and to help federal prosecutors in their case against the company and the other defendant, Ramon Smith, 63, of Canyon Country. Smith until recently was the company’s vice president and general manager.

Smith’s lawyer, Robert L. Shapiro, said that Smith “directed the sales of the company. Other people were in charge of quality control and he relied on them for proper certifications and proper analysis of the bolts in question.”

No Risk to Passengers

If convicted, Smith could receive as much as 165 years in prison and a fine of $6 million. Lawrence, Burton said, could be fined up to $12 million.

Burton said Davidson and federal prosecutors had negotiated an agreement in return for his cooperation but he refused to elaborate.

United Airlines said Thursday that it had installed 1,000 of Lawrence’s allegedly bogus bolts in some of their planes’ air conditioning units, anti-skid systems and control boxes for maintaining air pressure. Spokesman Rob Doughty said passengers are not at risk because all of the systems have backups in the event of failure.

“The anti-skid system is the braking system which keeps the airplane from skidding or hydroplaning when it lands in bad weather,” Doughty said. “But if the anti-skid system fails, other systems will still work to prevent those things from occurring. This isn’t that critical.”

Doughty said United has no plans to replace the bolts.

Spokesmen for the Federal Aviation Administration and the Department of Transportation were unavailable for comment. But the indictment claims that Lawrence obstructed the Transportation Department’s “function of ensuring civilian aircraft flight safety.”

According to the indictment and federal prosecutors, Lawrence’s allegedly bogus fasteners also have been found in the Army’s Bradley Fighting Vehicle, the Air Force’s MX and small intercontinental ballistic missiles and the Navy’s Poseidon and Trident missiles.

NASA Investigating

Lawrence shipped its nuts and bolts with certifications that said, “We hereby certify that the items have been manufactured, inspected and/or tested in conformance with all provisions of the applicable specifications.” But the indictment alleges that the tests never took place.

Lawrence first came to the attention of federal investigators last year after the National Aeronautics and Space Administration replaced more than 350 of the company’s bolts installed in the space shuttle Discovery, before its successful launch in September.

As part of an internal safety inspection sometime around March, NASA was alerted by one of its subcontractors that some Lawrence Engineering bolts might not meet required safety standards. The agency then started its own investigation and found the bolts did not meet strength requirements.

A federal investigation into Lawrence by several agencies, including the Defense Criminal Investigative Service, was begun last summer.

Employees at Lawrence told federal investigators then that they were told to “fill in the blanks” on certification forms even though tests allegedly had not been conducted, according to DCIS documents. Davidson told DCIS that the parts certifications were “worthless,” according to an affidavit filed by the investigative agency.

Burton said Lawrence was one of the nation’s largest suppliers of fasteners to the aerospace industry in the mid-1980s. The company once had annual sales of approximately $25 million, he said.

Lester Lawrence, who owns the company, was not named in the indictment. Arbiter said Lawrence retired several years ago and has relied on top managers, including Smith, to run the firm.