A. Carl Kotchian, Lockheed chief in aerospace bribery scandal, dies
Published 4:00 am Monday, December 22, 2008
A. Carl Kotchian, the former president of Lockheed Aircraft Corp. whose admission of paying millions of dollars in bribes to foreign government officials led to the imprisonment of Japan’s prime minister and political upheaval in several countries in the 1970s, has died. He was 94.
Kotchian, who had been ill with ailments related to aging, died Dec. 14 at Sequoia Hospital in Redwood City, Calif., said his son Robert Kotchian.
A key figure in what became one of the biggest bribery scandals ever, Kotchian’s testimony before a Senate committee in 1976 later contributed to sweeping reforms and passage of U.S. laws against Americans and U.S. companies paying off foreign government officials.
His admission had dramatic political reverberations overseas. It led to the downfall of Japan’s ruling government, discredited the Dutch monarchy and set off official inquiries in Colombia, Turkey, Italy, West Germany and Saudi Arabia.
The Senate probe eventually revealed that payoffs, bribes and kickbacks had been part of doing business overseas for American companies for decades. While Lockheed and Kotchian received the brunt of the attention, more than 400 U.S. companies eventually admitted to paying foreign officials more than $700 million (more than $2.5 billion today).
In a memoir published only in Japan, Kotchian said Lockheed was a scapegoat and that the payoffs — common throughout the 1960s and early 1970s — were part of the way the “game” was played overseas. He maintained that no payoffs were made to American officials and no American laws were violated.
“If we were back in those times, I’d do it again,” Kotchian said in an interview with the Associated Press in 1978. “In present times, with the change in attitude and standards that are being applied now, I don’t think that I would.”
The scandal overshadowed a notable aviation career that spanned 35 years and paralleled Lockheed’s rise to become one of the biggest aerospace companies in the world. Kotchian was president of Lockheed before it merged with Martin Marietta Corp.
“He was a widely admired leader, a dynamic individual who greatly contributed to the growth of Lockheed over a very long period of time,” said Sherman Mullin, former president of Lockheed’s “Skunk Works” advanced development subsidiary.
In a Senate hearing in 1976, Kotchian said he had traveled to Japan in 1972 to try to interest the Japanese in the jetliner. He said he was approached twice within his first day in Tokyo for payoffs of 500 million yen, or $1.7 million.
He said he made payments to representatives who made “clear” the money would end up in the office of Japan’s then Prime Minister Kakuei Tanaka. Another was made to a consultant who said it was needed to gain the interest of an intimate of Tanaka, who was later convicted and sentenced to four years in jail stemming from Kotchian’s testimony. Lockheed eventually sold 21 planes, worth $430 million at the time.
In all, Kotchian said he made $12 million in payments to Japanese politicians and businessmen.
“If Lockheed had not remained competitive by the rules of the games as then played, we would not have sold the TriStar’s jumbo jet and would not have provided work for tens of thousands of our employees or contributed to the future of our corporation,” he said.