Nevada defense contractor settles whistleblower’s suit

Scott Sonner

Tuesday, March 7, 2000 | 3:47 a.m.

RENO, Nev. - A Nevada defense contractor agreed Tuesday to pay $320,000 to settle a whistleblower's claims that the company failed to adequately test electronic parts sold to NASA and the Pentagon.

Maxwell-Sierra of Carson City, a division of the San Diego-based Maxwell Technologies, sold the parts to the Defense Department and NASA for a number of military and aerospace programs in the early 1990s.

An employee of the company who first reported the alleged improper testing of the parts in a whistleblower complaint will receive $48,000 of the settlement, the Justice Department said in a statement Tuesday.

The company denied the allegations in negotiations spanning nearly seven years, but finally agreed to the settlement, filed in federal court in Reno this week.

"This arises out of a situation that occurred under prior management," said Mike Sund, vice president for communications for Maxwell Technologies.

"The company has decided it is best to put this behind us by agreeing to this settlement with the government," he said from San Diego Tuesday.

"We are committed to the highest standards and reliability for all of our components."

Scott Peterson, a technician who worked on quality assurance for Sierra-Maxwell in Carson City, filed the lawsuit against the company in U.S. District Court in Reno in 1994.

He filed it under provisions of the False Claims Act that allow a whistleblower to seek damages on behalf of the U.S. government and receive a portion of any settlement.

The Justice Department later joined the suit.

"Today's settlement is an example of the Justice Department's determination to insure that the government is compensated for overcharging on government contracts," said David W. Ogden, acting assistant U.S. attorney general for the civil division.

Peterson alleged that the company and five of its employees failed to test or improperly tested capacitors and filters - key electronic components in a number of military and aerospace systems.

Many of the components were required to be manufactured and tested in accordance with detailed military specifications, Justice Department spokesman Charles Miller said Tuesday.

There was never any allegation that the parts were faulty. But the federal government ended up paying the company for testing that allegedly was not conducted, Miller said.

"They did not adhere to the full aspects of the contract," he said.