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Chinese Takeout: Powered by Pratt & Whitney

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sinodefence.com

The Chinese Z-10 attack helicopter

Vladimir Ilyich Lenin probably never uttered or wrote this quote often attributed to him:

The Capitalists will sell us the rope with which we will hang them.

Unfortunately, you can’t say the same thing about the Justice Department, which said this Thursday:

PWC’s [Pratt & Whitney Canada Corp.’s] illegal conduct was driven by profit.

Battleland has been covering overseas helicopter sales since the late Al Haig was shadily peddling Sikorsky choppers to Ferdinand Marcos in the Philippines (both Pratt & Whitney and Sikorsky are owned by United Technologies Corp.).

The Justice Department statement Thursday about Pratt’s dealings with the Chinese is breath-taking, both in its greedy deeds and the subsequent coverup:

According to court documents, PWC knew from the start of the Z-10 project in 2000 that the Chinese were developing an attack helicopter and that supplying it with U.S.-origin components would be illegal. When the Chinese claimed that a civil version of the helicopter would be developed in parallel, PWC marketing personnel expressed skepticism internally about the “sudden appearance” of the civil program, the timing of which they questioned as “real or imagined.” PWC nevertheless saw an opening for PWC “to insist on exclusivity in [the] civil version of this helicopter,” and stated that the Chinese would “no longer make reference to the military program.” PWC failed to notify UTC or HSC about the attack helicopter until years later and purposely turned a blind eye to the helicopter’s military application…

According to court documents, PWC’s illegal conduct was driven by profit.  PWC anticipated that its work on the Z-10 military attack helicopter in China would open the door to a far more lucrative civilian helicopter market in China, which according to PWC estimates, was potentially worth as much as $2 billion to PWC.

These companies failed to disclose to the U.S. government the illegal exports to China for several years and only did so after an investor group queried UTC in early 2006 about whether PWC’s role in China’s Z-10 attack helicopter might violate U.S. laws.  The companies then made an initial disclosure to the State Department in July 2006, with follow-up submissions in August and September 2006.

The 2006 disclosures contained numerous false statements.  Among other things, the companies falsely asserted that they were unaware until 2003 or 2004 that the Z-10 program involved a military helicopter.  In fact, by the time of the disclosures, all three companies were aware that PWC officials knew at the project’s inception in 2000 that the Z-10 program involved an attack helicopter.

Today, the Z-10 helicopter is in production and initial batches were delivered to the People’s Liberation Army of China in 2009 and 2010. The primary mission of the Z-10 is anti-armor and battlefield interdiction. Weapons of the Z-10 have included 30 mm cannons, anti-tank guided missiles, air-to-air missiles and unguided rockets…

“Due in part to the efforts of these companies, China was able to develop its first modern military attack helicopter with restricted U.S. defense technology. As today’s case demonstrates, the Justice Department will spare no effort to hold accountable those who compromise U.S. national security for the sake of profits and then lie about it to the government,” said Assistant Attorney General [for National Security Lisa] Monaco.

The company has agreed to pay more than $75 million as part of a global settlement with the Justice Department and State Department in connection with the China arms export violations, and for making false and belated disclosures to the U.S. government about these illegal exports. “We accept responsibility for these past violations and we deeply regret they occurred,” UTC CEO Louis Chênevert said.

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