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About POGO's Federal Contractor Misconduct Database (FCMD)

The government awards contracts to companies with histories of misconduct such as contract fraud and environmental, ethics, and labor violations. In the absence of a centralized federal database listing instances of misconduct, the Project On Government Oversight (POGO) is providing such data. We believe that it will lead to improved contracting decisions and public access to information about how the government spends hundreds of billions of taxpayer money each year on goods and services. Report an instance of misconduct »

Lockheed Martin

Federal Election Law Violation

Date: 08/21/2006 (Date of FEC Announcement)

Misconduct Type: Ethics

Enforcement Agency: FEC

Contracting Party: None

Court Type: Administrative

Amount: $27,000

Disposition: Fine

Synopsis: The Federal Election Commission imposed a civil penalty of $27,000 on Lockheed Martin Employee’s PAC for failing to accurately account for and report disbursements and failing to disclose receipts. The committee failed to accurately disclose operating expenditures as a result of an embezzlement scheme perpetrated by Kenneth Phelps, a deputy manager and treasurer for the PAC. Phelps pleaded guilty in July 2007 to wire fraud and making false statements to the FEC. He admitted that from about January 2002 until December 2003, he took approximately $160,000 in Lockheed PAC checks and wrote the checks to himself instead of to federal political candidates or campaigns and deposited those checks into his personal bank account. In October 2007, Phelps was sentenced to 16 months in prison and ordered to pay $163,116 in restitution and a special assessment of $2,400. Lockheed's PAC, which collects donations from employees, is among the most active defense contractor political action committees. See related misconduct instance, “Embezzlement of PAC Funds.”