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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

Embezzlement of PAC Funds

Date: 10/23/2007 (Date of Sentencing)

Misconduct Type: Ethics

Enforcement Agency: FEC

Contracting Party: None

Court Type: Criminal

Amount: $165,516

Disposition: Pleaded Guilty

Synopsis: Kenneth D. Phelps III, the former deputy manager and treasurer for Lockheed Martin Employee’s PAC, pleaded guilty to wire fraud and making false statements to the Federal Election Commission. 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. In August 2006, the FEC imposed a civil penalty of $27,000 on the Lockheed Martin PAC for failing to accurately account for and report disbursements and failing to disclose receipts, oversights that were caused by Phelps’ conduct. See related Lockheed Martin misconduct instance, “Federal Election Law Violation.”