Lockheed's Commission Payments to Obtain Foreign Sales

PSAD-77-85: Published: Mar 15, 1977. Publicly Released: Mar 15, 1977.

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Some aspects of the Lockheed Aircraft Corporation's foreign sales commission payments were examined to determine whether commissions were improperly charged to government contracts, the impact of disclosure of payments on sales, and the existence of outstanding commitments to foreign officials. Since disclosure of the payments, Lockheed has taken action to institute more effective controls.

There was no evidence that questionable foreign payments were improperly charged to government contracts. With the exception of uncertainties associated with potential sales to Japan, there was no evidence that disclosure had adverse effect on current or future foreign sales. In Japan, there may have been effects on the market potential of an antisubmarine warfare aircraft program and the execution of orders for TriStar aircraft. There were outstanding commitments to international consultants for commissions totalling about $48 million as of June 30, 1975, but Lockheed has refused to make payment to an official of a foreign government-owned company and the case is now in litigation. Questionable foreign marketing practices were considered symptomatic of similar actions by other corporations and initiatives are underway in Congress and executive agencies to deal with this matter.

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