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Nasa Says Metals Fraud Caused $700M Satellite Failure

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Re: Nasa Says Metals Fraud Caused $700M Satellite Failure

#101

Post by sara123226 »

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Re: Nasa Says Metals Fraud Caused $700M Satellite Failure

#102

Post by rhexs »

morsmodr wrote: post #98

Not to stoke a fire, but I just wondered how the same failure would be viewed if it was done by a Chinese or Indian Manufacturer. Immediately it would have reinforced a stereotype of outsourcing being cheap and that being the issue. When in reality the truth is that there are frauds, lazy and useless people everywhere on the planet.

Hopefully viewed even worse as the question would then be "why is NASA outsourcing spacecraft critical component construction to India/China?".

Re: Nasa Says Metals Fraud Caused $700M Satellite Failure

#103

Post by souterrain »

gnode wrote: post #92
JumpCrisscross wrote: post #68

Earlier quoted context omitted.

> rationale for not pursuing the company for the full $700 million dollars lost escapes me Satellites are usually insured. (Not sure about NASA protocol, though.) If that’s the case, the insurer will sue. Shareholder lawsuits will also, naturally, follow, as will suits from all the other customers. Agree, though, that it’s shocking nobody is going to jail in relation to a fraud guilty plea.

> it’s shocking nobody is going to jail in relation to a fraud guilty plea. They are though. From the justice.gov article: "Dennis Balius, the SPI testing lab supervisor, led a scheme to alter tests within SPI’s computerized systems and provide false certifications with the altered results to customers. Balius also instructed employees to violate other testing standards, such as increasing the speed of the testing ma…

And what conditions imposed by Mr. Balius' leadership contributed to this situation?

I'd like to see the federal debarment applied to all individuals within the company's executive team. There's nothing preventing them from perpetrating the same fraud tomorrow by forming a new corp or LLC. Having them named on a debarment will stop them from committing fraud against the American taxpayer in the future.

Re: Nasa Says Metals Fraud Caused $700M Satellite Failure

#104

Post by gnode »

JohnGB wrote: post #83

Why wouldn't the QC at NASA include testing at independent labs for anything mission critical? That seems like a failure on NASA's part as much as it is fraud by the supplier.

It may be that actually fully stressing the parts is avoided, as it may risk weakening the part.

I've heard of various non destructive testing methods being used to check the integrity of metals in aerospace, such as ultrasound and radiography. This may well be enough if the part is actually made of what it's supposed to be.

Re: Nasa Says Metals Fraud Caused $700M Satellite Failure

#105

Post by shkkmo »

gnode wrote: post #92
JumpCrisscross wrote: post #68

Earlier quoted context omitted.

> rationale for not pursuing the company for the full $700 million dollars lost escapes me Satellites are usually insured. (Not sure about NASA protocol, though.) If that’s the case, the insurer will sue. Shareholder lawsuits will also, naturally, follow, as will suits from all the other customers. Agree, though, that it’s shocking nobody is going to jail in relation to a fraud guilty plea.

> it’s shocking nobody is going to jail in relation to a fraud guilty plea. They are though. From the justice.gov article: "Dennis Balius, the SPI testing lab supervisor, led a scheme to alter tests within SPI’s computerized systems and provide false certifications with the altered results to customers. Balius also instructed employees to violate other testing standards, such as increasing the speed of the testing ma…

But you can send the executives who designed or oversaw a reward and evaluation schema that incentived this kind of behavior.

Instead, we seem pretty comfortable with passing off the responsibility to rank and file employees / middle managers while the majority of the benefits from the bad behavior accrue to the executives and shareholders.

Edit: I get that the criminal intent needed under our current laws means that those charges may not be feasible. That just means we need new laws that hold Executives and Managers criminally responsible for the criminal actions of their subordinates that are committed as part of their work duties.

Re: Nasa Says Metals Fraud Caused $700M Satellite Failure

#106

Post by weberc2 »

jahabrewer wrote: post #75
tyingq wrote: post #41

Interesting. Extruded aluminum profile is one of the items that is under anti-dumping tariffs to discourage Chinese imports. There's a lot of rhetoric from US suppliers like this one about why we need high quality US aluminum.

We need to build with high-quality American fakes, not high-quality Chinese fakes!

On the other hand, at least the American supplier was fined and someone went to prison. Fraudulent Chinese suppliers routinely escape justice altogether because they largely operate outside of US jurisdiction.

Re: Nasa Says Metals Fraud Caused $700M Satellite Failure

#107

Post by chias »

brianpgordon wrote: post #39
pseudolus wrote: post #24

Earlier quoted context omitted.

The deferred prosecution agreement essentially means that as long as the SEI adheres to the financial terms of the plea agreement the government will eventually drop the charges [0]. That's an amazing deal in its generosity and I'm sure that the financial penalties levied are outweighed by the financial gain realized over the years of their fraudulent activity. The rationale for not pursuing the company for the full…

This is a worthwhile book that might help clear up some of your bewilderment at why corporate crime cases so often turn out so unsatisfactorily. https://www.amazon.com/Chickenshit-Club-Department-Prosecute... My personal TL;DR from a couple of years ago if you don't have the time to read the book: - It's very hard for prosecutors to secure a criminal conviction even in the most blatant cases of wrongdoing. - Prosecut…

> There's intense political pressure to not punish shareholders for management's misdeeds

Rightly so, IMO. I invest almost exclusively in index funds, which means there's a good chance I'm a shareholder and don't even know it. I like to think that it wouldn't make sense for me to be held responsible.

Re: Nasa Says Metals Fraud Caused $700M Satellite Failure

#108

Post by weberc2 »

zackmorris wrote: post #85

As Nasa is a government agency, I wonder if lack of regulation and oversight played a hand in this. This sort of scenario is exactly why I'm concerned about the recent trend towards rampant free market economics and libertarianism. Those ideas have merit in certain situations, but also increase risk to the public as witnessed here by losses that are proportionately much higher than any efficiency savings. I'm also co…

Honest questions:

1. Is there any compelling evidence that this incident is attributable to "free market economics"? It seems equally possible that it's attributable to notoriously poor incentive structures in government agencies. In my view it seems most likely that it's neither, in this particular case.

2. Is there evidence that there is a "recent trend towards rampant free market economics and libertarianism"? Again, this is an honest question; I've not seen a claim like this made before.

Re: Nasa Says Metals Fraud Caused $700M Satellite Failure

#109

Post by rhizome »

abakker wrote: post #99
gnode wrote: post #92

Earlier quoted context omitted.

> it’s shocking nobody is going to jail in relation to a fraud guilty plea. They are though. From the justice.gov article: "Dennis Balius, the SPI testing lab supervisor, led a scheme to alter tests within SPI’s computerized systems and provide false certifications with the altered results to customers. Balius also instructed employees to violate other testing standards, such as increasing the speed of the testing ma…

>because it isn't a human. This is especially interesting in the context of corporate personhood[1]. You can't send a corporation to jail, but you can disband it entirely, or prevent it from operating. A lot of the practical solutions try to leave badly behaving company operating, though, since if we shut them down there is a lot of collateral damage in the form of lost productivity in the economy and lost jobs. IANA…

As far as that goes, I'd be willing to start with implementing standards for execution and working back from there. I haven't looked it up, but I imagine this is how law enforcement evolved in humans.

Re: Nasa Says Metals Fraud Caused $700M Satellite Failure

#110

Post by morsmodr »

rhexs wrote: post #102
morsmodr wrote: post #98

Not to stoke a fire, but I just wondered how the same failure would be viewed if it was done by a Chinese or Indian Manufacturer. Immediately it would have reinforced a stereotype of outsourcing being cheap and that being the issue. When in reality the truth is that there are frauds, lazy and useless people everywhere on the planet.

Hopefully viewed even worse as the question would then be "why is NASA outsourcing spacecraft critical component construction to India/China?".

Damn, did not think of that #facePalmToMyself. Yeah, such things shouldn't be outsourced
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