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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

#11

Post by wlkr »

The linked DOJ report has far more detail [0]. On the penalties themselves:

According to court documents, SPI has agreed to plead guilty to one count of mail fraud, and SEI has entered into a deferred prosecution agreement (DPA) in connection with a criminal information filed today charging the company with mail fraud. As part of the plea agreement, SPI has agreed to pay $34.1 million in combined restitution to NASA, the Department of Defense’s Missile Defense Agency (MDA), and commercial customers. SPI has also agreed to forfeit $1.8 million in ill-gotten gains. The plea agreement remains subject to acceptance by the court at a plea hearing currently scheduled for May 13, 2019, before U.S. District Judge Liam O’Grady. The DPA with SEI is conditioned on the court’s acceptance and SPI’s satisfaction of the plea agreement’s terms.

SPI also agreed to pay $34.6 million as part of a related civil settlement to resolve its liability under the False Claims Act for causing a government contractor to invoice MDA and NASA for aluminum extrusions that did not comply with contract specifications. Government contractors purchased aluminum extrusions for use on rockets for NASA and missiles provided to the MDA. Under the terms of the civil settlement agreement, SPI will satisfy the $34.6 million settlement through credits totaling $23.6 million for its restitution payments as part of the criminal plea agreement, plus additional payments of $6 million to NASA and $5 million to the MDA.

[0]: https://www.justice.gov/opa/pr/aluminum-extrusion-manufactur...

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

#12

Post by vectorEQ »

mobilefriendly wrote: post #4
j-pb wrote: post #2

It's amazing how companies in the US can cause a billion in damage, wasting years of highly talented people, put climate science years behind, and get a slap on the wrist. Yet, some kid carries a few grams of weed and goes to jail or gets killed by the cops.

Seriously, how is the penalty only $46 million? Should be multiple billions of dollars. And the employees who faked the tests should be in prison.

it's really hard to push onto employees as it's hard to determine if they were acting on their own or being pressured into doing such things. (as even acting on one's own can be motivated by unhealthy stress or such things which can be outside of their control / responsibility.)

that being said, for the incurred loss, 46 million is tiny.

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

#13

Post by naringas »

the best thing is how the "company" (or corporation) is to blame.

so none of the actual individual humans who did this is at fault here. at worst they would be fired and go to work somewhere else. which is compeletely fine.

and with a fine like that, this is just a "cost of doing business" for the corporation.

maybe one day terribly criminal corporations should be forcefully disbanded as punishment.

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

#14

Post by TheBeardKing »

j-pb wrote: post #2

It's amazing how companies in the US can cause a billion in damage, wasting years of highly talented people, put climate science years behind, and get a slap on the wrist. Yet, some kid carries a few grams of weed and goes to jail or gets killed by the cops.

Exactly, I can't believe no one was sent to prison over this.

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

#15

Post by TheBeardKing »

iidop wrote: post #10
wil421 wrote: post #6

Earlier quoted context omitted.

I’m not suggesting prison but some kind of charge, even if it’s a misdemeanor, is needed. Whoever faked the test result needs a record that would hopefully follow them. Would you rather hire someone who was busted with a small amount of drugs or someone who faked test results for NASA?

Destruction of $700m property due to negligence certainly seems jailworthy to me. At the very least, this company should be paying a fine which actually recovers the damages.

Negligence? That's outright fraud.

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

#16

Post by rayiner »

j-pb wrote: post #2

It's amazing how companies in the US can cause a billion in damage, wasting years of highly talented people, put climate science years behind, and get a slap on the wrist. Yet, some kid carries a few grams of weed and goes to jail or gets killed by the cops.

Both of your assertions are exaggerations.

1) It is far from certain that the falsified test results "cause[d] a billion in damage." Press releases about settlements are not court judgments. At trial, the government would have to prove "but-for causation." For one of the failures, for example, the government would have to prove that the launch vehicle's faring would have opened fully had the aluminum met specifications. If the government cannot prove that, they recover zero. Even if the government proved that, if anything else went wrong in the launch too, it would have to rebut the defendant's case that some other component, not the out-of-spec aluminum, was the primary cause of the launch failure.

2) It's not typical for "kid[s]" to be put in prison for carrying "a few grams of weed." It might happen sometimes (in a country of 330 million people, everything that can happen will happen sometimes) but it's not typical.

The government settles cases for a reason. Often, it's because the case isn't a slam dunk for trial. Sometimes, it's because the company wouldn't be able to pay the judgment anyway. In government contracting, there is also the consideration that if you put a company out of business for something that was the fault of lower-level employees (as here), that reduces competition going forward. (There's probably not a ton of options for space-worthy aluminium fabrication.)

(Conversely, the government usually settles drug cases on very favorable terms because they're easy to prove at trial. You should see the police reports that accompany these plea agreements. "The accused tried to sell drugs to an undercover officer. After arrest, the officers searched his car and found more drugs. Then they searched his house and found still more drugs. A search of the accused's text messages revealed extensive records of drug sales." In such cases, the government has no need to put an expert on the witness stand to convince the jury what would have happened to a rocket launch in a counter-factual scenario.)

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

#17

Post by thanksgiving »

vectorEQ wrote: post #12
mobilefriendly wrote: post #4

Earlier quoted context omitted.

Seriously, how is the penalty only $46 million? Should be multiple billions of dollars. And the employees who faked the tests should be in prison.

it's really hard to push onto employees as it's hard to determine if they were acting on their own or being pressured into doing such things. (as even acting on one's own can be motivated by unhealthy stress or such things which can be outside of their control / responsibility.) that being said, for the incurred loss, 46 million is tiny.

Personally, I think it should be the board + CEO who goes to prison when it is a corporation that does something like this. Don't trust someone enough? Don't hire!

Disclosure: My ulterior motive is that I think corporations are way too big and also I found the Sun Tzu story of killing a general very interesting.

> Sun Tzu said: "If words of command are not clear and distinct, if orders are not thoroughly understood, then the general is to blame." So he started drilling them again, and this time gave the order "Left turn," whereupon the girls once more burst into fits of laughter. Sun Tzu: "If words of command are not clear and distinct, if orders are not thoroughly understood, the general is to blame. But if his orders ARE clear, and the soldiers nevertheless disobey, then it is the fault of their officers."

> So saying, he ordered the leaders of the two companies to be beheaded. Now the king of Wu was watching the scene from the top of a raised pavilion; and when he saw that his favorite concubines were about to be executed, he was greatly alarmed and hurriedly sent down the following message: "We are now quite satisfied as to our general's ability to handle troops. If We are bereft of these two concubines, our meat and drink will lose their savor. It is our wish that they shall not be beheaded." Sun Tzu replied: "Having once received His Majesty's commission to be the general of his forces, there are certain commands of His Majesty which, acting in that capacity, I am unable to accept." Accordingly, he had the two leaders beheaded, and straightway installed the pair next in order as leaders in their place. When this had been done, the drum was sounded for the drill once more; and the girls went through all the evolutions, turning to the right or to the left, marching ahead or wheeling back, kneeling or standing, with perfect accuracy and precision, not venturing to utter a sound.

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

#18

Post by chrismeller »

Expez wrote: post #9

Wonder if Hydro in turn will file criminal charges. They bought the business unit at fault here in 2000[1]. Surely they could hold someone accountable for fraud that way? They thought they bought a business capable of producing quality parts, but didn't end up getting that. Like the other posters in this thread I feel like the $46m fine shouldn't be the end of this. [1] https://www.hydro.com/no-NO/media/news/2019/hyd…

I think that's why it was only $46m... Sure they agreed to take on responsibility for any prior debts and obligations as part of the purchase, but at this point you're not really punishing the people who were responsible for it, just those who were left holding the bag.

I'm not sure what legal recourse Hydro has against the prior owners, executives, managers, etc. that were actually responsible, but 19 years after the acquisition I'd be surprised if anything ever came of it.

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

#19

Post by writeslowly »

j-pb wrote: post #2

It's amazing how companies in the US can cause a billion in damage, wasting years of highly talented people, put climate science years behind, and get a slap on the wrist. Yet, some kid carries a few grams of weed and goes to jail or gets killed by the cops.

A lab supervisor did go to prison over this last year, and it looks like there were charges against someone else

https://www.oregonlive.com/portland/2018/08/company_supervis...

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

#20

Post by pbhjpbhj »

dade_ wrote: post #8
amelius wrote: post #5

Did they buy it on Amazon?

No, but I am sure the negative reviews would have raised concern before 16 years had passed.

You mean the incredibly high level of 5-star positive reviews: which seems to be how you tell crappy products in Amazon nowadays.
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