US firm admits selling copter parts to China

WASHINGTON - Reuters

US Attorney David B. Fein speaks at a news conference in Bridgeport, Conn. AP photo

United Technologies Corp on June 28 admitted selling China software that helped Beijing develop its first modern military attack helicopter, one of hundreds of export control violations over nearly two decades.

At a federal court hearing in Bridgeport, Connecticut, United Technologies and its two subsidiaries, Pratt & Whitney Canada and Hamilton Sundstrand Corp, agreed to pay more than $75 million to the U.S. government to settle criminal and administrative charges related to the violations.

As part of the settlement, Pratt & Whitney Canada pleaded guilty to two federal criminal charges - violating a U.S. export control law and making false statements.

Federal prosecutors said the company knew that its export of modified software to China would allow Beijing to test and develop its new military helicopter, called the Z-10, using 10 engines that had been legally exported as commercial items.

They said the company harmed national security while trying to gain access to China’s lucrative civilian helicopter market.

“P&WC exported controlled U.S. technology to China, knowing it would be used in the development of a military attack helicopter in violation of the U.S. arms embargo with China,” said U.S. Attorney David Fein of Connecticut.

“P&WC took what it described internally as a ‘calculated risk,’ because it wanted to become the exclusive supplier for a civil helicopter market in China with projected revenues of up to $2 billion,” Fein said.

The case comes amid growing U.S. concerns about China’s military expansion and escalating electronic espionage.

Federal authorities have brought five major cases since last February, involving everything from drone technology to radiation-hardened computers used in satellite communications.

United Technologies said it accepted full responsibility for the violations and deeply regretted that they had occurred. It said it had spent $30 million and hired more than 1,000 full and part-time employees to beef up its internal export oversight.

“These violations revealed important opportunities to strengthen our export compliance program,” United Technologies Chief Executive Louis Chenevert said in a statement, adding that both the Justice and State departments had recognized the company’s “significant remedial actions.”