GE Subsidiary Pays $6.58 Million After Whistleblower Says It Sold Bad Fuel Tanks

The Department of Justice is reporting that a General Electric Co. will pay $6.58 million to settle a False Claims Act lawsuit stemming from extremely serious allegations by a whistleblower. The whistleblower says that a GE subsidiary made fuel tanks for Navy Hornets that did not meet the Government’s specs. In fact, in quality control testing, at least one tank failed.

As a whistleblower lawyer, I don’t think allegations get any more serious than that. With an aircraft, of course, just about every part is critical, but it would be hard to think of a part that is more critical than the fuel tank.

According to the DOJ press release, General Electric Aviation Systems (GEAS), a GE subsidiary, had a contract to manufacture fuel tanks for the Department of Defense. The fuel tanks were intended for military aircraft, specifically for the Navy F/A-18 Hornet.
Jeffrey Adler, a former GEAS employee, filed a whistleblower lawsuit under the FCA, informing the Government that the Hornet fuel tanks did not meet contract specifications and were not being subjected to adequate quality control. (In the FCA lingo, Adler is known as a ‘relator.’)

One of the external fuel tanks manufactured by GEAS failed government testing in March 2008. An investigation led the U.S. to conclude that GEAS was not complying with the contract’s specifications and was not following the quality control procedures it was supposed to be following. Ultimately the investigation led to questions about a total of 641 EFTs that had been delivered between 2005 and 2008.

According to DOJ’s press release, the settlement also addressed a second set of allegations. GEAS was accused of failing to inspect “drag beams” that were destined for Army UH-60 Blackhawk helicopters. According to a student handout from the Army Aviation Warfighting Center, a helicopter drag beam “transmits landing loads to the airframe and shock strut.” The Government said that the drag beams did not conform to the contract’s specifications.

The most frightening thing about this case is that GEAS may have been jeopardizing the lives of U.S. soldiers. The U.S. Attorney for the Central District of California, Andre Birotte Jr., says that the fact that the hardware did not meet the contract specifications “could have put our service members at risk.” Birotte warned contractors against thinking they can “cut corners” and get away with it.

GEAS is located in Ohio, and the whistleblower filed his lawsuit there. Thus, the U.S. Attorney for the Southern District of Ohio also was involved in the investigation and settlement. In the press release, Carter Stewart vowed his office would use the False Claims Act “to protect the integrity of the system that provides goods and services” to our military.

The Department of Justice noted that, in addition to the two U.S. Attorneys’ offices, a number of different agencies were involved in the investigation. The Defense Contract Management Agency, Defense Contract Audit Agency, Defense Criminal Investigative Service and the Navy Criminal Investigative Service all were involved in the investigation.

Although GE paid the United States $6.58 million to settle the case, it did not admit any wrongdoing.

I cannot think of a more important thing for a whistleblower to do than to report something that may end up saving a life. I recently settled a case for a whistleblower who reported that a manufacturer had used out-of-date material when it manufactured the outside rubber layers to go on sonar nose cones on Naval frigates. In the course of investigating the case, I learned that the outer rubber layer is extremely important to the functioning of the sonar, because it contains a chemical that is designed to reduce the growth of barnacles and other marine life that might interfere with clear sonar reception.

Our Armed Forces lay their lives on the line for us; at a very minimum they deserve to be sure that the equipment we give them is not defective.