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Hughes' Ex-Chief Cleared : Probe: The Justice Department closes its bribery investigation of Albert D. Wheelon in connection with satellite contracts.

August 28, 1992|RALPH VARTABEDIAN | TIMES STAFF WRITER

After a five-year investigation, the Justice Department has closed its bribery probe of former Hughes Aircraft Chairman Albert D. Wheelon without bringing any charges, the agency acknowledged Thursday.

Wheelon was suddenly ousted in 1988 by General Motors, which owns Hughes, ostensibly because of a federal investigation into whether the company or its executives paid bribes to win commercial satellite contracts.

By closing the case, the Justice Department is implicitly clearing Wheelon, a physicist widely credited with establishing Hughes as the world leader in communications satellites, of any wrongdoing.

Earlier this year, former Hughes Vice President Paul Visher pleaded guilty to federal charges that he funneled illegal payments to an international satellite consortium that was considering the purchase of Hughes satellites during the mid-1980s.

The Justice Department found evidence that Visher had forged signatures on reports to cover up the crime. But the case against Visher apparently revealed no evidence that Wheelon had approved or knew about the payments, according to sources familiar with the investigation.

"That investigation is over with," said Harry Benner, an assistant U.S. attorney in Washington who handled the case. "The outcome is that no other indictments were filed."

Wheelon, now retired in Los Angeles, declined to comment, but many of his associates said they always doubted that the executive, known to his friends as "Bud," would have been involved in a fraud conspiracy.

"In no way would Bud Wheelon ever be a party to cooking up a bribe to get business," said Simon Ramo, founder of TRW and Wheelon's friend. "It's absurd to imagine, inconceivable. I couldn't be more confident of that than if it had been my mother."

Former Secretary of State Henry A. Kissinger added: "He is a man of enormous rectitude and superior intelligence. I was stunned when I heard of these allegations. I would be really amazed if he were guilty of any moral wrongdoing."

The case against Wheelon had many parallels to the charges brought in the late 1980s against James Beggs, who was ousted as administrator of the National Aeronautics and Space Administration after he was indicted.

The case against Beggs was eventually dropped, but only after the government admitted its indictment was based on a complete misunderstanding of a contractual issue at Beggs' prior employer, General Dynamics. The Justice Department later wrote an apology to Beggs, but his career had been destroyed, Beggs said in an interview at the time.

Since leaving Hughes, Wheelon has joined the board of Aerospace Corp. in El Segundo, the systems engineer for the Air Force's large space organization. Throughout his career, Wheelon has been at the center of the nation's space satellite efforts.

Wheelon spent 15 years as president of the Hughes space and communications group in El Segundo, a period in which Hughes came to dominate the world market for communications satellites. The unit is now a cornerstone for the firm's rapidly growing global communications business.

Before his arrival at Hughes in 1966, Wheelon served for four years as deputy director of the Central Intelligence Agency, in charge of its science and technology efforts. In that capacity, Wheelon helped formulate the agency's photographic reconnaissance satellite program, a bulwark in the Cold War.

Wheelon, who holds a doctorate in physics from the Massachusetts Institute of Technology, is also writing a book on optical physics.

Why GM pushed Wheelon out of his job has never been made clear, but those who knew him at Hughes said his frank and outgoing management style put him at odds with GM's auto executives in Detroit. GM also forced out former Hughes Vice Chairman Richard Alden a few weeks before Wheelon's departure.

During the turmoil, GM officials leaked the fact that the Justice Department was investigating the satellite issue, implying that Wheelon was caught up in the probe. At the time, the Justice Department had issued a subpoena seeking documents containing Wheelon's name.

Visher was also forced out at about the same time. In a 1988 interview published in The Times, Visher said that Wheelon did not know about the payments. But Visher later changed his story in depositions and tried to implicate Wheelon, according to evidence the Justice Department obtained.

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