Pentagon Lifts Buying Ban, VSI Discloses

VSI Corp., which three weeks ago pleaded guilty to falsifying test results for aircraft nuts and bolts made at its Chatsworth plant, said the Pentagon has agreed to resume buying from the plant.

The military’s Defense Logistics Agency lifted a suspension, imposed a year ago, that banned the company’s Voi-Shan plant from selling its products--called fasteners in the industry--directly to the government, VSI said.

The plant was not idle, however. VSI, a Torrance-based unit of Fairchild Industries Inc. that also has a plant in Redondo Beach, continued selling fasteners to commercial aircraft companies such as Boeing Co., said Donald S. Parker, VSI’s general counsel. Also, the Pentagon kept buying products made at other VSI plants.

“We believe the DLA’s action confirms that our house is in order at the Chatsworth plant,” Ben W. Prescott, the newly appointed president of Fairchild Fastener Group, which includes VSI, said in a statement.

On May 11, VSI pleaded guilty in U.S. District Court in Seattle to four counts of falsifying and omitting test results for fasteners. It agreed to pay $18 million in a civil settlement and to cover fines and the cost of prosecution. Two former VSI employees also pleaded guilty to conspiracy to defraud the government.

The criminal charges grew out of a civil suit that three former Voi-Shan employees filed in 1988. The former workers are expected to receive an as-yet-undecided percentage of the $14.5 million in civil penalties paid by VSI.

Federal authorities have said there is no evidence that any airline tragedy resulted from bad fasteners made by VSI.