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> In Italy, Luigi Gui lost his job as Minister of the Interior. He had been Defense Minister in 1970, when the Italian government bought 14 C-130 transports from Lockheed for $60 million despite protests from opposition politicians that Italian-made planes were just as effective and cost less. Now a Lockheed memo, made public by the Church subcommittee, discloses that in 1970 the company paid $2.2 million to Italian agents, who passed on "more than 85%" of it to government officials. The reason, according to Lockheed Vice Chairman and Chief Operating Officer Carl Kotchian: "An Italian Senator" told a Lockheed consultant that unless the payments were made, no Lockheed planes would be bought. Normally, Gui would have been included in the new Cabinet named last week by Prime Minister Aldo Moro to end a five-week government crisis; he was left out at his own request so that he can try to clear his name. Whether he can do so or not, the scandal will hardly help the shaky Christian Democratic Cabinet maintain itself against the growing political power of the Communist Party.
> In Colombia, the government is investigating references in Lockheed records that indicate that at least two air force generals falsified the country's defense needs in return for Lockheed commissions that the Church subcommittee calculated to total $200,000. The references are contained in a letter written in 1968 by a Lockheed agent in Bogotá to Lockheed's Georgia office when Colombia was ready to buy a third Lockheed Hercules transport for about $2 million. The agent assured his superiors that even though the Colombian military budget was being cut, the air force officers could "justify the true necessity for more equipment in order to guarantee the national security." Then he added: "Just between you and me, this is not exactly true—as you can imagine—but the important point for us is that they [the generals] want sugar [a common term for payoffs], and for that they are ready to do almost anything." If that is true, the scheme would tend to bear out one of the ugliest suspicions of business critics: corporate bribery encourages poor nations to spend cash on military equipment they do not really need.
Along with these revelations came some less grave—but still nasty—ones. In Hong Kong, Cathay Pacific Airways fired its director of flight operations, E.B. ("Bernie") Smith. Only two weeks ago, he was pictured in four-color ads in U.S. magazines, describing Lockheed's Super-TriStar as "the most intelligent aircraft I've ever flown." But Cathay Pacific found that Smith was the official identified in Church subcommittee documents as receiving $80,000 in Lockheed money from an "unidentified British agent living in France." He got the payment for helping Lockheed sell planes to other lines.
In the U.S., too, the damning Lockheed revelations have touched off profound repercussions. Says a Church subcommittee staffer: "This is the first time this thing is being taken seriously at the White House, the Treasury and the Federal Reserve. People are saying, 'Oh my God, we can't let it go on.' "