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No one apparently told Hazeltine, which professes astonishment at learning that Lackner was in effect on its payroll. "We never heard of him," says a company spokesman. Indeed, there would have been reason to question the deal if it had been known. Although Lackner told TIME he was hired to help on the IFF contract, he readily admits he has no expertise about the devices.
What Lackner did have was even more valuable. In about 1971, while working for Northrop, he had met Stuart Berlin, then and now a Navy civil servant. They formed a close friendship that continued as Berlin rose to become a contracting official at the Naval Air Systems Command -- working on, among other things, IFF.
For a while, all went well. A source who was involved says that Lackner supplied Hazeltine, through Parkin, with invaluable "market intelligence" on the Navy's needs for IFF gear, much of the information either internal or leaked before it was supposed to be made public. (Hazeltine denies receiving any inside dope.) Parkin, says TIME's source, did not bother to ask Lackner where he was getting his stuff; perhaps he did not want to know. Lackner acknowledges getting information about IFF from Berlin, but contends that he broke no laws.
That is what the FBI wants to determine. Two weeks ago, agents armed with search warrants showed up at the offices of Hazeltine, Parkin, Lackner and Berlin to pore through their papers. A search warrant directed them to look for "bank accounts of Berlin in which payments from Lackner may have been deposited in connection with his criminal activities pertaining to Government contracts."
Lackner denies any criminal activities and says, "I never paid him ((Berlin)) anything." But he does not seem to have convinced the FBI. The agents who searched his home and office, Lackner told TIME, grilled him extensively about supposed payments to Berlin and played for him several secretly taped recordings of his telephone conversations. One call was placed by Lackner to Berlin from Parkin's house. Lackner insists he was only trying to arrange to have a cup of coffee with Berlin. Nonetheless, Berlin has been reassigned, and the uproar has held up the award of the IFF contract. Parkin and Lackner have both been subpoenaed to testify before a grand jury that begins meeting in Alexandria next month to delve further into the contracting scandals.
If the FBI can prove there was an exchange of money for secret information, it will be a classic example of the most spectacular part of the Ill Wind mess. One clue to the kind of information often sought: FBI agents searched the Washington office of William Tallia, vice president of Pratt & Whitney, on the authority of a search warrant alleging that the company had copies of sensitive documents filed with the Pentagon by archcompetitor General Electric. Both companies were selling engines for the Air Force F-18 fighter and the Navy's V-22 tilt-rotor aircraft.
In a briefing for Congressmen last week, U.S. Attorney Henry Hudson disclosed that he is probing the awards of 75 to 100 contracts, worth "tens of billions" of dollars. That might even be an understatement. Just one of those contracts, calling for McDonnell Douglas and General Dynamics to build the advanced tactical aircraft for the Navy, could be worth at least $45 billion.