The Facts about the Night Vision Case

A look at what happened and how ITT is working to make sure it never happens again.

 

On March 28, ITT pleaded guilty to sending classified materials overseas and misleading the government, and agreed to pay $100 million in fines and additional investments. The news reports that followed communicated the seriousness of the issue. There is absolutely no question that the issue is serious. 

What is also serious is our commitment to preserve and protect vital U.S. technology in our defense business. And in that regard, there were significant inaccuracies and characterizations in some of the initial news reports that were not aligned with the facts of the case.

To shed more light on the matter, here are answers to the questions that are on the minds of many ITT employees.

What are the facts of the case?
 A night vision goggle is made from 400 parts and process steps. Some years ago, technical specifications for a light interference filter, one of the many parts for our night vision goggles, were improperly sent to an outside supplier in the U.K. Also, ITT employees attempted to source a few parts overseas without first obtaining export approval from the U.S. Department of State. In short, we were not vigilant regarding the laws and appropriate clearances needed for the export of the specifications and appeared to try to mislead the government when it investigated the issue. These are serious lapses and we accept responsibility.

Did ITT sell night vision goggles to China?
 No. ITT has never sold any military technology or sensitive information to China or any other non-approved country. This case is largely based on the transfer of technical information -- not equipment -- as we tried to find a source for parts.

"In no way does that mitigate the seriousness of the violation," says Steve Loranger, ITT's chairman, president and chief executive officer. "What we did was wrong. But we want to be clear about what actually happened."

Some reports are saying that our actions could put U.S. soldiers in jeopardy. Is that true?
The heart of our night vision technology -- the tube itself -- is secure. Technical information regarding the tube was never compromised, and without this technology, it would be impossible for someone to reverse engineer our night vision goggles. We take our role in supporting the military very seriously and feel confident that our actions -- while wrong -- did not put our soldiers in harm’s way or compromise national security.

"We have seen no evidence that any of the technology we transferred to an outside supplier is being used against U.S. or allied soldiers," says Steve Gaffney, president of ITT's Defense Electronics & Services group, which includes the Night Vision business.  

Did ITT cooperate with this investigation?
Yes. We have cooperated with the government in its investigation through numerous voluntary disclosures and sharing of information. 

How does this violation impact ITT?
As part of the plea agreement, ITT agreed to pay a $50 million penalty, and to invest an additional $50 million in research and development for future night vision technologies. Our Night Vision business will be somewhat limited in future international sales with select parties for the next year. However, we will continue to supply night vision technology to our U.S. military customers and other nations allied with the U.S. just as we have in the past. No other Defense Value Centers are affected by the limitation.

What is ITT doing to build a more compliant culture?
ITT has put a number of actions into motion to enhance its compliance capabilities and awareness. The company has expanded its training programs, put together a dedicated corporate compliance team, strengthened the corporate ombudsperson's role and activated a compliance review board at multiple levels within the company. Employees will be hearing more about all of this in the weeks and months to come.

We all have accountability to make the right decisions when called upon to do so. Our leaders have responsibility to create an environment where issues will be raised before they turn into problems. Employees should raise any concerns about issues that they see. Defense export rules and regulations are complex and if your job requires that you deal with export licenses, you should ask questions when something is unclear and bring questions and issues to the surface immediately. The law takes into account that mistakes happen, but it is critical that any mistakes get reported promptly and within the guidelines set by the U.S. government.

"In my experience here, ITT employees have always strived to do the right thing. This incident makes clear that a few employees made mistakes, and it reminds us that we must be vigilant about our own actions. Our employees must feel free to speak up if we see other people taking actions that might not be legal or ethical," says Loranger.

Can ITT employees do anything to help the company restore its reputation?
This episode shows very clearly how the wrong actions of a few people can tarnish the reputation of a whole company and all of the people who work for it. Every ITT employee must use this moment as a time for renewed commitment to our ethical culture. 

"How we conduct ourselves moving forward is very important," says Loranger. "By dedicating ourselves to doing the right thing always, and participating fully with all the training and tools now available, we can move past this unfortunate chapter in ITT's history and remind the world about the vital work we do in advancing human progress."