Posted on Fri, Jan. 23, 2009

ROBINS AIR FORCE BASE — A San Diego company plans a vigorous defense following Justice Department allegations that it “falsely certified” the properties of titanium it sold to aircraft parts manufacturers supplying flight-critical components to the Air Force and NASA.

According to court documents, approximately 7,900 parts made from “nonconforming” titanium were sold to the Defense Department including nine F-15 engine mounts shipped to Robins Air Force Base. Two F-15 aircraft at operational bases were also found with the allegedly defective mounts. The Warner Robins Air Logistics Center at Robins is the worldwide support agency for the Air Force’s F-15 fleet.

Parts for F-22, F-35 and F-18 fighters were also cited along with components for the C-17 cargo aircraft and an assembly for holding the telescope on NASA’s Kepler Spacecraft scheduled for launch this year.

The federal court of California’s southern district issued the eight-count indictment in December against Western Titanium Inc. and four company executives, including owner and chief executive officer Daniel Schroeder.

Robins officials would not discuss the case and referred all queries to Air Force Materiel Command and the Pentagon. The Air Force issued a statement saying it had been “aware of the matter since 2004” and had “taken appropriate steps to provide for the safety of airmen and aircraft.” They would not elaborate or answer additional questions.

Nancy Luque, a Sacramento, Calif.-based attorney representing Western Titanium, called the indictment the most “irresponsible she’s seen” in 30 years as a prosecutor and defense lawyer.

“Western Titanium doesn’t make parts. We operate on purchase orders,” she said during a Wednesday interview. “We don’t know what the titanium is going to be used for. We supply material to the oil and gas industry and for other industrial uses. We provide manufacturers what they ask for.”

The indictment charges the company with “knowingly and intentionally” misrepresenting the quality of titanium sold to parts manufacturers and directing testing agencies “to conduct testing specifically designed to manipulate results” in order to “falsely demonstrate the strength, mechanical and chemical properties of the titanium supplied.”

Assistant U.S. Attorney Stacey Sullivan expects a mid-summer trial date.

“There is a status hearing for pretrial motions on Feb. 6,” she said by telephone from San Diego.

She said titanium concerns were first reported to the Air Force by Boeing in 2004, although the indictment alleges the misrepresentation had been going on since 2002.

At issue is compliance with military specification MIL-T-9046 that supposedly requires a rolled plate process. The indictment charges Western with “substituting a forged bar material” and certifying to “Merco Manufacturing Company, Inc., Shuur Metals and other buyers of titanium” that the product “met the specification of MIL-T-9046.”

Merco is a parts supplier to Boeing, a major source of components for Air Force aircraft. Titanium supplied to Shuur was used to build the Kepler Spacecraft parts for NASA.

In the April 2008 search warrant affidavit, Boeing materials specialist Keith Meyer testified that rolling titanium alloy creates a grain direction that makes the finished material uniquely resistant to metal fatigue and cracking.

“Titanium made with a forging process results in different properties and the strength of the metal is diffused throughout the finished product,” Meyer testified.

Luque argued that rolled versus forged is largely a difference without a distinction.

“Rolled or forged is not the issue,” she said. “It’s the numbers (from lab tests of the finished product), the strength, the properties.”

Boeing issued an alert in 2004 indicating that some parts it was receiving from suppliers were made from forged, not rolled titanium. Luque said she believes Boeing took the action because the requirements under military specification 9046 were unclear.

“If the spec was so clear, why did Boeing do that?” she asked. “Of course it wasn’t clear. The specification could be interpreted as rolled, but an entire industry was interpreting it a different way. Everybody relied on the argument that it didn’t matter. ... Suppliers broadly cross-certified both rolled and forged titanium until 2004.”

The Sacramento attorney said Western Titanium asked for a meeting with Boeing in 2004.

“We wanted to know what the issue was,” she said. “If titanium was being provided to Boeing, we were going to honor what they wanted.”

Luque said the indictment is additionally flawed because her client sold both types of titanium.

“We have it now and we had it then,” she said. “If Merco wanted rolled titanium, why wouldn’t we have sold it to them? We had it. The truth is we provided what the purchaser asked for.”

The veteran litigator sees little possibility of an out-of-court settlement.

“My client is livid and demanding a trial,” she said. “He wants to clear his name and the company’s name. There will be no guilty plea or plea bargain. No way. Not Western or Dan Schroeder.”

To contact Gene Rector, call 923-3109, extension 239.