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| Down Under |
| Australian Defence employee linked to spy scandal |
| 2005-11-16 |
| AN Australian defence employee has become embroiled in an international espionage scandal involving the alleged sale of top-secret American B-2 Stealth bomber technology to foreign powers. Defence Materiel Organisation officer Arthur Lazarou, a retired Royal Australian Navy lieutenant commander, is the subject of an internal Defence investigation over his links to American engineer Noshir Gowadia, who was charged late last month with disclosing military secrets - which could be "used to cause injury" to the US - to representatives from eight foreign governments and corporations. Although prosecutors have not disclosed the identity of the foreign interests involved, US media reports named China as among those countries that acquired the Stealth secrets. Indian-born Gowadia, 61, is described as having played a "crucial" role in developing the B-2 Stealth bomber while a design engineer at Northrop Corporation, where he worked for 18 years. He was instrumental in the creation of a classified defence system that makes aircraft "virtually invulnerable to attack" by making them "invisible" to infra-red heat-seeking missiles. Mr Lazarou, 44, was hired a fortnight ago by the DMO to work as a project management coach at Defence Department headquarters - just days after Gowadia was arrested by FBI agents at his Hawaiian mansion. Company records show Gowadia and Mr Lazarou are listed as joint directors and shareholders in the Canberra-based company, NTech Australia Pty Limited. The company, registered to Mr Lazarou's home address and set-up in mid-2001, is one of two companies US prosecutors allege were used to launder the proceeds of the sale of the military secrets which funded Gowadia's lavish lifestyle. US Assistant Attorney Ken Sorenson yesterday said the Canberra shelf company and another related entity in the tax haven of Lichtenstein were central to the alleged espionage case. "There are two corporations that are involved in the case, NTech A (Australia) is, of course, Australian and NTech E (Equipment), which is based in Europe," he said. "It (NTech Australia) was a corporate identity that Gowadia worked through for reasons that we suspect are not all together legitimate." Last week a US federal grand jury returned a six count indictment against Gowadir. Three counts allege he broke federal law by "wilfully communicating national defence information to persons not entitled to receive it" from three unidentified countries. The remaining three counts accuse him of violating the Arms Export Control Act. He faces up to 10 years' jail on each count. DMO deputy chief executive Norm Gray, said he did not know if there were any links between Ntech Australia and the FBI's allegations involving Gowardia. He said Mr Lazarou had been upfront about his association with Ntech and Mr Gowadia both before and after the American's arrest. "He has offered full assistance to the Defence Security Authority." "When he applied for the job he declared his association with Ntech before Gowadia was arrested." It is understood Mr Lazarou, a qualified aeronautical engineer, has handed over all relevant company documents to the DSA and maintains that the company has not traded since it was set up by Mr Gowadia four years ago in a failed attempt to win defence funding for a hi-tech electronic warfare project. Under the plan, funding of $2 million to $3 million under Defence's concept technology demonstrator program would have allowed Ntech to develop new technology with the aim of commercial production. "We could not reach agreement with him in the intellectual property or on price," Mr Gray said. While Defence insisted on owning the intellectual property generated by the project, Mr Gowadia wanted total control, he said. Contract negotiations were terminated in late 2002. "The bottom line is that he set up an Australian company and we could not reach agreement on the contract." At least eight foreign governments and corporations are alleged to have received "top-secret" documents and briefings involving the stealth technology, as well as classified information Mr Gowadia gleaned from his work at the Los Alamos National Laboratory in New Mexico - the home of the US nuclear development program. A US Federal Court hearing last week rejected Mr Gowadia's bid to be released on bail, ruling he was a "flight risk" because of a history of secret overseas trips and numerous foreign connections. After initially denying the allegations, Mr Gowadia has since allegedly admitted he passed on highly classified information "verbally, in papers, computer presentations, letters and other methods to individuals in foreign countries". "Gowadia admitted he provided classified information to approximately eight named countries," according to US Federal Court documents obtained by The Australian. "At that time, I knew it was wrong and I did it for the money," Mr Gowadia allegedly said in an October 14 statement to the FBI. It is alleged Mr Gowadia may have been selling military secrets from as far back as 1999. Mr Sorenson declined to disclose Australia's possible involvement in the scandal because "it is an on-going investigation" or whether Gowadia had travelled to Australia. "There is not much I can say about Australia or the many other countries involved in the case," he said. According to the documents, Mr Gowadia admitted he knew the information he was selling was classified. "The reason I disclosed this classified information was to establish the technological credibility with the potential customers for future business," he allegedly told investigators. Mr Lazarou could not be reached for comment. A Defence Department spokesman last night said as the matter was the subject of an internal investigation no further comment would be offered. Mr Sorenson said he was not aware of any foreign law enforcement officials being brought into the investigation and that it was "too early" to indicate whether charges would be laid outside the US. Australian Government sources said local military officials have begun discussions with their American counterparts. |
| Posted by:Oztralian |