By Carlo Muñoz - 08/07/12 07:44 PM EDT
Committee chairman Sen. Carl Levin (D-Mich) and ranking member Sen. John McCain (R-Ariz.) requested specifics on the relationship between United Technologies and the company's efforts to help China build a new attack helicopter.
United Technologies (UTI) and their subsidiaries were fined $75 million by the Justice Department after it was found to have violated a number of U.S. export control laws over decades as part of their cooperation with the Chinese military.
Top officials from United Technologies and its two subsidiaries, Pratt & Whitney Canada and Hamilton Sundstrand Corp., admitted to providing sensitive weapons technologies to China to assist with the country's ongoing weapons development work.
Company officials were also required to pay $55 million as part of a separate deal reached with the State Department, which oversees international military sales, as part of UTI's deal with the U.S. government.
While an isolated incident, Levin and McCain said the case showcased the "widespread nature of these violations by just this one major defense contractor raises the possibility of systemic deficiencies with the oversight and enforcement of federal export controls," according to the letter.
That said, both Senators want the Pentagon and State Department to provide insight on how both departments plan to cooperate in the future "to ensure compliance with [export control] requirements."
Such cooperation will be critical as DOD and American defense firms look to expand its sales of U.S. military hardware to allied militaries across the globe, particularly as U.S. defense budgets continue to decrease.
But that kind of pressure to maintain a company's bottom line, in the face of draconian budget reductions at the Pentagon, could set the stage for another UTI-like case in the near future.
"There could be a tendency to do that," defense analyst and former DOD chief of international programs Frank Cevasco told The Hill in July, shortly after UTI's plea deal with Justice officials.
Currently, the Defense Department is managing a $500-billion budget cut over the next decade, as a result of last year's debt reduction deal struck in Congress.
However, that number could double to $1 trillion in cuts, if lawmakers cannot come up with a plan to avoid the deep defense spending cuts under the so-called sequestration plan.
With international sales the only real revenue option available to U.S. defense firms, mid-level industry officials could be tempted to circumvent or break outright federal restrictions on international weapons sales "in the interest of [bolstering] sales," often times without the knowledge of the company's leadership, Cevasco said at the time.
While Cevasco noted the tendency to exploit export control loopholes could increase in the coming years, American defense firms are likely to become more vigilant against such breaches in light of the UTI case.
The U.S. defense industry might now see "a bit of self correction" within its offices that handle international sales, seeing the recent UTI case as "a bit of a wake up call," he added.