Risk Management

PAC Man Heads Behind Bars

The ex-treasurer of Lockeed Martin’s political action committee wrote checks to himself and forged the signatures of executives who had sign-off au...
Stephen TaubOctober 24, 2007

A former Lockheed Martin finance employee who oversaw the company’s political action committee was sentenced to 16 months in prison for stealing $160,000 and lying to a government agency.

Kenneth Phelps III, who was deputy manager and treasurer for Lockheed’s PAC, had pled guilty in July to 12 counts of wire fraud and 12 counts of making false statements to the Federal Election Commission. He was ordered to pay $163,000 in restitution and to serve three years of supervised release upon completing his prison term.

Phelps admitted that from around January 2002 through early December 2003, he wrote Lockheed Martin Employees’ PAC checks to himself instead of to federal political candidates or campaigns. He then forged the signatures of two Lockheed PAC executives who, unlike himself, had signatory authority and deposited those checks into his personal bank account, according to an announcement by Assistant Attorney General Alice Fisher.

The checks were in amounts commonly associated with federal political contributions made by the Lockheed PAC. He also used the PAC’s computer system to change the payee information for each check he wrote to himself to make it appear it had actually been written to a federal political candidate or campaign.

In addition, Phelps concealed the existence of these payments from the Federal Election Commission by electronically transmitting on behalf of Lockheed PAC and from its office in Arlington, Va., 12 required filings to the FEC’s office in Washington, D.C., that contained false information concerning the true recipient of the checks.