Word: toshiba
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Dates: during 1980-1989
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Thus when Soviet officials dropped new hints about buying banned equipment from Toshiba Machine in 1979 and 1980, the Japanese company's president ordered his export sales manager to "do what had to be done to get the business," the report says. That launched more than a year of globe hopping and clandestine meetings between Toshiba executives and Soviet officials, who eventually hatched a scheme to slip altered equipment past Japan's export watchdog, the Ministry of International Trade and Industry...
...secret shipments, Toshiba Machine disguised eight sophisticated milling machines as simple hole-boring devices and rechristened them with misleading jargon (in one case, from a model MBP 110 to a TDP 70/110) to fool MITI inspectors. When Toshiba had brought Soviet officials to its plant to see the machines work, engineers demonstrated only the simple functions during normal working hours, then later showed off the equipment's true capacity when the plant was deserted, the report claims. The secrecy extended even to accounting: Toshiba Machine allegedly split the proceeds from one shipment into two semiannual periods to avoid drawing attention...
...when a disgruntled Japanese trading-company employee who helped with the sale wrote a whistle-blowing statement that found its way to MITI. The agency's initial probe made no headway, since Toshiba Machine's executives stuck so uniformly to their phony story. Inside the company, a full-scale cover-up was under way, in which employees incinerated documents by tossing them into factory furnaces. When the allegations were finally leaked to the press last March, MITI was compelled to send the police, who grilled employees until the truth emerged...
Despite all the tawdry details, the report may help Toshiba quell anger in Washington, since the probe concludes that the subterfuge was confined to the company's machine-tool subsidiary. Congress is considering several proposals that would impose sanctions, the most severe of which would ban Toshiba's exports to the U.S. for as long as five years (potential annual loss: $2.8 billion). Other companies may soon join Toshiba in the spotlight, for the increasingly vigilant Japanese government is said to be investigating some 20 firms it suspects of violating the country's technology-export laws...
Megahouses spread across the landscape. -- The Government helps a Texas bank stay afloat. -- A look inside the Toshiba scandal...