Carl Kotchian
Encyclopedia
Archibald Carl Kotchian known as Carl or A.C., was an American business executive who served as the president of Lockheed Corporation
. His admission of paying millions of dollars
in bribes to foreign government officials led to the jailing of Japan's prime minister and political upheaval in several countries in the 1970s.
Kotchian was born on July 17, 1914 in Kermit, Divide County, North Dakota
and grew up in Long Beach, California
, attending Long Beach Junior College (now known as Long Beach City College
). He later attended Stanford University
, where he received an undergraduate degree and a Master of Business Administration
.
Kotchian, a Certified Public Accountant
worked for Price Waterhouse in Los Angeles. He was hired in 1941 by Vega Airplane Company, a subsidiary of Lockheed Aircraft. At Lockheed, he supervised the firm's surge in aircraft production during World War II
. He established the firm's manufacturing site in Marietta, Georgia
, which became the primary production location for the C-130 Hercules
cargo plane and later for the F-22 Raptor
fighter. He became president of Lockheed in 1967, a period in which the firm produced the C-5 Galaxy
cargo plane and the SR-71 Blackbird
spy plane for the U.S. military and the L-1011 TriStar
jet for the commercial market.
Development of the L-1011 began in the late 1960s, during Kotchian's presidency, and was started without any firm orders. In 1971, the United States government provided a $250 million loan to help bail the firm out of mounting development costs for military programs and for the L-1011. In testimony before the United States Senate
in 1976, Kotchian described how he had met with government officials in Japan and made payoff of 500 million yen
, the equivalent of US$1.7 million, part of a total of US$12 million in payments to Japanese politicians and businessmen that led to the sale of 21 L-1011 aircraft by Lockheed, then worth US$430 million. Prime Minister of Japan
Kakuei Tanaka
was ultimately convicted of accepting a bribe, one of many notable Japanese politicians who were involved in the scandal.
In his Senate testimony, Kotchian disclosed that Lockheed paid $1.1 million in the early 1960s to a Dutch
official later identified as Prince Bernhard
, husband of Queen Juliana of the Netherlands in his role as inspector general of the Military of the Netherlands
. After the revelations, the prince stepped down from his military position.
In a 1977 profile in The New York Times
, Kotchian reflected his bitterness at the Lockheed directors who ousted hims as chief operating officer and vice chairman in March 1976 based on his $38 million of what the board called "questionable payments". Kotchian described that he felt that
A resident of Palo Alto, California
, Kotchian died at age 94 on December 14, 2008. He had been married to the former Lucy Elizabeth Carr who had died in 2002.
Lockheed Corporation
The Lockheed Corporation was an American aerospace company. Lockheed was founded in 1912 and later merged with Martin Marietta to form Lockheed Martin in 1995.-Origins:...
. His admission of paying millions of dollars
Lockheed bribery scandals
The Lockheed bribery scandals encompassed a series of bribes and contributions made by officials of U.S. aerospace company Lockheed from the late 1950s to the 1970s in the process of negotiating the sale of aircraft....
in bribes to foreign government officials led to the jailing of Japan's prime minister and political upheaval in several countries in the 1970s.
Kotchian was born on July 17, 1914 in Kermit, Divide County, North Dakota
Divide County, North Dakota
-Major highways:* U.S. Highway 85* North Dakota Highway 5* North Dakota Highway 40* North Dakota Highway 42- Places of interest :Two petroglyphs are displayed at Writing Rock State Historical Site in Writing Rock Township.-Demographics:...
and grew up in Long Beach, California
Long Beach, California
Long Beach is a city situated in Los Angeles County in Southern California, on the Pacific coast of the United States. The city is the 36th-largest city in the nation and the seventh-largest in California. As of 2010, its population was 462,257...
, attending Long Beach Junior College (now known as Long Beach City College
Long Beach City College
Long Beach City College, established in 1927, is a community college located in Long Beach, California. It is divided into two campuses. The Liberal Arts Campus, known as LAC, is located in the residential community of the Lakewood Village section of Long Beach, on Carson Street west of Clark Avenue...
). He later attended Stanford University
Stanford University
The Leland Stanford Junior University, commonly referred to as Stanford University or Stanford, is a private research university on an campus located near Palo Alto, California. It is situated in the northwestern Santa Clara Valley on the San Francisco Peninsula, approximately northwest of San...
, where he received an undergraduate degree and a Master of Business Administration
Master of Business Administration
The Master of Business Administration is a :master's degree in business administration, which attracts people from a wide range of academic disciplines. The MBA designation originated in the United States, emerging from the late 19th century as the country industrialized and companies sought out...
.
Kotchian, a Certified Public Accountant
Certified Public Accountant
Certified Public Accountant is the statutory title of qualified accountants in the United States who have passed the Uniform Certified Public Accountant Examination and have met additional state education and experience requirements for certification as a CPA...
worked for Price Waterhouse in Los Angeles. He was hired in 1941 by Vega Airplane Company, a subsidiary of Lockheed Aircraft. At Lockheed, he supervised the firm's surge in aircraft production during World War II
World War II
World War II, or the Second World War , was a global conflict lasting from 1939 to 1945, involving most of the world's nations—including all of the great powers—eventually forming two opposing military alliances: the Allies and the Axis...
. He established the firm's manufacturing site in Marietta, Georgia
Marietta, Georgia
Marietta is a city located in central Cobb County, Georgia, United States, and is its county seat.As of the 2010 census, the city had a total population of 56,579, making it one of metro Atlanta's largest suburbs...
, which became the primary production location for the C-130 Hercules
C-130 Hercules
The Lockheed C-130 Hercules is a four-engine turboprop military transport aircraft designed and built originally by Lockheed, now Lockheed Martin. Capable of using unprepared runways for takeoffs and landings, the C-130 was originally designed as a troop, medical evacuation, and cargo transport...
cargo plane and later for the F-22 Raptor
F-22 Raptor
The Lockheed Martin/Boeing F-22 Raptor is a single-seat, twin-engine fifth-generation supermaneuverable fighter aircraft that uses stealth technology. It was designed primarily as an air superiority fighter, but has additional capabilities that include ground attack, electronic warfare, and signals...
fighter. He became president of Lockheed in 1967, a period in which the firm produced the C-5 Galaxy
C-5 Galaxy
The Lockheed C-5 Galaxy is a large military transport aircraft built by Lockheed. It provides the United States Air Force with a heavy intercontinental-range strategic airlift capability, one that can carry outsize and oversize cargos, including all air-certifiable cargo. The Galaxy has many...
cargo plane and the SR-71 Blackbird
SR-71 Blackbird
The Lockheed SR-71 "Blackbird" was an advanced, long-range, Mach 3+ strategic reconnaissance aircraft. It was developed as a black project from the Lockheed A-12 reconnaissance aircraft in the 1960s by the Lockheed Skunk Works. Clarence "Kelly" Johnson was responsible for many of the...
spy plane for the U.S. military and the L-1011 TriStar
Lockheed L-1011
The Lockheed L-1011 TriStar, commonly referred to as the L-1011 or TriStar, is a medium-to-long range, widebody passenger trijet airliner. It was the third widebody airliner to enter commercial operations, following the Boeing 747 and the McDonnell Douglas DC-10. Between 1968 and 1984, Lockheed...
jet for the commercial market.
Development of the L-1011 began in the late 1960s, during Kotchian's presidency, and was started without any firm orders. In 1971, the United States government provided a $250 million loan to help bail the firm out of mounting development costs for military programs and for the L-1011. In testimony before the United States Senate
United States Senate
The United States Senate is the upper house of the bicameral legislature of the United States, and together with the United States House of Representatives comprises the United States Congress. The composition and powers of the Senate are established in Article One of the U.S. Constitution. Each...
in 1976, Kotchian described how he had met with government officials in Japan and made payoff of 500 million yen
Japanese yen
The is the official currency of Japan. It is the third most traded currency in the foreign exchange market after the United States dollar and the euro. It is also widely used as a reserve currency after the U.S. dollar, the euro and the pound sterling...
, the equivalent of US$1.7 million, part of a total of US$12 million in payments to Japanese politicians and businessmen that led to the sale of 21 L-1011 aircraft by Lockheed, then worth US$430 million. Prime Minister of Japan
Prime Minister of Japan
The is the head of government of Japan. He is appointed by the Emperor of Japan after being designated by the Diet from among its members, and must enjoy the confidence of the House of Representatives to remain in office...
Kakuei Tanaka
Kakuei Tanaka
was a Japanese politician and the 64th and 65th Prime Minister of Japan from 7 July 1972 to 22 December 1972 and from 22 December 1972 to 9 December 1974 respectively...
was ultimately convicted of accepting a bribe, one of many notable Japanese politicians who were involved in the scandal.
In his Senate testimony, Kotchian disclosed that Lockheed paid $1.1 million in the early 1960s to a Dutch
Netherlands
The Netherlands is a constituent country of the Kingdom of the Netherlands, located mainly in North-West Europe and with several islands in the Caribbean. Mainland Netherlands borders the North Sea to the north and west, Belgium to the south, and Germany to the east, and shares maritime borders...
official later identified as Prince Bernhard
Prince Bernhard of Lippe-Biesterfeld
Prince Bernhard of Lippe-Biesterfeld , later Prince Bernhard of the Netherlands, was prince consort of Queen Juliana of the Netherlands and father of six children, including the current monarch Queen Beatrix....
, husband of Queen Juliana of the Netherlands in his role as inspector general of the Military of the Netherlands
Military of the Netherlands
The Armed forces of the Netherlands consist of the Army, Navy, and Air Force.The service branches consist of:* Koninklijke Landmacht , Royal Netherlands Army....
. After the revelations, the prince stepped down from his military position.
In a 1977 profile in The New York Times
The New York Times
The New York Times is an American daily newspaper founded and continuously published in New York City since 1851. The New York Times has won 106 Pulitzer Prizes, the most of any news organization...
, Kotchian reflected his bitterness at the Lockheed directors who ousted hims as chief operating officer and vice chairman in March 1976 based on his $38 million of what the board called "questionable payments". Kotchian described that he felt that
Lockheed has become the scapegoat for 300 companies that the S.E.C. said were doing the same thing, and Haughton and I are the scapegoats for the scapegoat.... Some call it gratuities. Some call them questionable payments. Some call it extortion. Some call it grease. Some call it bribery. I look at these payments as necessary to sell a product. I never felt I was doing anything wrong.
A resident of Palo Alto, California
Palo Alto, California
Palo Alto is a California charter city located in the northwest corner of Santa Clara County, in the San Francisco Bay Area of California, United States. The city shares its borders with East Palo Alto, Mountain View, Los Altos, Los Altos Hills, Stanford, Portola Valley, and Menlo Park. It is...
, Kotchian died at age 94 on December 14, 2008. He had been married to the former Lucy Elizabeth Carr who had died in 2002.