
Nasa Says Metals Fraud Caused $700M Satellite Failure - pseudolus
https://www.bloomberg.com/news/articles/2019-05-01/nasa-says-aluminum-fraud-caused-700-million-satellite-failures
======
wlkr
The linked DOJ report has far more detail [0]. On the penalties themselves:

 _According to court documents, SPI has agreed to plead guilty to one count of
mail fraud, and SEI has entered into a deferred prosecution agreement (DPA) in
connection with a criminal information filed today charging the company with
mail fraud. As part of the plea agreement, SPI has agreed to pay $34.1 million
in combined restitution to NASA, the Department of Defense’s Missile Defense
Agency (MDA), and commercial customers. SPI has also agreed to forfeit $1.8
million in ill-gotten gains. The plea agreement remains subject to acceptance
by the court at a plea hearing currently scheduled for May 13, 2019, before
U.S. District Judge Liam O’Grady. The DPA with SEI is conditioned on the
court’s acceptance and SPI’s satisfaction of the plea agreement’s terms.

SPI also agreed to pay $34.6 million as part of a related civil settlement to
resolve its liability under the False Claims Act for causing a government
contractor to invoice MDA and NASA for aluminum extrusions that did not comply
with contract specifications. Government contractors purchased aluminum
extrusions for use on rockets for NASA and missiles provided to the MDA. Under
the terms of the civil settlement agreement, SPI will satisfy the $34.6
million settlement through credits totaling $23.6 million for its restitution
payments as part of the criminal plea agreement, plus additional payments of
$6 million to NASA and $5 million to the MDA._

[0]: [https://www.justice.gov/opa/pr/aluminum-extrusion-
manufactur...](https://www.justice.gov/opa/pr/aluminum-extrusion-manufacturer-
agrees-pay-over-46-million-defrauding-customers-including)

~~~
pseudolus
The deferred prosecution agreement essentially means that as long as the SEI
adheres to the financial terms of the plea agreement the government will
eventually drop the charges [0]. That's an amazing deal in its generosity and
I'm sure that the financial penalties levied are outweighed by the financial
gain realized over the years of their fraudulent activity. The rationale for
not pursuing the company for the full $700 million dollars lost escapes me.
The damages were entirely foreseeable.

[0] [http://www.mololamken.com/news-
knowledge-18.html](http://www.mololamken.com/news-knowledge-18.html)

~~~
JumpCrisscross
> _rationale for not pursuing the company for the full $700 million dollars
> lost escapes me_

Satellites are usually insured. (Not sure about NASA protocol, though.) If
that’s the case, the insurer will sue. Shareholder lawsuits will also,
naturally, follow, as will suits from all the other customers.

Agree, though, that it’s shocking nobody is going to jail in relation to a
fraud guilty plea.

~~~
gnode
> it’s shocking nobody is going to jail in relation to a fraud guilty plea.

They are though. From the justice.gov article:

"Dennis Balius, the SPI testing lab supervisor, led a scheme to alter tests
within SPI’s computerized systems and provide false certifications with the
altered results to customers. Balius also instructed employees to violate
other testing standards, such as increasing the speed of the testing machines
or cutting samples in a manner that did not meet the required specifications.
Balius pleaded guilty in July 2017 and was sentenced to three years in prison
and ordered to pay over $170,000 in restitution."

You can't send SPI to jail though, because it isn't a human.

~~~
abakker
>because it isn't a human.

This is especially interesting in the context of corporate personhood[1]. You
can't send a corporation to jail, but you can disband it entirely, or prevent
it from operating. A lot of the practical solutions try to leave badly
behaving company operating, though, since if we shut them down there is a lot
of collateral damage in the form of lost productivity in the economy and lost
jobs. IANAL, but my opinion is that there needs to be a better non-nuclear
option for an actual guilty conviction for corporations. As I understand it,
if a company actually goes to trial and is convicted, they are not allowed to
operate anymore, hence the plea deals and fines.

Please correct me if I am wrong, though.

[1][https://en.wikipedia.org/wiki/Corporate_personhood](https://en.wikipedia.org/wiki/Corporate_personhood)

~~~
elliekelly
> As I understand it, if a company actually goes to trial and is convicted,
> they are not allowed to operate anymore, hence the plea deals and fines.

You know, I am a lawyer (a corporate one who freelances as a white collar
crime journalist at that!) and I don't even know how this would work. I can't
even think of a single criminal case against a corporation that I've reported
on that went to trial. It just doesn't really come up. I suspect because it's
much easier to charge the directors of the corporation with racketeering or
fraud.

That being said, I can't imagine a criminal conviction of a corporation would
dissolve the entity. We don't execute people for committing fraud so I'd be
surprised if a judge would execute an entity. I'm also not sure what would
stop a corporation from quickly winding up if it seemed criminal charges were
on the horizon. After all, you can't charge a "person" with a crime if that
"person" isn't there to defend themselves.

~~~
fencepost
_you can 't charge a "person" with a crime if that "person" isn't there to
defend themselves_

Individuals charged with crimes are defended by attorneys without visibly
participating in their criminal trials all the time.

 _I can 't imagine a criminal conviction of a corporation would dissolve the
entity._

No need to dissolve it, simply place it under the same kind of restrictions
that someone in prison is placed under - no direct financial activity,
severely curtailed communications, etc.

~~~
elliekelly
> Individuals charged with crimes are defended by attorneys without visibly
> participating in their criminal trials all the time.

Lack of visible participation is far from lack of participation. In the US due
process requires the defendant's presence to commence a criminal trial. Once
charges have been brought the defendant has a right (that can in some
circumstances be waived) to attend and participate in every stage of the
trail. Barring a few narrow circumstances[1] once proceedings have commenced a
criminal trial _in absentia_ is unconstitutional.

[1][https://en.wikipedia.org/wiki/Trial_in_absentia#United_State...](https://en.wikipedia.org/wiki/Trial_in_absentia#United_States)

~~~
munk-a
I feel like if we were scaling this to a corporation then all shareholders
would potentially have a right to be present for the trial? There might
(terribly) be some sane precedent set prior to the 13th amendment regarding
the rights of slave owners to be present at trial for their slaves - I'm 100%
anti-slavery but it is the last instance I'm aware of that might yield light
on what rights legal persons who partially own other legal persons who have
been charged with a crime have.

Edited - reworded "persons" to "legal persons" in a few places.

~~~
elliekelly
This would be an interesting law school exam question :) Is there a de minimus
ownership that triggers a shareholders right to be present? Were slave owners
permitted to mount a defense on behalf of their accused slaves?

Post your question on r/legaladviceofftopic I bet you'll get some very
interesting answers...

~~~
dror
And this discussion demonstrates the absurdity of corporations = people. If
you prick it, does it bleed? If you tickle it, does it laugh? If you poison
it, does it die?

~~~
munk-a
So, this point bugs me. I am dead set against the decision to allow
corporations to participate in our political system but nobody has ever said
"So, mom, dad... this is Purdue Pharma - you can call him Fred for short -
we're uh, we're getting married!". Corporations aren't people, they aren't
human beings and they aren't homo-sapiens what they are is, quite accurately,
legal "persons" when it comes to how a lot of US laws are worded.

There are things that you do and a corporation do that a river can't do, and
to describe this set of things laws use the term "person" this makes sense but
the name is terrible. In the US, for instance, you can't sue a mountain if you
fall and hurt yourself - you can sue a mining company that left equipment
there, or maybe the national parks service for having unsafe trails or maybe
even your friend Fred (i.e. Purdue Pharma) for pushing you off the edge of the
cliff (maybe, more accurately, for failing to inform you of a dizziness side
effect in a medication they sold you that caused you to fall) but you can't
sue the mountain itself and, likewise, there is no way a mountain could be
punished that we can comprehend - again, maybe if this mountain is owned by
someone then, as a result of this suit, you are awarded partial mining rights
or ownership of the mountain - but that is a compensation granted at the loss
of some other entity, maybe a mining company, or the property owner or even
the US government.

Either way, corporations and human beings have some legal commonalities that
aren't shared with mountains.

elliekelly as you're actually a lawyer, can you express this better or clarify
it?

~~~
elliekelly
I think what you're getting at is the distinction between "persons" and
"natural persons." Typically when a law applies to "persons" (sometimes it
will say "legal persons") it applies to both corporations and humans for the
reasons you've mentioned above - we need to be able to sue them, tax them,
regulate them, etc. And when a law applies to "natural persons" it's intended
to apply only to humans which is why, as much as you might love Amazon, you
can't marry it. (So far no legal terminology to distinguish mountains that I'm
aware of... )

To your point, corporations have always had "rights." The government can't
just show up to your house and take your property without due process and,
because corporations are "legal persons," the government can't just show up to
company headquarters and take corporate property either. Corporations need
some of the legal rights we grant to natural persons or else the corporate
entity is pointless. But corporations also _can 't_ have the same rights as
natural persons or else every stock broker is also a slave trader.

The reason the Citizens United ruling was such a big deal was because the
court extended first amendment rights to corporations when those rights had
historically only been given to natural persons. If you get a chance you
should read the opinion because the rationale seems much more reasonable on
paper than it is in practice. Contrary to public opinion, the court didn't
rule that "corporations are people" (technically they always were) but rather
that corporations are _associations_ of natural persons and since natural
persons can form associations to exercise their first amendment rights then
they can form corporations to exercise their first amendment rights.

But for an entity whose purpose is to exist somewhere between human
(definitely a person) and mountain (definitely not a person) it doesn't make
sense to extend _all_ of the rights of personhood to that entity just as it
doesn't make sense to treat the entity the same way we treat a mountain.
Lawyers can form associations to practice law but we certainly wouldn't allow
a group to incorporate and have the entity sit for the bar exam... right?
Citizens United certainly muddied the water in where the law draws that line.

------
magicalhippo
When interviewing for a job at a company making pressure sensors primarily for
the oil industry, I got a look at their testing rooms. The sensors were
usually placed deep in some well or at the bottom of the ocean, so had to
function for ages without maintenance. Switching out a faulty sensor is either
_very_ expensive or impossible.

The final testing room had a window with a couch and table in the adjacent
room. The interviewer said most customers would have a representative fly over
to overlook the final tests in person before accepting the sensors.

~~~
dsfyu404ed
They missed a great opportunity to stick a porta power on the wall and let the
customer choose to apply the test pressure themselves. That says "we're so
confident it will work you can test it yourself."

------
naringas
the best thing is how the "company" (or corporation) is to blame.

so none of the actual individual humans who did this is at fault here. at
worst they would be fired and go to work somewhere else. which is compeletely
fine.

and with a fine like that, this is just a "cost of doing business" for the
corporation.

maybe one day terribly criminal corporations should be forcefully disbanded as
punishment.

~~~
_red
This is completely inaccurate. Corporate liability protection only extends to
civil financial issues, any real property crimes (ie. fraud, murder, etc)
'pierces the corporate veil' and ultimately are filed against the people who
performed it.

~~~
gpm
According to other comments here the company plead guilty to (criminal) fraud.
So no it is not completely inaccurate.

~~~
_red
See here: [https://www.legalmatch.com/law-library/article/corporate-
lia...](https://www.legalmatch.com/law-library/article/corporate-liability-
for-criminal-acts.html)

"When a corporation is criminally liable, the responsibility also falls on
individuals. The board of directors, officers, and other high-ranking
officials will almost always be criminally liable as well (just look at the
Enron fiasco). A individual can be held criminally liable for another
employee's illegal act under the accomplice liability theory."

------
nimbius
this kind of fraud is absolutely rampant in the automotive industry for
example.

Speaking from experience as an engine mechanic, Ive had to replace
transmission parts for a certain well-known japanese SUV maker. They also make
a "luxury" version of this SUV with more horsepower and a turbocharger setup.
The transmissions however are virtually identical with a very major exception:
the M5PVL transmission gear for the luxury SUV has 15% more nickel than the
non-luxury. These parts are not interchangeable, but shadier parts dealers
will often interchange them. placing the regular gear in the luxury SUV has
life-threatening consequences, and this has been documented in recall data
from the manufacturer.

under turbo-load, once the gear is engaged, it basically explodes. These
failures often exit the transmission case, breach the cockpit of the vehicle
and wound the occupants.

~~~
sk5t
I'm scratching my head as to the possible identity of the mystery SUV. Luxury
SUV, Japanese, uses a turbo... maybe the Acura RDX? And the transmission
housing is not stout enough to contain gear shrapnel?

~~~
izacus
Toyota / Lexus ?

~~~
universenz
He's referring to Toyota. They are globally recalling Toyota Corollas for
failing torque converters.
[https://www.cnet.com/roadshow/news/toyota-2019-corolla-
hatch...](https://www.cnet.com/roadshow/news/toyota-2019-corolla-hatchback-
recall-cvt-problems/)

Clearly Toyota didn't know it was happening in their supply chain, but now
they do.

~~~
tomatotomato37
That article is for CVT's, which don't use shiftable gears. Google-fu leads to
this forum post from 2009, which references Acura directly:

[https://hardware.slashdot.org/comments.pl?sid=1473068&cid=30...](https://hardware.slashdot.org/comments.pl?sid=1473068&cid=30382138)

~~~
hawaiian
Not to jump to any conclusions, but judging by the common user name, it seems
possible that that's the same poster as the GGGP.

------
Expez
Wonder if Hydro in turn will file criminal charges. They bought the business
unit at fault here in 2000[1]. Surely they could hold someone accountable for
fraud that way? They thought they bought a business capable of producing
quality parts, but didn't end up getting that.

Like the other posters in this thread I feel like the $46m fine shouldn't be
the end of this.

[1] [https://www.hydro.com/no-NO/media/news/2019/hydro-reaches-
ag...](https://www.hydro.com/no-NO/media/news/2019/hydro-reaches-agreement-
with-u.s.-department-of-justice/)

~~~
lotsofpulp
Only governments can file criminal charges.

~~~
shereadsthenews
As a blanket statement this is incorrect. Many common law jurisdictions permit
private prosecution of criminal cases.

~~~
will4274
> many

Isn't it basically just the UK?

~~~
shereadsthenews
Only if you think Canada and various American states are in the UK.

~~~
lotsofpulp
Where in the US can a non governmental entity charge someone with a crime?

~~~
shereadsthenews
Texas, Virginia, North Carolina, and Idaho among other jurisdictions.

~~~
lotsofpulp
Interesting, I wonder how that even works. Can anyone just "charge" someone
with a crime? I always thought the district attorney or someone similarly
qualified and presumably unbiased had to vet the evidence and decide whether
or not to charge someone.

------
taurusXL
Some relevant Wikipedia links that add color to the lost vehicles:

[https://en.wikipedia.org/wiki/Minotaur-C](https://en.wikipedia.org/wiki/Minotaur-C)

[https://en.wikipedia.org/wiki/Orbiting_Carbon_Observatory](https://en.wikipedia.org/wiki/Orbiting_Carbon_Observatory)

[https://en.wikipedia.org/wiki/Glory_(satellite)](https://en.wikipedia.org/wiki/Glory_\(satellite\))

[https://en.wikipedia.org/wiki/Orbital_Sciences_Corporation](https://en.wikipedia.org/wiki/Orbital_Sciences_Corporation)

------
tyingq
Interesting. Extruded aluminum profile is one of the items that is under anti-
dumping tariffs to discourage Chinese imports. There's a lot of rhetoric from
US suppliers like this one about why we need high quality US aluminum.

~~~
jahabrewer
We need to build with high-quality American fakes, not high-quality Chinese
fakes!

~~~
weberc2
On the other hand, at least the American supplier was fined and someone went
to prison. Fraudulent Chinese suppliers routinely escape justice altogether
because they largely operate outside of US jurisdiction.

~~~
ajross
That's the essence of the issue exactly. There is fraud everywhere, but in
most of the world fraud isn't a successful business model. In the PRC, it kind
of is.

~~~
neetdeth
Although fraud is no doubt rampant in Chinese industry, the penalties are...
rather more severe. You had better make sure your scheme doesn't piss off the
wrong people. The PRC's military and aerospace supply chains are probably in
pretty good shape.

~~~
weberc2
Agreed, but the scenario we’re discussing is a US company sourcing parts from
a Chinese company. The PRC’s stiff penalties don’t protect the consumer in
this scenario.

------
jve
SpaceX also had failed a mission due to a 3rd party strut failing the spec.

> The strut that we believe failed was designed and material certified to
> handle 10,000 lbs of force, but failed at 2,000 lbs, a five-fold difference.

[https://www.spacex.com/news/2015/07/20/crs-7-investigation-u...](https://www.spacex.com/news/2015/07/20/crs-7-investigation-
update)

~~~
T-A
A closer analogy was the Proton launch failure and subsequent suspension of
launches in 2017, after it turned out that Voronezh Mechanical Plant had
switched materials in the engines and falsified the documentation.

[https://arstechnica.com/science/2017/01/russia-recalling-
doz...](https://arstechnica.com/science/2017/01/russia-recalling-dozens-of-
rocket-engines-sacks-head-motor-builder/)

------
low_key
They really should be held accountable for the amount of loss that their fraud
caused, not just what they gained from the fraud.

~~~
pcurve
What they did was despicable but that's not really fair either. If defective
aluminum they sold was direct cause of 2 billion bridge collapse would they be
liable for that amount?

~~~
gibba999
Generally, yes.

Put yourself on the other side. Someone breaks into your house, steals a
painting and pawns it off for $500. Unbeknownst to them, it was worth $10,000.
Breaking in, they broke a window. Unbeknownst to them, you're traveling, and
that leads to $50,000 in flood damage. Guess who is liable: the crook or you?

It might be unfair that they took on a $60,000 liability for $500 worth of
gain, but it's far more fair than if you took on a $60,000 liability.

Base damages are usually the greater of the damages caused to the victim and
the gains to the culprit. There are exceptions (treble damages, statutory
damages, etc.), but that's a fine baseline.

------
JohnGB
Why wouldn't the QC at NASA include testing at independent labs for anything
mission critical? That seems like a failure on NASA's part as much as it is
fraud by the supplier.

~~~
gnode
It may be that actually fully stressing the parts is avoided, as it may risk
weakening the part.

I've heard of various non destructive testing methods being used to check the
integrity of metals in aerospace, such as ultrasound and radiography. This may
well be enough if the part is actually made of what it's supposed to be.

~~~
CharlesColeman
> It may be that actually fully stressing the parts is avoided, as it may risk
> weakening the part.

Couldn't they just buy an extra and destructively test that?

~~~
dylan604
+1 Make that part of the deal. We only need 2 items, but you will produce 4.
We will then randomly pick 2 of them for testing, and then and only then if
those 2 pass will we actually use the remaining 2 as needed.

This happens all the time in construction of multistory buildings. When the
floors of concrete are poured, they also produce smaller sections of concrete
from the same batches. As the concrete cures, it's strength is tested. This
ensures that the concrete can support the weight designated in the plans.
Better to watch a test pour fail than the building collapsing when cheap
concrete fails under load.

[edit] oops, just read comments later in the thread stating the same thing

------
adim86
Why is NASA asking for less than 14% of the actual damages?

~~~
Max-20
Most likely more would bankrupt the company and they would get $0.

~~~
scotty79
They should get the company.

------
senectus1
Chinese suppliers did this to a mining company in Australia.

Put fucking asbestos brakes on the ore cars (train). Cost a fortune to clean
up.

~~~
fratlas
Link to learn more?

~~~
JudasGoat
[https://www.theaustralian.com.au/nation/politics/asbestos-
fo...](https://www.theaustralian.com.au/nation/politics/asbestos-found-
in-3500-rail-cars-imported-from-china/news-
story/6fe40f41aa5be21e63dab806ac935f6c)

------
pseudolus
NASA published an investigative summary of the failures of the Taurus XL T8
and T9 rockets that goes into further depth [0].

[0]
[https://www.nasa.gov/sites/default/files/atoms/files/oco_glo...](https://www.nasa.gov/sites/default/files/atoms/files/oco_glory_public_summary_update_-
_for_the_web_-_04302019.pdf) (PDF)

------
nafizh
You are kidding me, right? Years of hard work of scientists are lost. The
scientific loss is huge if not quantifiable. You defraud the best and richest
space research agency on earth for years. And you are getting away with just
paying a fine?

A justice system where the Rich pays their way out, and only the Poor get
punished.

------
foobarbecue
Which satellites? I presume OCO and some other one?

And how do journalists so frequently fail to include core facts in their
articles?

~~~
foobarbecue
OCO and Glory, according to space.com.

------
fnord77
> A metals manufacturer faked test results and provided faulty materials to
> NASA, causing more than $700 million in losses

...

> the current parent company of Sapa, agreed to pay $46 million to NASA, the
> Department of Defense and others to resolve criminal charges and civil
> claims related to the fraud

------
anentropic
Lucky it was only a $700million satellite

in another application people could have died

~~~
imtringued
If you value human time by $1 million per year then that is a waste of 700 man
years or 8 people's worth. Of course they got paid and received "free"
training for their job so it wasn't a complete waste but there certainly are
better things to use those man years on, like a functioning satellite.

~~~
erikpukinskis
You can't extrapolate from the price of a human spending 8 hours following
limited corporate instructions to the value of their other 16 hours.

First of all, value and price diverge for many reasons all the time. Secondly,
most people on Earth produce more value after work than during, but that value
is not fully priced or marketed yet (try as captains of industry may).

That used to be more true in the colonial powers as well (most value was not
marketed, and stayed on homestead).

Humans do exist now whose labor is fully marketed but they are rare, mostly
men, mostly rich. And even them, they still produce a lot of extra-economic
value in most cases.

Many humans labor is entirely unpriced, like full-time parents or
schoolteachers, social workers, artists, and other "passion professions.

Humans are invaluable.

~~~
Dylan16807
> Humans are invaluable.

They're really not, as far as managing risk goes. If you try to avoid
assigning a value, you're going to do a worse job, and more people will
probably die.

------
j-pb
It's amazing how companies in the US can cause a billion in damage, wasting
years of highly talented people, put climate science years behind, and get a
slap on the wrist. Yet, some kid carries a few grams of weed and goes to jail
or gets killed by the cops.

~~~
rayiner
Both of your assertions are exaggerations.

1) It is far from certain that the falsified test results "cause[d] a billion
in damage." Press releases about settlements are not court judgments. At
trial, the government would have to prove "but-for causation." For one of the
failures, for example, the government would have to prove that the launch
vehicle's faring would have opened fully had the aluminum met specifications.
If the government cannot prove that, they recover zero. Even if the government
proved that, if anything else went wrong in the launch too, it would have to
rebut the defendant's case that some other component, not the out-of-spec
aluminum, was the primary cause of the launch failure.

2) It's not typical for "kid[s]" to be put in prison for carrying "a few grams
of weed." It might happen sometimes (in a country of 330 million people,
everything that can happen will happen sometimes) but it's not typical.

The government settles cases for a reason. Often, it's because the case isn't
a slam dunk for trial. Sometimes, it's because the company wouldn't be able to
pay the judgment anyway. In government contracting, there is also the
consideration that if you put a company out of business for something that was
the fault of lower-level employees (as here), that reduces competition going
forward. (There's probably not a ton of options for space-worthy aluminium
fabrication.)

(Conversely, the government usually settles drug cases on very favorable terms
because they're easy to prove at trial. You should see the police reports that
accompany these plea agreements. "The accused tried to sell drugs to an
undercover officer. After arrest, the officers searched his car and found more
drugs. Then they searched his house and found still more drugs. A search of
the accused's text messages revealed extensive records of drug sales." In such
cases, the government has no need to put an expert on the witness stand to
convince the jury what would have happened to a rocket launch in a counter-
factual scenario.)

~~~
MichaelApproved
> _It 's not typical for "kid[s]" to be put in prison for carrying "a few
> grams of weed." It might happen sometimes (in a country of 330 million
> people, everything that can happen will happen sometimes) but it's not
> typical._

First, this shouldn't be a "sometimes" thing, it should be a "never" thing.
You get convicted for drugs, regardless of how much, and your life is forever
changed.

Second, for all the made, think about how many times police used the bullshit
excuse of "I smell weed" to violate and harass citizens.

OP was right, this country's justice system is broken but it's not beyond
repair. We are finally seeing changes in the political landscape that will
address many long standing injustices.

~~~
rayiner
> First, this shouldn't be a "sometimes" thing, it should be a "never" thing.
> You get convicted for drugs, regardless of how much, and your life is
> forever changed.

Communities have the right to declare certain things unacceptable and police
their citizens accordingly. The regulation of vice and harmful substances is
one of the core functions of state and local governments. In a country of 330
million people, that means that "sometimes" people will exercise that right in
a way that you or I think is undesirable or even unjust. But the self-
determination of communities is a more fundamental right than the right to
consume whatever substances you want.

~~~
dctoedt
> _But the self-determination of communities is a more fundamental right than
> the right to consume whatever substances you want._

Pretty sweeping statement there. What if a majority of a "community" decides
its residents shouldn't eat meat?

~~~
rayiner
I think California could ban eating and selling meat, both under its power to
regulate health and the power to regulate public morality.

------
nkrisc
> Corporate and personal greed perpetuated this fraud against the government
> and other private customers, and this resolution holds these companies
> accountable for the harm caused by their scheme

Did he misspeak or are only the companies being held accountable? I don't
think a company can exhibit "personal greed." Is he implying there are
individuals responsible as well who aren't being held accountable?

------
zackmorris
As Nasa is a government agency, I wonder if lack of regulation and oversight
played a hand in this.

This sort of scenario is exactly why I'm concerned about the recent trend
towards rampant free market economics and libertarianism. Those ideas have
merit in certain situations, but also increase risk to the public as witnessed
here by losses that are proportionately much higher than any efficiency
savings.

I'm also concerned about how many other agencies and companies might be
affected by this sort of fraud that we haven't heard about yet. We saw the
same thing happen with faulty (mostly imported) capacitors, insecure voting
machines, increased healthcare costs, illness/financial hardship from GMOs and
pesticides (again, mostly oversees), the list goes on.

It didn't used to be like this when I was growing up in the 80s and 90s. We
had different fraud then (for example monopolies and duopolies that held back
telecommunications, the savings and loan scandal, industrial waste superfund
sites...), but also a stronger manufacturing base in our economy. I'm just
going to throw the idea out there that we're seeing a link between
deregulation, fraud, increased costs on the public sector, and a slowing
economy.

~~~
weberc2
Honest questions:

1\. Is there any compelling evidence that this incident is attributable to
"free market economics"? It seems equally possible that it's attributable to
notoriously poor incentive structures in government agencies. In my view it
seems most likely that it's neither, in this particular case.

2\. Is there evidence that there is a "recent trend towards rampant free
market economics and libertarianism"? Again, this is an honest question; I've
not seen a claim like this made before.

~~~
zackmorris
I'm not sure about your first question, but for your second question the
evidence is everywhere. My news feed is filled with multiple articles per day
about cutting regulations on just about everything, but mostly impacting the
environment, or social justice issues:

[https://www.google.com/search?q=deregulate&tbm=nws](https://www.google.com/search?q=deregulate&tbm=nws)

Part of the issue is geographic. Being born and raised in Idaho, I've found
myself surrounded by libertarians. Conservative-leaning people tend to move
here from more liberal states on the coasts.

Now where it really gets interesting is when libertarian think tanks do the
opposite of what might be expected:

[https://www.hjnews.com/montpelier/voter-
initiatives/article_...](https://www.hjnews.com/montpelier/voter-
initiatives/article_3bb9ee74-46a6-51da-8004-d98ba6640f5f.html)

In this case Idaho Freedom Foundation (a local libertarian think tank) is
against public voter initiatives (which may someday lead to the legalization
of marijuana in Idaho) but is for getting public approval for urban renewal
projects like the Boise city library teardown/rebuild and new stadium.

You just can't make this stuff up.

~~~
scaphandre
Do you really think Google search trends are indicitive of "recent trends" on
political leanings on regulation?

If so, you might be interested to see that there is appears to actually be a
relative swing toward regulation:
[https://trends.google.com/trends/explore?date=all&geo=US&q=r...](https://trends.google.com/trends/explore?date=all&geo=US&q=regulate,deregulate)

------
redleggedfrog
Somebody at Sapa, probably somebodies, need to go to prison. For 19 years, to
match the time of the fraud.

------
homero
But why? They tested not sold metal. The only possible reason is the metal
company paid them.

------
PunksATawnyFill
It's NASA, not Nasa.

------
morsmodr
Not to stoke a fire, but I just wondered how the same failure would be viewed
if it was done by a Chinese or Indian Manufacturer. Immediately it would have
reinforced a stereotype of outsourcing being cheap and that being the issue.
When in reality the truth is that there are frauds, lazy and useless people
everywhere on the planet.

~~~
rhexs
Hopefully viewed even worse as the question would then be "why is NASA
outsourcing spacecraft critical component construction to India/China?".

~~~
morsmodr
Damn, did not think of that #facePalmToMyself. Yeah, such things shouldn't be
outsourced

