Prisoner scandal shouldn't delay Titan sale to Lockheed, officials say

Allegations that its employees were involved in the Iraqi prisoner abuse scandal likely won't cause further delays in Titan Corp.'s sale to Lockheed Martin Corp.

"It's a little early yet; we've been watching [what's been happening]," said a Lockheed Martin official, who did not want to be identified. "Right now we don't believe it will have any impact towards the date of the shareholders meeting."

Titan of San Diego and CACI International Inc. of Arlington, Va., were cited in a report by Maj. Gen. Antonio Taguba, who conducted an investigation of prisoner-abuse allegations at Abu Ghraib prison outside Baghdad.

The report described various instances of the U.S. military's alleged mistreatment and humiliation of Iraqi detainees. Besides naming several military personnel, who have since been charged, the report also singled out employees from Titan and CACI, both of which provide services to the U.S. military.

The report came as Titan's shareholders are getting ready to vote on the deal on June 7.

When asked Friday whether the report would affect Titan's takeover by Lockheed Martin, Wil Williams, the company's vice president of corporate communications, said that there had been no changes in the company's merger plans, and that the shareholders were still going to vote in early June. He added that no allegations against any Titan employee in Iraq had been made.

Titan's shareholders' vote has been rescheduled twice on account of allegations that emerged in February that company employees had bribed foreign government officials in exchange for business. Bethesda, Md.-based Lockheed Martin announced its acquisition of Titan last September.

Besides the two companies' own reviews of the bribery allegations, the Securities and Exchange Commission and the Justice Department are investigating whether the payments and Titan's disclosure of them were illegal.

An amended merger agreement the companies issued April 7 said that the Justice Department must clear Titan of wrongdoing before the deal can be closed. It also says that Titan must obtain written confirmation from the Justice Department either that it has resolved its investigation and will not pursue claims against the company or that Titan has entered into a plea agreement and completed the sentencing process.

Thomas Greer, a Lockheed Martin spokesman, said the company had no comment on whether it would consider extending the deal's completion deadline again in light of the developments in the Iraqi prisoner-abuse scandal or the Justice Department's investigation.

He referred to Lockheed Martin's April 7 statement, which says that that the takeover date may be postponed to Sept. 24. He said that it also stipulates that if the deal is not completed by June 25, either company can terminate the agreement, provided that the party doing so is not in breach of its obligations under the agreement.

(Posted May 9 and updated 11:09 a.m. May 10)