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NASA Space United States Technology

NASA Says Metals Fraud Caused $700 Million Satellite Failure (bloomberg.com) 351

A metals manufacturer faked test results and provided faulty materials to NASA, causing more than $700 million in losses and two failed satellite launch missions, according to an investigation by the U.S. space agency. From a report: The fraud involved an Oregon company called Sapa Profiles, which falsified thousands of certifications for aluminum parts over 19 years for hundreds of customers, including NASA. The bad parts were used in the making of Taurus XL, a rocket that was supposed to deliver satellites studying the Earth's climate during missions carried out in 2009 and 2011. The launch vehicle's fairing, a clamshell structure that carries the satellite as it travels through the atmosphere, didn't fully open, causing the unsuccessful launch, according to a statement from NASA.
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NASA Says Metals Fraud Caused $700 Million Satellite Failure

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  • We all know "self regulating" doesn't work.

  • by Lucas123 ( 935744 ) on Wednesday May 01, 2019 @09:33AM (#58521822) Homepage

    After investigating, nuclear reactor supervisor Jack Godell (played by Jack Lemmon) found a problem with one of the pumps which caused it to vibrate. Looking for the cause, he discovered that, instead of x-raying all of the welds, the contractor had used the same x-ray and just changed the reference numbers. This meant that there were welds that had never been properly checked during construction. A bad weld was causing excess vibration and the reactor to scram (stop and restart) and could have lead to a catastrophic failure of the cooling system, causing a complete meltdown.

    You always hope that's the stuff of movie fiction, but inevitably you find out there are unscrupulous government contractors who undermine the quality control process.

    At least this was just a loss of time and money (hopefully) and not life

    • Exactly that happened in the Greifswald Reactor in east germany. Not "exactly" ... they had oversized pumps, after the motto: "better save than sorry". But the oversized pumps caused so much vibrations that pipes broke or where close to broke. The reactor got shut down very shortly after the east - west german reunion.

      • by AmiMoJo ( 196126 )

        Vibration seems to be a major vulnerability with nuclear plants. Fukushima was damaged by the earthquake which later prevented emergency pumping from working. Even the designs that are supposed to have passive safety rely on gravity inserting control rods and plumbing still working, both of which wouldn't have worked in that situation.

        • Even the designs that are supposed to have passive safety rely on gravity inserting control rods and plumbing still working, both of which wouldn't have worked in that situation.

          For molten salt reactors, the passive safety system diagrammed for John Q. Public is a solid salt plug that blocks flow to a drain tank. It's kept solid by a fan which only operates when power is available. Lose power, lose fan, lose solid plug.

          What they don't tell JQP is that they would never actually design this system, because if

    • by gweihir ( 88907 )

      Indeed.

    • I may be wrong, but I don't think that was the premise of the China Syndrome. A stuck water level indicator caused the monitoring team to think that there was more water in the cooling tank than there really was. The movie about the bad welds was Silkwood, starring Cher..
      • by kackle ( 910159 )
        Nah, "The China Syndrome" was on recently; the OP is correct.
      • by nmb3000 ( 741169 )

        That sounds more like what happened at Three Mile Island where a loss-of-coolant incident wasn't recognized due to bad indicators.

  • by RobinH ( 124750 ) on Wednesday May 01, 2019 @09:44AM (#58521892) Homepage
    In Europe and North America in the automotive industry, the way we handle this problem is to require manufacturers to provide a paper trail of certifications at every step. Obviously this requires some amount of honesty at each level of the manufacturing chain, plus some amount of accountability and reputation. The reason we use a system like this is because metallurgical testing by the customer is prohibitively expensive. Unfortunately this has lead to a lot of problems when industry started outsourcing to China. Our buyers there have admitted that if you want some high grade tool steel, Chinese suppliers will give you whatever certification you want, but the chance of it actually being that material is practically nil. Still, even in Europe and North America we occasionally run into the same problem. The idea of someone trying to pull one over on NASA though... that's a bit surprising. Unfortunately this just means NASA will be even more likely to run metallurgical tests on every sample of metal they get, and that's just going to push the cost of spaceflight even higher.
    • by Ogive17 ( 691899 ) on Wednesday May 01, 2019 @10:10AM (#58522022)
      Those certifications don't stop the problem. Two years ago, Kobe Steel (Japan) admitted to falsifying records. My wife works for an automotive supplier in the US and their company had purchased and used material from Kobe (though I am not sure if they used the falsified steel).

      When a company starts to fall behind competitively, the chance of winning new bids gets lower and lower. Companies may feel that if they cheat a little bit now and guarantee that cash flow, they can catch up and go back to proper behaviors. What actually happens is it either becomes ingrained in the corporate culture or someone blows the whistle. Either way the truth normally comes out, just hope that no one is hurt/killed (ex: Takata airbags).
    • by guruevi ( 827432 )

      NASA does the same thing, this company simply faked the paper trail certifications. There is nothing you can do about it other than note that your manufacturer consistently comes under their competitors because their competitors were doing the paperwork (and that costs money too).

      It's a problem up and down the chain at NASA to always accept the lowest bid even though the quotes are impossibly low.

    • by PuddleBoy ( 544111 ) on Wednesday May 01, 2019 @11:21AM (#58522452)

      I have a relative who works for one of the major car companies. For a while, he had the job of tracking down the cause of metallurgic failures.

      He told me the company would fly him out to a jobber's facility so that he could see for himself what was going on. He recounted once that he was inspecting the line at a supplier (first world country) and that the offices were nice and clean but the shop floor was.... dirt. And all the activity of manufacturing parts caused a lot of the dirt to become airborne, which would cause it to mix with the batches of metals that were being melted, then cast.

      Apparently, it does not take a lot of dirt added to your alloy to cause a measurable drop in strength. (They no longer use that jobber)

      Many companies want to compete in a wider arena (from what they historically have), but don't realize or choose to ignore that you have to up your game if you are going to sell to entities that require high standards to avoid failures (or even deaths).

    • by pnutjam ( 523990 ) <slashdot@@@borowicz...org> on Wednesday May 01, 2019 @01:21PM (#58523152) Homepage Journal
      This would be perfect for a block-chain!

      ;-)
  • by Anonymous Coward on Wednesday May 01, 2019 @09:49AM (#58521920)

    One of my hobbies involves vacuum tubes, which are also apparently a ripe ground for fakery. The following article details fakery not only in the field of vacuum tubes, but also in airline engines, chicken food, and baby milk.

    https://jacmusic.com/nos/images/Fakes/

    It's sad to say, but because there will always be a profit to be made by selling cheap fakes, this problem will always be with us.

    Perhaps digital signatures, blockchain, or other technological measures might help curb such problems by making falsified certifications easier to detect.

  • Who is / are the real owners? Norsk Hydro ASA, Orkla ASA, Sapa AB or ... and which one will be the "responsible party" in the lawsuits?
  • Same kind of thing happened to the Brooklyn Bridge [wikipedia.org] where the contractor for the wire metal substituted it for inferior quality metal.

    Thankfully, the bridge was engineered such that it didn't have a critical failure because of this, and still stands today (with perhaps the same wire - though I don't know for sure).

  • by aglider ( 2435074 ) on Wednesday May 01, 2019 @11:22AM (#58522456) Homepage

    Those who rely on the seller to certify their own stuff.

  • by burningcpu ( 1234256 ) on Wednesday May 01, 2019 @11:43AM (#58522596)
    I worked as a research chemist for a specialty chemical manufacturing firm (Fujifilm Electronic Materials), with customers such as Intel, Samsung, Global Foundaries, and TSMC.

    There were layers upon layers of fraudulent data reporting, especially ICP-MS trace metal data. I discovered traces and hints of fraud while I worked as a quality control chemist, but was fully aware that management condoned and largely orchestrated these events, through a system of intimidation, threats and repercussions. I continued working for the company, and after a few years, was promoted to be one of the most senior research chemists in the company. Eventually I was responsible for developing and validating all methods used to measure trace metals in Chemical Mechanical Polish (CMP) globally, with approximately 50 people under my direction.

    At this point, I openly investigated and attempted to address the fraudulent data reporting.

    The report I embed below describes my experience. It was written for my lawyer and I have not modified it for slashdot, besides adding a few breaks here and there. High Level Summary

    In early June 2017, I reported a very senior employee (a man, referred after as BT) at the Mesa site of Fujifilm Electronic Materials for wrongdoing.

    BT wields a supportive and captured apparatus, installed through replacement of key positions within the company with people of low competency and personalities agreeable to influence. This structure has been and is currently used to suppress reporting and honest investigation of wrongdoing.

    Multiple internal-whistle blowing attempts have occurred locally within the less than five years of my employment. In each case, the issue has been whitewashed and the reporter admonished, intimidated and otherwise forced to withdraw employment at the company. My experience following the June reporting mirrors. I have received intimidation, retaliation, and discrimination of multiple forms. I was prevented from escalating to Corporate - first by local actors and later by Corporate itself. The apparatus mirrors that in place in other Fujifilm Holdings owned subsidiaries. The article below speaks to the issue.

    https://www.odt.co.nz/news/nat... [odt.co.nz]

    Initial Details: In mid June 2017, following but unrelated to my request, Fujifilm Holdings released an emergency alert regarding the initial details of the scandal described above. I had, within the two weeks prior, made the same connections regarding the local site, and these objections were the basis of my initial report. As such, I notified the HR representative at my site that the issue must be escalated, as it contains global pertinence and I linked to the article described. I was told that my request lacked merit, and Fujifilm Holdings wouldn't be interested or capable of investigating this issue. Further, it was heavily indicated that my position was at stake, and no help is possible. I began to go along with what BT desired, and made other overtures to indicate pacification. In the months that followed, to preserve my position, I became an even more vital employee. I ensured that my duties were performed with perfection. I entrenched myself in work, waiting for a time to act. Waiting for help. During a mandatory meeting in October, the CEO of FujiFilm Holdings made what appeared to be a heartfelt call for honesty and integrity in all matters, globally. On 11/15/17, I called the newly released Compliance Hotline number, thinking I was reaching out to Corporate. That's what the CEO had promised in the meeting. Instead, I reached only FujiFilm Holdings America Corporation. After re-reading the Committee Report and discovering that FujiFilm Holdings only found out about the XEROX scandal months after it had been released in local news, when a journalist called Investor Relations to comment on the report. I submitted some details regarding my report and my contact number to the 'Investor Relatio
    • by burningcpu ( 1234256 ) on Wednesday May 01, 2019 @01:04PM (#58523044)
      It's somewhat cathartic for me to post this information here. Slashdot has been my e-place for over a decade and while I was going through this stuff, I had mulled seeking help here, but didn't.

      "You may ask -- isn't there an auditor responsible for evaluating compliance and issuing certifications? Why not reach out to them?" Well, the auditor gets paid to issue certifications that companies are following a standard, such as ISO. If a particular auditor is 'too hard' on a company, well...there are other auditors that certify for the same ISO standard! So...auditors walk a line, and some a curvy one.

      SGS is the auditor responsible for certifying the capabilities of the Mesa plant. https://www.sgs.com/en/audit [sgs.com]

      I submitted the following to their compliance team. SGS later declined the request for investigation, stating that it wasn't their role.

      Summary: I am a research chemist at Fujifilm Electronic Materials. In early 2017, I became increasingly aware of ongoing activities that were prohibited by our ISO certifications and internal procedures. These activities were directed by the most senior local Fujifilm Manager, bypassing our quality assurance systems and organizational hierarchy. Moreover, these activities were and are likely causing harm to our customer, Intel.

      Fujifilm Electronic Materials Mesa is lying about our ability to test our products for non-conformance. These products are used in critical manufacturing stages and deviations in product performance will generate significant financial harm.

      I believe this has already occurred and that violations of the Code are a likely source of some of Intel's recent manufacturing difficulties in the advanced nodes. Initial Reporting – June 2017

      I reported these instances to the Human Resources department and requested an external investigation in mid-June 2017. The request for an external investigation was denied – instead the parties would investigate themselves.

      I requested elevation to Fujifilm Holdings. I was told that Fujifilm Holdings was 'just a holding company, for accounting,' and they would not be interested or capable of discussing these issues.

      I called the Employee Assistance Program and was told the same. I asked the EAP for advice – I suspected fraud, I had reported so and no one was listening to me. They offered no solution.

      I asked HR for assistance while the internal investigation was conducted by but was denied. On June 29th 2017, I was told by the senior HR representative at Mesa to stop reporting issues, as 'they had enough information to work with,' and it was implied that my job was becoming increasingly at risk.

      Job at risk – October 2017

      I faced increasing levels of intimidation, discrimination and retaliation over the coming months. I was subject to special consideration and attention by the party I had reported. My projects were subject to requirements that were not applied elsewhere, prior or since. These requirements were widely recognized to be odd, and several meetings with EHS and Engineering leadership followed, where the oddness of the requests was mulled.

      In October, as a response to the ongoing fraudulent activities at XEROX and other subsidiaries, Fujifilm Holdings released a Compliance Helpline the CEO asked all employees to use it to report any potential wrongdoing to Fujifilm Holdings.

      Helpline Contact – November 2017 Emboldened, on November 15th 2017, I reported the above issues to the helpline. I did not receive a response until 12/07/2017. Rather than detailing the entire situation, I will provide a summary of the time since my reporting to Fujifilm Holdings.

      I was not allowed to communicate with Fujifilm Holdings. I could only engage with Fujifilm - US, the regional holding company. This was problematic as the issue at Fujifilm Electronic Materials, Mesa was a symptom of FujiFilm Holdi

    • This was interesting. Thanks for posting.

  • SpaceX suffered too (Score:5, Interesting)

    by Areyoukiddingme ( 1289470 ) on Wednesday May 01, 2019 @11:47AM (#58522622)

    SpaceX lost a Falcon 9 upper stage during launch to bad struts with fraudulent certifications. Now they do their own in-house testing of even such basic things as struts, because apparently metals manufacturers are fucking liars. Wonder if it was the same company...

  • No, seriously.
    The legal and financial repercussions ought to match those levied on VW after "dieselgate." Some of their execs are going to jail, albeit not in the USA. Every owner of a diesel VW got some kind of compensation upon turning in the vehicle.

  • by thereddaikon ( 5795246 ) on Wednesday May 01, 2019 @01:18PM (#58523128)

    But the person responsible for falsifying the tests has been sentenced to prison.

    More infor here: https://www.justice.gov/opa/pr... [justice.gov] And here: https://www.justice.gov/crimin... [justice.gov]

    "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 pleaded guilty in July 2017 and has been sentenced for his role in the scheme."

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