Body Armor Manufacturer Dodges a Bullet

Of all recent public-relations disasters —selling lead-tainted toys to tots comes to mind, as does pinning unaffordable mortgages on pensioners—one of the most cringe-inducing must include this:

Selling defective bulletproof vests to police officers. Several manufacturers have been implicated in the scandal, and now one of them has agreed to settle the case and move on.

Without admitting or denying wrongdoing, Hexcel Corp. of Stamford, Connecticut, has agreed to pay $15 million to resolve a government investigation of its role in the manufacture and sale of defective Zylon vests to federal, state, local, and tribal law enforcement agencies.

As part of the deal, Hexcel pledged to cooperate in the government's ongoing investigation of others who participated in the fraudulent conduct, the Justice Department said. A government spokesman said he could not release any details on which other companies or people are currently being investigated.

Hexcel spokesman Michael Bacal said, "We deny any liability." In the settlement agreement, the company said it agreed to pay the $15 million to avoid the "delay, uncertainty, inconvenience and expense of litigation."

Bacal said that Hexcel had sold the subsidiary that wove the defective vests, and had disclosed setting aside money for the settlement in its second-quarter earnings statement.

The government accused Hexcel of weaving Zylon fiber supplied by Toyobo Corp. of Japan into fabric that was then used in bulletproof vests sold by Second Chance Body Armor, DHB Inc., and its subsidiaries, Point Blank Body Armor and Protective Apparel Corp. of America. Other companies that sold the vests included Gator Hawk Armor and Armor Holdings and its subsidiaries, American Body Armor and Safariland.

Law enforcement agencies that purchased the vests under a federal-assistance program, the Bullet Proof Vest Grant Partnership, were reimbursed with federal money.

According to the Justice Department, Hexcel knew—or recklessly failed to determine—that the Zylon made by Toyobo was defective and degraded rapidly when exposed to heat, light and humidity.

Also, the federal government charged, Hexcel knew that Toyobo had provided it with "red thread" Zylon, which was weaker than standard Zylon.

According to the complaint, Hexcel manufactured the flawed vests between June 1996 and August 2005.

The Justice Department sued Second Chance Body Armor and Toyobo in July 2005 to recover damages for the sale of defective vests. In June 2007, the government filed suit against both Toyobo America Inc. and its parent, Toyobo Co. Ltd., of Osaka, Japan, for their roles in producing the defective vests.

by Elizabeth Olson