--Federal government receives $5.65 million in contract
dispute
--Settlement stems from whistleblower action
--Corning alleged to have given federal government smaller
discounts than its commercial customers
(Adds Corning statement and updates stock price.)
By Ben Fox Rubin
Corning Inc. (GLW) agreed to pay the federal government a $5.65
million settlement, to resolve allegations that it knowingly
presented false claims to the United States for lab-research
products sold to federal agencies, the U.S. Department of Justice
said.
The settlement involves a contract entered into in 2005 by
Corning, a maker of television-screen glass and other glass and
ceramic components, to sell laboratory-research products to federal
government entities through the General Services Administration's
Multiple Award Schedules program.
The United States alleged that it received lower discounts than
some of Corning's commercial customers and ultimately paid far more
than it should have for Corning products, as Corning didn't provide
the GSA with complete and current information on its commercial
sales practices and discounts.
"This is a result of the government in our opinion,
reinterpreting the requirements of a contract late into the life of
the contract," said Daniel Collins, Corning vice president of
corporate communications. "We had been operating under a different
interpretation. We disagree with the government's reinterpretation
but determined it would be best to settle and move on."
The settlement resolves a lawsuit filed in the U.S. District
Court for the District of Columbia by Kevin Jones, a former Corning
life sciences sales representative, under the whistleblower
provisions of the False Claims Act. Under the act, private citizens
may bring suit for false claims on behalf of the United States and
share in any recovery obtained by the government.
Mr. Jones will receive $904,000 as his share of the government's
recovery.
In January, Corning said its fourth-quarter earnings fell 42% as
it reported higher charges related to restructuring, impairment and
other items, which masked a jump in revenue.
Shares closed Friday at $12.71 and were unchanged after hours.
The stock is up 1.4% over the past three months.
-Write to Ben Fox Rubin at ben.rubin@dowjones.com
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