Austal USA subject of federal investigation, raid


A Littoral Combat Ship (left) and an Expeditionary Fast Transport sit docked at Austal USA’s manufacturing facility on the Mobile waterfront. (Lawrence Specker | [email protected])

By AL.COM  Written By Lawrence Specker | [email protected]

Federal authorities apparently are investigating Mobile-based shipbuilder Austal USA, though it was not immediately clear Thursday what agencies were involved.

Meanwhile, Austal’s parent company apparently also announced that it was the subject of an investigation by Australian authorities, related to actions affecting the stock market in 2016.

Amid reports that investigators had raided company offices, Austal USA issued a brief statement. It said, in its entirety:

Austal USA is working with the US Navy on an open investigation.

We are unable to provide additional details due to the nature of the investigation.

We are continuing business as usual, executing our existing and recently awarded contracts.

The statement did not specify that it was a Navy investigation. A representative of the office of the Navy Chief of Information said that inquiries should be directed to the Department of Justice. A public affairs official with the Naval Criminal Investigative Service likewise provided the statement that “NCIS does not comment on ongoing investigations. Recommend you reach out to the Department of Justice for queries as they are the lead for this matter.”

A spokesman from the Department of Defense Office of Inspector General referred questions to the U.S. Attorney’s office. James Davis, law enforcement coordinator for the U.S. attorney’s office for the Southern District of Alabama, said he could not “confirm or deny any activity or information” at this time. An inquiry with DOJ officials in Washington was pending as this story was published.

The story will be updated as additional details emerge.

Austal is one of the area’s largest employers, with a workforce of about 4,000. It manufactures Littoral Combat Ships and Expeditionary Fast Transports for the Navy, and is competing in a Navy selection process for a series of next-generation frigates.

An Australian news outlet, the West Australian, reported Thursday that Austal’s parent company had disclosed that it was “assisting an investigation” by the Australian Securities and Investments Commission.” That body apparently was interested in market announcements made by Austal “leading up to its warning of a $122 million annual loss in June 2016.”

According to the West Australian report, that loss “was blamed on a blow-out in the cost of completing 11 Littoral combat ships on order from the US Navy” and caused a plunge in Austal’s share price.

It wasn’t immediately clear whether the U.S. and Australian investigations were related.