Anaconda Wire and Cable Indicted for $6 Million Fraud

The Justice Department issues an eight-count indictment against Anaconda Wire and Cable Company and five of its employees on December 21, 1942, charging them with conspiracy to defraud the United States by supplying the Army and Navy with defective wire and cable intended for combat use.

Attorney General’s Assessment

Attorney General Francis Biddle called it “one of the most reprehensible cases of defrauding the government and endangering the lives of American soldiers and sailors ever to come to the attention of the Department of Justice.”

Scale of the Fraud

The Anaconda wire fraud case involved $6 million in defective wire and cable sold to the United States government. The company’s Marion, Indiana plant - financed by government funds - conspired to defraud the very government that enabled its operations.

Most alarmingly, Lend-Lease shipments of Anaconda products to the Soviet Union were 50% defective, causing the Soviet government to file an official protest. Senator Homer Bone declared the cable was “so defective that the persons deliberately creating the defects would be brought before a firing squad if they had done this in the war zones.”

Minimal Consequences

Despite pleading guilty to fraud and endangering soldiers’ lives, Anaconda Wire and Cable and its officials were fined only a few thousand dollars. During the period between indictment and trial, the Offices of the Inspector of Navy Material in New York and Cincinnati commended Anaconda for its “good workmanship” and announced it was being considered for an “E” award for excellence.

Truman Committee Role

The Truman Committee’s investigation uncovered the fraud as part of its broader effort to expose waste and corruption in war production. With an initial budget of just $15,000, the committee saved an estimated $10-15 billion in military spending by uncovering such cases.

Pattern of Impunity

The Anaconda case exemplified a pattern where major defense contractors faced minimal consequences for fraud. The nominal fines and continued government contracts established precedents for corporate impunity that would persist in defense contracting for decades to come.