History of Electric Induction Heating

Press Abuse

By James Farol Metcalf

Local News Coverage of the Russian Contract


By Tim Kelly

BCT business writer

January 6, 1988

Jim Metcalf, the mysterious figure in Consarc Corporation's controversial sale of equipment to the Soviet Union, has surfaced.

A former vice president of the Westampton-based firm, Metcalf initiated the sale of vacuum melting furnaces to the Soviets in 1982.

The deal became the focus of a congressional subcommittee investigation last month after it was learned the equipment could be used in the manufacture of carbon-carbon, a component in the manufacture of nuclear warheads.

Metcalf contacted the Burlington County Times by phone yesterday from the Miami area, to respond to media accounts of the deal.

"I was going to ignore this because I've done nothing wrong and the company (Consarc) has suffered enough," Metcalf said. "I lived in Willingboro for years, and still have family in the area. I had to speak up to say I'm not the monster these stories have made me out to be."

Metcalf said he first discussed the sale with Soviet officials at a U.S. Commerce Department-sponsored trade seminar in 1982, and the deal was a purely business decision.

Russian trade officials said the furnace and presses would be used for an industrial application, Metcalf said, and Consarc was interested in expanding its market base.

"Russia is an untapped market. We were bringing jobs to South Jersey and contributing to the (gross national product)," he said. We never sought the sale of military secrets. Everything was straight forward."

In 1983, Consarc's British subsidiary began shipping components of the equipment under the terms of an $11 million contract. The shipments were made with the complete knowledge and approval of the U.S. Commerce Department and British trade officials, Consarc president Raymond Roberts said during a December 2 interview.

"The furnace can be used to melt steel or to melt uranium," said Metcalf. "It doesn't make sense to assume it's being used in the research of nuclear warfare. That's like saying you're a chef just because you own cotton pickin' skillet."

In 1984, the shipments were briefly halted by British customs officials, but they resumed after the Russians threatened to take Consarc to international court for failure to comply with a legal contract.

Roberts said Consarc sought a clarification on the deal from the Commerce Department, and was eventually told to continue making the shipments.

By the time the sale was stopped, "by the highest levels of American and British governments," according to a spokesperson for the Congressional subcommittee, about 95 per cent of the furnace components were already shipped.

"We only caught the tip of the rat's tail," said Congressman John Dingell, D-Mich., who headed the committee.

Carbon-carbon is considered to be of strategic value to the national security, Dingell said, because it improves the accuracy of nuclear warheads. The fibrous material is able to withstand the intense heat of re-entry to the earth's atmosphere, making it a critical component of missile nosecones and the space shuttle, according to Dingell.

Metcalf disputed the strategic importance of carbon-carbon and blamed the entire episode on media over-reaction. He said he offered to appear before the congressional subcommittee, but they never responded to his written requests.

"They (Congress) didn't truly want to find the tempest in the teapot," Metcalf said. "I have the documents to back up what I'm saying and it's a helluva story. But you'll have to come to Florida for it."

Metcalf said he made a complete report of his activities with the Russians during a recent interview with FBI officials. The meeting lasted several hours, he said, and covered every single aspect of the transaction.

Still, the FBI declined to pursue the matter further, he said.

While uncertainty swirled around the deal, Metcalf accused the media of running with a half-baked story.

"I think they just wanted something negative to write about during the recent summit," he added, referring to the story which first broke in the Long Island, N.Y. newspaper Newsday, and was followed up the next week by Time magazine.

"Time put my picture in their international edition and called me a 'techno-bandit'. I'd find that comical, except it has had a negative impact on my business and has caused pain to my family," he said.

The story also was reported nationally by several of the major networks and wire services.

Consarc officials denied any wrongdoing in the affair, as Roberts painted a picture of a company acting within the letter of the export laws but still becoming entangled in a web of bureaucratic bungling by American and British authorities.

Unanswered questions concerning the deal continued to linger, though. Consarc refused to discuss the circumstances of Metcalf's departure from the company and further intrigue came from the revelation that Metcalf had married a Russian woman in 1979 during earlier business dealings with the Soviets.

"When it came out that I married a Russian woman, the hysteria really took off," said Metcalf. "But I'm not worried about it, because I have a thick skin."

Speculation concerning Metcalf's involvement heightened after the Newsday and Time stories because he couldn't be located for comment and didn't come forward until yesterday.

He said he remained overseas because of a tax law that enabled him to deduct $70,000 in earned income from his federal tax bill if he remained out of the country for 330 days in 1987. "Wouldn't you do the same thing?" he asked.

"Your editorial was fair and the story line was fair, but everyone is overblowing the importance of this deal from a national security standpoint," Metcalf added. "The fact of the matter is, we sold a furnace. It will not give Russia any strategic advantage."