Friday night goggles at ITT…

It takes courage to tackle a document titled “Administrative Compliance Agreement.” Snore, snore and snore. But this agreement, attached to the 8-K that ITT Corporation (ITT) threw into the SEC filing pile Friday evening, turned out to be pretty exciting.

ITT, a major defense contractor, pled guilty back in March to violating U.S. arms trafficking regulations. On “numerous occasions” dating back to the 1980s, it was said to have sent data, services and equipment related to “classified military night vision systems” to parties in foreign countries (including China), and lied to the State Department about it.

The firm paid some fines and agreed to an additional $50M penalty which, under this agreement, it can work off by putting the money into new night vision technology for the Army over the next 5 years. (Kind of like some deadbeats allowed to pay their restaurant check by washing dishes, except for the national security part.)

The agreement makes official that ITT can continue to be a government contractor if it institutes ethics codes and compliance procedures, employee training and whistleblower protections, and operates under them for 5 years. (While cumbersome, the measures seem simpler than the compliance systems Wall Street broker-dealers must put in place to satisfy their regulators.) ITT is even allowed to conduct its own internal investigations, bringing in a third party only if it feels like it.

Meanwhile, in September the firm got a new $37M contract to supply night vision equipment to the Navy and Coast Guard and another big order from the Army. No senior heads at the company have rolled. Indeed, it’s been busy acquiring another defense technology firm, and the stock has been pretty much chugging along.

Ironically, on Friday the Justice Department announced an initiative “to combat the growing national security threat posed by illegal exports of restricted U.S. military and dual-use technology.”