By Matt O'Connor, Tribune Staff Writer. Tribune staff writer Jon Hilkevitch contributed to this report.
September 22, 2000

A former engineer for the Federal Aviation Administration pleaded guilty Thursday to stealing the lone copy of a crucial computer code necessary to fix glitches in the automated system used to relay flight information between the tower at O'Hare International Airport and controllers at an air-traffic facility in Elgin.

Thomas A. Varlotta headed the team that worked several years to develop the so-called source code and took the software program when he resigned from the FAA a month after learning of plans to bump him down a pay grade, prosecutors said.

Varlotta, 43, of Tinley Park pleaded guilty "blind" to the single felony count, meaning he hadn't worked out any deal with prosecutors on the length of his sentence.

His prison term will largely hinge on how valuable a federal judge finds the software code to be. Prosecutors contend it is worth more than $1 million and that Varlotta should be given nearly 5 years in prison for the theft. Varlotta's lawyer maintains the code's value is far less.

Experts for both sides are expected to testify on the code's value at a hearing Nov. 11 in federal court. U.S. District Judge William Hibbler scheduled sentencing for Jan. 4.

Federal investigators recovered the software code in a raid on Varlotta's home two months after he resigned in June 1998, but it was encrypted with a 14-digit password and authorities were unable to unscramble it until February 1999. Authorities initiated the raid after they discovered the code was missing and Varlotta gave inconsistent statements when questioned about it.

FAA officials say there was no danger to the flying public while the only copy of the code was missing or unusable because no breakdowns in the automated system occurred. And even if there had been breakdowns, controllers at O'Hare and the Elgin facility would have used telephones to share flight information.

The FAA said the code couldn't be stolen now because of tightened security measures put in place over the last two years.

Authorities have said Varlotta told his boss when he resigned that he had "wiped"--or intentionally removed--the hard drive of his FAA laptop, thus destroying the only copy of the software code.

But in a letter a month later, Varlotta claimed the code had been accidentally lost when his computer malfunctioned, according to Assistant U.S. Atty. Brian Ellis.

Federal computer experts, though, examined Varlotta's laptop and concluded he had transferred the software code to another computer and then intentionally reformatted the laptop to make it appear it had malfunctioned, Ellis said.

Varlotta headed the development of the software between 1993 and 1996 and then worked for the next two years with a programmer to ensure that the software met industry standards.

For his work those last two years, Varlotta's pay was boosted to that received by an employee with a civil service grade of GS-14. But a month before his resignation, Varlotta learned his pay grade would fall to his regular GS-13 rate when he completed the project, court papers show.

A confidential source told authorities that Varlotta had said he didn't intend to finish the project in hopes of forcing the FAA "to come back to him [and the programmer] for help," a filing by the government said.

Among several hundred diskettes that were recovered from Varlotta's home, investigators found the code hidden on one marked as if it held instructions on installing a popular Microsoft software program, Ellis said