The Navy has ordered an investigation into allegations that now-retired admiral Hyman G. Rickover accepted gifts from four military contractors, Navy Secretary John F. Lehman Jr. announced yesterday.
In a letter to Rep. John D. Dingell (D-Mich.), chairman of the House Energy and Commerce Committee, Lehman said he has named a panel to investigate charges that Rickover received gifts and gratuities from General Dynamics Corp., Westinghouse, General Electric and the Newport News Shipbuilding & Dry Dock Co.
Both the Justice Department and Dingell's subcommittee on oversight and investigations have been investigating the alleged gift-giving to Rickover since last summer. Such gifts are prohibited by federal law and by the contracts between the Navy and the corporations.
Last July, Dingell, whose investigation has focused on General Dynamics, sent a letter to Lehman suggesting that about $5 billion in Navy submarine contracts to General Dynamics be canceled because the company violated the gift clause in the contracts.
After Lehman failed to take any action, Dingell wrote to him again last Friday, asking why he had not "taken aggressive action to terminate . . . the contracts.
"If there was ever a time for the Navy to get tough and to enforce a contract, this is the time. The facts of the violation do not appear in dispute. Top management of the corporation personally and knowingly violated the contract and the law and attempted to cover up their actions," Dingell said.
Dingell also asked that General Dynamics be barred from any future Navy contracts.
In his response to Dingell yesterday, Lehman said he will not take action against the companies until the Navy investigation is complete.
But he added, "There is evidence that General Dynamics, Newport News, General Electric and Westinghouse companies did in fact provide gifts and gratuities to Adm. Rickover. This evidence raises an issue of civil remedies, including action under the contract gratuities clause, and the possibility of criminal action."
Lehman's letter provided no details on what types of gifts or gratuities the various companies allegedly provided Rickover.
Staff sources on the Dingell subcommittee said they have obtained evidence that the gifts to Rickover in 1977 from General Dynamics included a $695 pair of diamond earrings, a $430 jade pendant, a custom-made set of steak knives with special buffalo head handles and a set of a dozen shower curtains.
Those sources said they had uncovered no evidence of personal gifts to Rickover from the other companies, but they said those companies gave promotional gifts to Rickover, including submarine models and specially engraved glasses.
Rickover did not respond yesterday to requests for comment. In an interview last July with The Washington Post, Rickover said he accepted gifts from General Dynamics and other shipbuilders when the companies launched ships and that he considered the practice proper.
"I know I got some gifts on the occasions of the launchings," he said, adding that he did not report the gifts to the Navy and did not know the value of the gifts. He acknowledged that "over a period of years, it could add up to something."
Rickover, who retired in 1982, was a frequent and harsh critic of General Dynamics' shipbuilding practices. He denied that he ever favored the company because of the gifts.
A provision in Navy contracts, including those with General Dynamics for the construction of the 688-class attack submarines and Trident ballistic missile submarines, provides for cancellation if a company gives gifts or free entertainment to government employes "with the intent to obtain a contract or favorable treatment."
Dingell's Nov. 16 letter to Lehman said that his subcommittee has obtained documents indicating that Gorden E. MacDonald, General Dynamics' chief financial officer, instructed an aide to buy the jewelry and directed the aide "not to tell anyone about the gifts because it could be very embarrassing to me and to General Dynamics."
The new investigative panel, which will have three members, will allow the four companies "to dispute evidence of gratuities," Lehman said.
Officials of the four companies would not comment on Lehman's letter.
Dingell said yesterday that he does not consider Lehman's letter to be responsive to his request. He criticized the investigative panel as a "blue-ribbon commission" that will "study the issue to death . . . . No more study is needed. Action should be taken immediately."