The Boeing Co. billed the Pentagon for nearly $127,000 in political contributions in 1982, attempting to pass along the costs to U.S. taxpayers as part of the price of building weapons systems.
But Boeing agreed to withdraw nearly half of the request yesterday after a Pentagon audit questioning the contributions was made public.
The auditors challenged the political contributions and $36,200 in other Boeing bills in 1982, including donations to the Salvation Army and tickets to social functions ranging from a Boy Scout golf tournament to a Hanukah dinner hosted by the Jewish National Fund. Boeing spokesman Harold Carr said the bills cover legitimate expenses for "public and community relations" except for certain political contributions mistakenly submitted.
"It may have been a bookkeeping error," Carr said of $61,075 in donations to politicians in Washington state, where the aerospace giant is based.
But he defended Boeing's billing for $36,200 in "community donations" and $65,772 in political contributions to local Democratic and Republican parties and campaign organizations, state political action committees and groups promoting various voter referendums in Washington state.
"The other charges are worth putting on the table for the negotiating process," Carr said. "Just like everything else, the costs of doing business have to be paid by someone."
The charges are among $14.9 million submitted by certain defense contractors to be challenged by the Defense Contract Audit Agency. Included are $4.6 million for General Dynamics and $4.5 million for Rockwell International.
None of the charges questioned by the auditors has been paid, but they are likely to trigger protests in Congress, where lawmakers out to cut military spending have blamed defense contractors for waste and fraud. Pentagon auditors last year told Congress that defense contractors are "incurring over $140 million annually in public relations costs under defense contracts."
"It's tough to be shocked at waste in weapons programs any more, but these billings go beyond impropriety," Rep. Fortney H. (Pete) Stark Jr. (D-Calif.), whose office released the audit, said yesterday. "The contractors either take us for fools or they're incapable of understanding what constitutes a legitimate bill."
Defense contractors are allowed by the Pentagon to charge the government for certain public relations expenses as part of general overhead added to weapons systems.
But contractors and critics alike complain that the regulations and vague.
Carr said Boeing believes it is entitled to bill the government for "public and community relations," a category that covers costs of supporting or opposing school, municipal and legislative issues as well as "donations to benefits and other community efforts."
The company's most expensive contribution to a voter-issue drive was $25,000 for the "Kill 435 Now Committee," which Carr said was set up to lobby against a sales tax on food in Washington state. He said the Pentagon is willing to absorb "costs dealing with employe morale," and since rising food prices would affect Boeing workers, "we consider the charges allowable."
Asked why U.S. taxpayers should pay for this, Carr said, "It's certainly a debatable issue."
Among other charges questioned by auditors were those listed under "entertainment," including $1,200 for the Hanukah dinner, $500 for the Boy Scout golf tournament, $1,500 for an Anti-Defamation League award banquet, $250 for a Japanese-American Citizens League banquet, $500 for a University of Washington Hall of Fame banquet and $1,195 for local Chamber of Commerce events.