The chairman of General Dynamics Corp. was attacked yesterday for discussing a job with an assistant Navy secretary and then remaining silent when the official allegedly misled the Pentagon about the timing of the negotiations.
House subcommittee members said that company executive David S. Lewis discussed a possible job with the Navy official, George A. Sawyer, over three months in 1983 when Sawyer still was overseeing the firm's shipbuilding contracts. The lawmakers said that Lewis raised no objection when he later learned that Sawyer had failed to mention the job discussions in a statement submitted to the Pentagon.
Lewis told the Energy and Commerce subcommittee on oversight and investigation that he saw no problem with the discussions because they were "exploratory" and not negotiations.
A federal grand jury in New Haven, Conn., is investigating whether Sawyer violated federal conflict-of-interest laws in moving from his job as the Navy's assistant secretary for shipbuilding to became a vice president and director of the nation's largest defense contractor. Sawyer could not be reached for comment yesterday.
The allegations surfaced after Lewis, in his second appearance before the panel in four weeks, announced that General Dynamics is withdrawing $23 million in disputed charges that it has billed the Pentagon. This is part of more than $63 million in company billings for overhead that Pentagon auditors have challenged for 1979 through 1982.
Lewis said the St. Louis-based company has hundreds of employes reviewing vouchers to ensure that it is not charging the government for such previously disclosed items as country club dues, entertaining military officers and boarding an executive's dog. "We are determined to correct the problems that we have had," Lewis said.
The action comes after Defense Secretary Caspar W. Weinberger slapped a 30-day freeze on overhead payments to General Dynamics, pending further review.
Subcommittee Chairman John D. Dingell (D-Mich.) questioned that review, saying the Pentagon has sent only one auditor to General Dynamics. Rep. Ron Wyden (D-Ore.) accused Weinberger of "hypocrisy" for "posing as an aggressive investigator of improper defense billings."
The panel began yesterday by playing a tape of an Aug. 25, 1981, conversation between Lewis and P. Takis Veliotis, a former company vice president who is now in Greece as a fugitive from kickback charges. The conversation, taped by Veliotis, came during a bitter dispute in which the Navy was refusing to give General Dynamics more contracts unless it dropped a $100 million claim against the Navy on several submarines that were behind schedule.
Lewis said on the tape that Sawyer had run out to his car after a Pentagon meeting and asked for a ride. Lewis said that Sawyer told him, "We've got to figure out a way to sit down here and negotiate some contracts, give you some stuff that maybe we can do to find a solution . . . . You've got to trust me . . . . I want to have terms that get you out of this problem."
General Dynamics later dropped the claim and received new submarine contracts in a controversial settlement with the Navy.
In March 1983, Lewis told the panel, he called Sawyer and asked him to visit the St. Louis headquarters "with the idea that he might be interested in employment . . . . It was exploratory on both sides."
Lewis said General Dynamics paid for Sawyer to fly to St. Louis in March and to two other out-of-town interviews over the next two months. The panel said Sawyer did not list these flights on his financial disclosure statement.
Lewis confirmed that he had other telephone discussions with Sawyer and had made notes about Sawyer's possible salary and assignment.
On May 5, 1983, Sawyer approved General Dynamics as a qualified bidder for a group of Navy nuclear submarines. On May 31, Sawyer said he had accepted a job with General Dynamics. The Navy's general counsel approved the move based on a letter from Sawyer that said he had disqualified himself from overseeing General Dynamics after May 5 and had not negotiated with the company about the job until May 20.
Rep. Gerry E. Sikorski (D-Minn.) said Lewis had seen Sawyer's letter and knew that it was "inaccurate" and "based on false statements," but failed to tell anyone. Lewis replied that he did not consider the job talks to be "negotiations" until late May.
Earlier, James Ashton, former assistant general manager of the company's Electric Boat shipyard, told the panel that he tried to warn Lewis and other executives in 1981 that General Dynamics was facing huge cost overruns on its Trident submarines. He said Lewis was ignoring internal audits in publicly blaming the construction delays on the Navy.
Ashton said the problem was "mismanagement to a degree I had never seen before," but that he was forced out of the company because he "did not support the party line in blaming the Navy."
The panel also disclosed that General Dynamics:
* Charged the Pentagon more than $250,000 a year for a South Korean consultant whom Lewis said helps the company's marketing efforts in that country. Wyden said that fees to this and other foreign consultants were part of "a whole host of questionable payments being made overseas" by General Dynamics.
* Charged the government $546 for a boxspring and mattress for an executive's stay at a St. Louis hotel during board meetings; the hotel's beds apparently were uncomfortable.
* Billed taxpayers for one executive's babysitting fees.
* Submitted more than $5 million in entertainment vouchers without listing the persons being entertained. These "blank" vouchers included 528 business conferences charged during 1982 by E.J. LeFevre, head of the company's Washington office. Dingell said this amounted to 2 1/2 conferences a day.