Defense Department spokesman Michael I. Burch said yesterday that he was an "innocent victim" of an attempt by General Dynamics Corp. to gain government reimbursement for an invitation a company official gave him for a veterans' organization dinner in 1983.
At the same news conference, Burch announced that the Pentagon's inspector general will formally recommend that the two top executives of General Dynamics be barred or suspended from participation in federal contracts because of the company's $244 million in improper overhead charges to the government.
Burch also confirmed that 45 of the nation's top 100 defense contractors are under criminal investigation. In some cases, he said, the investigations focus on their subcontractors and suppliers.
The invitation to Burch surfaced as an issue this week after Inspector General Joseph H. Sherick informed Congress that he was investigating several senior Pentagon officials who attended the annual dinner of the Military Order of the Carabao and other affairs as guests of General Dynamics.
Burch said that Alvin Spivak, spokesman for General Dynamics' Washington office and a member of the Carabao organization, invited him in January 1983 to attend the order's annual dinner, called the "Wallow," at the Sheraton Washington Hotel.
The order is composed of military veterans who served in the Philippines, and is named after the carabao, a water buffalo indigenous to Southeast Asia.
Burch, then a military aide to the assistant defense secretary for public affairs, said he accepted the invitation because Spivak had indicated that Burch would be a guest of the order, not of General Dynamics.
General Dynamics later billed the government for the $60 tickets as an overhead expense associated with the costs of weapons production, according to Burch, who said the claim was submitted "without my knowledge." Contractors are prohibited from billing for entertainment expenses.
"Request for reimbursement is completely improper and I feel that I was an innocent victim," he told reporters at a Pentagon news conference.
Under the Pentagon's Standards of Conduct, officials are prohibited from receiving gratuities from "any person engaged in or seeking business or financial relations" with the Defense Department.
Spivak said in a telephone interview that Burch, now assistant secretary for public affairs, received one of his two free tickets to the dinner, joining a table of eight other guests paid for by General Dynamics. When the firm sent a check to the Carabao order to pay for the dinner, it included a list of all 10 participants, including Burch, Spivak explained.
General Dynamics later billed the government for the eight guests, a move Spivak says was a "mistake." Pentagon auditors challenged the billing as improper, and the firm eventually withdrew its claim, he said.
Burch's name was discovered by congressional investigators last year when they were examining General Dynamics' vouchers for overhead claims and came upon the canceled check and list of guests at Spivak's table at the Carabao dinner, he said.
"It's all a mistake," Spivak said. "Burch's ticket was never paid for by General Dynamics or the government."
Burch also told reporters that in a few days Defense Secretary Caspar W. Weinberger would receive a recommendation from Sherick urging the debarment from future defense contracts of the firm's chairman, David S. Lewis, and its chief financial officer, Gorden E. MacDonald.
If Weinberger upholds the recommendation, he said, the corporate officials will have to step aside or jeopardize General Dynamics' standing as a candidate for defense work.