The General Dynamics Corp. got a new chairman yesterday largely because of a former executive-turned-nemesis of the corporation named P. Takis Veliotis.
David S. Lewis, who retired under fire yesterday as chief executive of the firm that has become a symbol of defense contractor abuses, was brought down at least in part by a vendetta conducted by Veliotis from Greece, where he now lives as a fugitive from an American indictment on kickback charges that was returned in 1983.
Veliotis revealed the depth of his antipathy toward Lewis and General Dynamics when he recently told a reporter for The Washington Post, "I'll go to jail on the condition that Dave Lewis is in the same cell."
For the past year in Athens, Veliotis has entertained a steady parade of journalists, congressional investigators and Justice Department probers with detailed accounts -- including 20 hours of secretly taped conversations -- of alleged wrongdoing inside the corporate hierarchy of General Dynamics.
Although General Dynamics has denounced Veliotis -- its own former vice president -- as lying and vindictive, his accusations revived Defense Department and media interest in the corporation's ethics and billing practices in building nuclear submarines for the U.S. Navy.
Living in a three-story villa complete with elevator and rooftop swimming pool in the affluent Ekali section north of Athens, with a red Corvette Stingray and silver Mercedes in the garage, Veliotis has wielded the American media as both a prod to interest official investigators in his tale and a whip to lash his former employer for what he contends is a betrayal after years of service.
Veliotis has talked to, among others, The New York Times, The Wall Street Journal, United Press International and Business Week; he has also agreed to be interviewed by Mike Wallace of CBS' "60 Minutes" for a segment to be aired next fall.
"The Justice Department doesn't do anything until there's a story in the newspaper," Veliotis is fond of saying.
Veliotis, who has a penchant for mystery, has doled out his allegations sparingly. Those intrigued enough to play the game have often had to make the long journey to Athens again and again.
A Greek native who emigrated to Quebec after World War II, Veliotis worked his way up through the ranks to become president of a Canadian shipbuilding company. He joined General Dynamics in 1973 as general manager of the company's Quincy Shipbuilding Division in Massachusetts. His first four years were spent overseeing construction of seven liquified natural gas tankers designed to carry fuel from gas fields in Indonesia to industries in Japan.
Promoted to oversee General Dynamics' Electric Boat division and then serving as the company's executive vice president for marine and international sales, Veliotis' career stopped dead in the water when it became clear that he was being investigated by the Justice Department. In June 1982, citing the need to tend his critically ill mother, he resigned from the company and began spending most of this time in Greece, where he holds citizenship by birth.
He was subsequently indicted for allegedly splitting with another General Dynamics executive $2.7 million in kickbacks from a subcontractor supplying insulation for the LNG tankers.
In the summer of 1983, his attorney told federal investigators that if Veliotis was subpoenaed he would plead the Fifth Amendment to avoid self-incrimination. The investigators gained access to Veliotis' Swiss bank accounts that allegedly held some of the kickback money he received from 1974 to 1978.
After his indictment in September 1983, General Dynamics took legal action to freeze about $7 million in his assets, including bank accounts, a stock portfolio, a mansion in Milton, Mass., and a condominium in Florida.
That so enraged Veliotis that in January 1984 he signaled his willingness to talk to federal investigators without any promise of immunity. The initial talks collapsed in rancor in May, however, when he refused to turn over any of his tapes.
On Memorial Day of last year, Veliotis said he received a death threat and ended all discussions with reporters and investigators. That moratorium lasted until July 1984, when he gave a Washington Post reporter the first of numerous recordings of conversations with Lewis and Adm. Hyman G. Rickover, which Veliotis said were taped surreptitiously beginning in October 1977 with a simple Sony recorder next to his desktop speaker phone.
Among other things, the tapes indicate that General Dynamics executives delayed the public announcement of a schedule slippage in Trident construction to keep the price of the company's stock from dropping.
After more haggling, he subsequently provided the tapes to Justice Department investigators, who have talked to Veliotis in Greece at least four times. Staff members representing Sen. William Proxmire (D-Wis.) and Rep. John D. Dingell (D-Mich.) also have relied on Veliotis for details on the inner workings of General Dynamics, which have then been aired in public hearings.
Sources close to the on-going investigation of General Dynamics say investigators hope to make any case without relying on Veliotis, who has not been offered immunity from prosecution.