Mary Ann Gilleece, while serving as the Pentagon's top procurement regulator, wrote letters to 28 defense contractors seeking a $30,000-a-year retainer for a private consulting service she and her executive assistant had planned to provide after leaving government.
According to a copy of a proposed two-year agreement sent to the contractors, Gilleece offered in return for the retainer and "all expenses incurred" to serve as a "coordinator in procurement matters," accompanying company executives to meetings with government acquisition officials and members of Congress.
The letters were sent in May and June to the Defense Department's top weapons manufacturers, whose multibillion dollar-a-year business was directly influenced by Gilleece in her job as deputy undersecretary of defense for acquisition.
Nine of the companies that were solicited by Gilleece and assistant Carl Michael Mayer -- McDonnell Douglas Corp., Boeing Co., Honeywell Inc., General Electric Co., Sperry Corp., United Technologies Corp., Rockwell International Corp., Raytheon Co. and Westinghouse Electric Corp. -- are under criminal investigation by the Pentagon's inspector general for unrelated procurement abuses.
Gilleece lost her post in a Pentagon reorganization earlier this month but continues to work for the new assistant defense secretary for acquisition, James P. Wade, who has called her a "valued member of my staff." Mayer remains her executive assistant.
Earlier news stories had reported that she sent out letters to the contractors soliciting their business for a new firm she intended to set up after leaving the government. But Gilleece, who has declined to be interviewed, has refused to release copies of the letters or name the firms she approached.
A copy of the proposed agreement and list of companies was released yesterday by Rep. John D. Dingell (D-Mich.), whose staff obtained them from the Pentagon's ethics officer. Gilleece has refused requests by Dingell's staff to be questioned on the matter.
Gilleece submitted the materials to Wade in disqualifying herself from official dealings with the contractors "by reason of a financial interest in the companies."
It is unclear whether any of the companies signed the agreement. But in a June 18 memorandum to Wade disqualifying herself from dealing with 10 contractors, she wrote that "four other companies have informally indicated some interest in my future activities, but the contract has been so tentative that I do not foresee any possibility of financial interest."
Pentagon spokesman Fred S. Hoffman said last month that "there's no reason to challenge the propriety" of Gilleece's solicitations because she formally disqualified herself from official dealings with the companies.
But the first notice of disqualification sent to Wade is dated June 14, three weeks after her solicitation letter was sent May 21 to Magnavox Electronic Systems Co. and more than a week after she contacted eight other contractors.
Gilleece sent contractors a prospectus of her and Mayer's company, named Procurement Strategy Corp. (PSC), which promised to assist contractors "to compete for government business with confidence and success."
"PSC provides a thorough understanding of the internal forces motivating government customers, particularly the Department of Defense . . . ," the prospectus said.
Gilleece, who had overseen the Pentagon's $100 billion-a-year procurement package since April 1983, is known as a staunch backer of the defense industry.
She has lobbied in Congress against procurement reforms, recently angering Sen. Charles E. Grassley (R-Iowa), who protested a memo she drafted for House-Senate conferees. The memo opposed his plan to test contractors' labor productivity by requiring them to record the time it takes to complete a weapons project -- a measure opposed by the defense industry.
After Gilleece acknowledged at a hearing this week that she wrote the memo at the time she was seeking business from contractors, Grassley decided to ask the inspector general to investigate possible conflict of interest.
Another memo Gilleece issued last spring softened the impact of a rule requiring that contractors certify under oath that their overhead charges are appropriate. Her memo freed contractors from submitting certificates with each bill unless the billing rates were adjusted after March 20, 1985.