Former assistant Navy secretary George A. Sawyer was indicted yesterday on charges of violating conflict-of-interest laws and lying about the circumstances under which he negotiated a job as a vice president of General Dynamics Corp.
Sawyer, 54, was in charge of the Navy's shipbuilding program, including the segment involving submarines from General Dynamics, when he entered into three months of job discussions with the St. Louis-based company in 1983.
According to the indictment, Sawyer concealed and covered up the fact that he had flown to job interviews in St. Louis and Chicago during this period and that General Dynamics had paid $833 for his air fare.
Sawyer said in a statement that the charges are "baseless" and that he expects to be vindicated. "I am deeply distressed that the prosecutor has sought and obtained an indictment against me," he said. "I can only assume that it is the result of the intense political pressure being brought to bear on the Justice Department to take some action against General Dynamics."
Sawyer is among hundreds of federal officials who have taken jobs with the industries they once regulated, a practice that some critics blame for the Defense Department's procurement problems and its close relationship with military contractors.
The two-count indictment, returned in U.S. District Court in Alexandria, is the first criminal charge growing out of the Justice Department's wide-ranging investigation of General Dynamics, the nation's third-largest defense contractor. The department's fraud section is continuing to investigate allegations involving submarine cost overruns and fraudulent billings.
General Dynamics spokesman Alvin Spivak said the company "is very disappointed by this action" and has granted Sawyer a leave of absence. If convicted, Sawyer faces a maximum of 10 years in prison and $20,000 in fines.
General Dynamics Chairman David S. Lewis has said in congressional testimony that he first invited Sawyer to St. Louis for discussion of a possible job in March 1983.
Lewis, who plans to step down this year, testified that he had several telephone conversations with Sawyer about his possible salary and assignment. He also said that the out-of-town interviews in March and May 1983 were paid for by General Dynamics.
In his federal financial disclosure statement, however, Sawyer reported no gifts or travel reimbursements in excess of $250. The indictment charged Sawyer with falsifying that document.
On May 5, 1983, Sawyer approved General Dynamics as a qualified bidder for a group of Navy nuclear submarines. On June 1, he announced he had agreed to become General Dynamics' vice president for land systems and international marketing.
Sawyer then wrote the Navy's general counsel that he had disqualified himself from overseeing General Dynamics after May 5 and had not negotiated with the company about the job until May 20. The general counsel ruled there was no conflict in Sawyer accepting the job.
Sawyer was prominently mentioned in an Aug. 25, 1981, telephone conversation between Lewis and P. Takis Veliotis, then a company vice president and now a fugitive on unrelated charges. The conversation, taped by Veliotis, occurred during a bitter dispute in which the Navy was refusing to give General Dynamics new contracts unless the contractor dropped a $100 million cost-overrun claim against the Navy on several overdue submarines.
Lewis said on the tape that Sawyer had run out to Lewis' car after a Pentagon meeting, asked for a ride and 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 sub contracts in a controversial settlement with the Navy.