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General Dynamics Withdraws Bills But Criticism Continues

March 26, 1985

WASHINGTON (AP) _ General Dynamics has withdrawn $23 million in bills it submitted to the Pentagon for items such as cookbooks and beds, but the nation’s biggest defense contractor is still under fire from members of Congress angry ab respond, capped a daylong session of the House Commerce investigations subcommittee at which Lewis was repeatedly criticized for company actions.

General Dynamics, the nation’s biggest defense contractor, builds F-16 jets for the Air Force, M-1 tanks for the Army, most of the Navy’s submarines, and a wide range of other equipment and weaponry.

In the wake of problems at the firm’s Electric Boat submarine-building division, General Dynamics is now being investigated by three congressional subcommittees and various federal agencies looking into allegations of stock manipulation, false billing, illegal gratuities, and security violations.

Three weeks ago, Defense Secretary Caspar Weinberger suspended overhead, or administrative, payments to the company for 30 days because of revelations that the Pentagon has been billed for items such as country club memberships and boarding an executive’s dog.

Lewis, admitting the billing practices ″left much to be desired,″ told the subcommittee that the firm is withdrawing $23 million of the $170 million in claims it billed the Pentagon from 1979 to 1982.

Those claims include $546 for a bed in 1980 and a December 1982 bill of $120 for 10 cookbooks, according to documents released Monday by the panel.

The company is also changing its procedures for billing the Pentagon to make sure that future claims can be fully justified, Lewis said.

The new policies ″will be totally satisfactory to the Department of Defense,″ Lewis said.

He also defended the 1983 hiring of George Sawyer, who moved to General Dynamics from the Pentagon, where he was assistant Navy secretary in charge of shipbuilding and who was involved in the controversy over cost overruns on the sub contracts.

Lewis said he called Sawyer in March 1983 because he heard Sawyer ″was looking for a job.″ He said that in negotiations with Sawyer, General Dynamics’ officials tried to make sure there was no conflict of interest.

Lewis acknowleged he was quizzed about Sawyer recently when he was called before a federal grand jury in Hartford, Conn., which is apparently investigating Sawyer’s hiring.

Lewis also criticized James R. Ashton, a former General Dynamics official who was moved to the Electric Boat division in 1980 and left within a year after he was passed over to be general manager of the Groton, Conn., facility.

Ashton’s boss at Electric Boat was P. Takis Veliotis, who is now a fugitive in his native Greece from federal charges of perjury and taking kickbacks. Lewis last month blamed problems at Electric Boat on Veliotis.

Ashton ″somehow could never develop a working relationship that was suitable,″ Lewis said.

However, Ashton appeared before the subcommittee prior to Lewis and told a different story.

Ashton said he moved to Groton after successfully running the F-16 program and told the panel that he quickly concluded that the cost overruns on the subs were due to mismanagement rather than changes ordered by the Navy.

Ashton said that when he was passed over for promotion, he was told it was because he wasn’t a ″team player″ and speculated the action was because ″I did not support the party line of blaming the Navy.″

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