Pentagon Formally Urged to Bar 3 at General Dynamics
The Pentagon’s inspector general, citing possible violations of federal securities laws and other statutes, has recommended formally that three top officers of General Dynamics Corp. be suspended from doing business with the government, according to a memorandum obtained Friday.
In the memorandum, dated Thursday, Pentagon Inspector General Joseph H. Sherick charged that board Chairman David S. Lewis and Executive Vice Presidents Gorden E. MacDonald and George Sawyer “lack the business integrity and honesty required of high-level officials in corporations that do business with the government.”
Former Navy Official
Last month, Pentagon officials said that Sherick would recommend barring Lewis and MacDonald, but no mention had been made of Sawyer, a former assistant secretary of the Navy allegedly courted by General Dynamics before he left his government post.
Sherick said in the memorandum that laws prohibiting the making of false statements by federal officials may have been violated in connection with Sawyer’s joining the firm in May, 1983.
All three General Dynamics officers have vehemently denied wrongdoing in connection with Sherick’s allegations--including overbilling--which have been brought up by House and Senate committees investigating the firm’s military contracts.
Although Sherick’s recommendation was addressed to Navy Secretary John F. Lehman Jr., Pentagon officials said that Defense Secretary Caspar W. Weinberger would be involved in deciding whether Lewis, MacDonald and Sawyer should be barred from participating in further defense work. In such a case, the three men would have to resign their posts before General Dynamics could receive additional government contracts, federal officials said.
Sherick noted that the Securities and Exchange Commission is investigating whether General Dynamics executives intentionally engaged in stock manipulation in issuing a 1979 press release that falsely stated that the first nuclear-powered Trident submarine would be delivered in October of that year, despite evidence that the boat’s completion would have to be delayed until late 1980.
Sherick’s report cited also previously acknowledged gifts of jewelry from the company to retired Adm. Hyman G. Rickover while Rickover was head of the Navy’s nuclear submarine project. Such gifts may have violated prohibitions against gift-giving by contractors, he said.
In referring to Sawyer, Sherick said that discussions about his employment should not have occurred while he was still working for the Navy. The inspector general suggested also that false statements may have been made when Sawyer and General Dynamics denied that any job negotiations had occurred.
