Paisley’s Role in Aegis Contract Worth Scrutiny, Lawmaker Says

Rep. James J. Florio (D-N.J.) said Tuesday that the role of former Assistant Navy Secretary Melvyn R. Paisley in the controversial award of a multibillion-dollar Aegis ship-defense system contract to Unisys is “deserving of intense scrutiny.”

The congressman, who had opposed the award when it was made in 1986, said subsequent disclosures in The Times and Defense News suggest that the contract was awarded for reasons “other than national security.”

He said that in his dealings with Paisley and former Navy Secretary John F. Lehman Jr. he had observed “an almost pathological driving” to award the contract to Unisys. Florio said that “with what we’re reading in the papers about Paisley, in particular, there may have been other factors involved.”

Bidding Rules Revised

The Times reported Tuesday that Paisley abruptly revised bidding rules on the lucrative Aegis contract during a period when his wife was receiving compensation from a company formed by a principal Unisys lobbyist, William M. Galvin. The amount of “compensation for services” Vicki Paisley received in 1986 from VAMO Inc. was not specified in financial disclosures filed by her husband but her interest in the firm was listed at up to $50,000.

Galvin, his wife Evelyn, and Alice M. Backo were listed on Virginia corporation records as the original directors of VAMO. Vicki Paisley’s name did not appear on original incorporation documents examined by The Times. Galvin remained the registered agent of the company until March, 1987, when he was replaced by Vicki Paisley. She had earlier become the company’s president.

Attorneys for the Paisleys said it was their understanding that Galvin helped set up the company for Vicki Paisley but had no interest in it. VAMO records have been seized by the FBI, the attorneys said.

Focus of Federal Inquiry

The relationship among Paisley, Galvin and Unisys executive Charles F. Gardner is a principal focus of the federal investigation into widespread allegations of fraud, bribery and bid-rigging on defense contracts. Gardner, now a defense consultant with business ties to Galvin, was responsible for the Aegis project while at Unisys.

Florio said reports that Galvin had boasted that he could use his influence with Paisley to win the contract for Unisys suggested that Galvin “was able to use his ‘in’ to make things turn out the way they did.”

The 1986 contract represented a substantial portion of the $9-billion future Aegis awards to be split between RCA Corp. and new second-source contractors. The Navy divided the second-source contract into six parts but Paisley abruptly decided to consolidate the project into a winner-take-all package.

Only Firm in Position to Bid

The change left only Unisys in position to bid on the contract.

Florio, whose district includes many RCA employees (the RCA plant that lost the Aegis contract is in a neighboring district), fought plans to split the Aegis contract between RCA and second-source contractors. He said subsequent disclosures suggest that “individual greed” rather than “the interests of national defense” may have influenced the process.

Paisley attorney E. Lawrence Barcella Jr. said changes affecting the Unisys contract were made to “streamline the bloated procurement process that was costing the government money.” He said members of Congress had previously praised Paisley’s contributions to that effort.