Expenses: A Defense Firm Picks Up the Tab

Since 1978, General Dynamics Corp. has faced a series of accusations that it bilked the Government of hundreds of millions of dollars in construction-cost overruns for the Trident submarine. Last week it was disclosed that the nation’s largest arms manufacturer, with $7.2 billion in military contracts last year, had withdrawn $491,840 in charges to the Defense Department for air travel by its chairman, David S. Lewis, and other executives. The bill included 76 flights that Lewis made in Sabreliner and Gulfstream III company jets from General Dynamics headquarters in St. Louis to his farm in Albany, Ga., and 67 flights he made to San Francisco and Wichita to attend board meetings of other firms where he served as a director.

Lewis’ charges were a fraction of the $22 million in air-travel costs between 1978 and 1983 that General Dynamics had billed and Pentagon auditors have challenged. The company insists that Lewis’ costs “were proper under the terms of (our) contract.” Said a corporate spokesman: “The company told the Government the only reason it was withdrawing the claim was the adverse and untrue publicity which has surrounded this issue.” Said a Pentagon official: “We’ve read about it, we’ve heard about it, we’re studying it.”