Getting Tough?

“Nauseating,” said Defense Department Spokesman Michael Burch. He was talking about a long list of alleged billing abuses by General Dynamics, the nation’s largest military contractor, with $7.2 billion in Pentagon business in 1984. According to testimony before the Oversight and Investigations Subcommittee of the House Energy and Commerce Committee, the company billed the Government for an $18,000 country-club admissions fee, $1,125 worth of jewelry given to then Admiral Hyman Rickover’s wife and the charge for boarding a company executive’s dog at a kennel. Last week Defense Secretary Caspar Weinberger suspended payments of roughly $40 million to General Dynamics for at least 30 days while the Pentagon investigates whether the company has bilked the taxpayers by billing the U.S. for corporate entertainment, personal expenses and political contributions.

The suspended payments represent less than 10% of General Dynamics’ monthly billings to the Defense Department and a piddling amount by Pentagon standards. Weinberger was adamant, however, in describing the move not simply as a public relations gesture but a first strike in a “get-tough” policy on defense contractors. In a speech to an American Legion gathering in Washington, Weinberger announced that the Pentagon’s auditors would conduct a general review of billing procedures and claims for overhead expenses by all major military contractors. The Defense Secretary added that he had asked the Justice Department to examine possible criminal violations by General Dynamics executives.

Defense Department auditors are also looking at Boeing Co. for billing a reported $127,000 of political contributions in 1982. While the aerospace company has already withdrawn reimbursement requests for some of its donations, it stands by some $65,000 in political expenses. Meanwhile, General Dynamics, which makes the F-16 fighter, the Trident submarine and Tomahawk cruise missiles, pledged to “satisfy the Defense Department’s concerns regarding the validity of its billing procedure.”

Congressional skeptics suggest that Weinberger’s policy is a further bit of bluster in his effort to win approval from Congress of $277.5 billion in fiscal 1986 defense spending, a $31 billion increase over the current budget. The Pentagon suspended payments to Hughes Aircraft last year for quality- control problems but then resumed them within a few months. Said Wisconsin Senator William Proxmire, a veteran critic of the Pentagon: “It’s a beginning. But if this is all there is to it, it’s not going to be enough.”