2 Lawmakers Are Big Help to Defense Industry Friends

WASHINGTON — When a tiny community college in Daytona Beach, Fla., held a golf tournament last May 16, a remarkable number of top executives of giant defense contracting firms came from as far away as New York and contributed up to $5,000 each.

The presence of these out-of-town big shots transformed the once locally oriented annual outing, which had never before raised more than $5,000, into a surprisingly lucrative fund-raiser that yielded a $110,000 bonanza for the struggling, two-year college.

Although college officials were stunned by their sudden windfall, they had no doubt what caused it. This year’s event was sponsored by the local Democratic congressman, Rep. Bill Chappell Jr., powerful chairman of the House Appropriations Committee’s subcommittee on defense appropriations.

Chappell, along with Rep. Roy Dyson (D-Md.), has been linked to individuals and businesses that are under investigation by the Justice Department in the current defense contracting scandal. He is well known on Capitol Hill to have a close relationship with many of the defense industry lobbyists who regularly visit his office and volunteer large campaign contributions in hopes of using his influence to obtain multimillion-dollar Pentagon contracts.

Neither Chappell nor Dyson has been accused of illegal conduct, nor are they believed to be targets of the current investigation. In fact, House Democratic leaders contend that their names were leaked to the press by Justice Department officials to ease the embarrassment the Pentagon scandal is causing the Republican Administration.

Yet both Democratic members of Congress socialize with some of the same defense industry consultants, such as Charles F. Gardner and William W. Roberts, whose offices or businesses have been searched in the fraud and bribery probe. In addition, the two officials have at times worked aggressively--sometimes in tandem--to force the Defense Department to do business with the defense contractors who have courted their friendship.

Although the criminal inquiry focuses primarily on the relationship between industry consultants and the Pentagon, their ties to Chappell and Dyson illustrate another controversial element of the highly complex defense procurement decision-making machinery. Industry officials often approach the fine line between legitimate lobbying and deliberate influence-buying when they do expensive favors for key members of Congress who are in a unique position to force the Defense Department to buy certain weapons.

Prompt Return Expected

And as the current inquiry also demonstrates, some defense representatives expect a prompt return on their investment, as they did in the case of Chappell’s golf tournament. In a telephone conversation secretly taped by the FBI between consultant Gardner and Westinghouse executive Milton Borkowski, Borkowski complained about the consultant’s request for a big sponsorship contribution.

“This kind of stuff is out of control . . . all this money that goes to charities,” the executive said, according to a transcript leaked to NBC News. Gardner bluntly reminded him that Westinghouse needed Chappell’s support to keep the Navy’s lucrative contract for the Aegis ship radar system. “Put it in, and get the $100 million and get the . . . program going,” he said. Westinghouse contributed $5,000 to “sponsor” one hole of the tournament.

To members of Congress who know them, Chappell and Dyson appear to have virtually nothing in common. Chappell, 66, is a 20-year veteran of Congress, a member of the Naval Reserve and a very low-profile lawmaker whom colleagues characterize as a typical “good ol’ Southern boy.” By contrast, Dyson, 39, a four-term member of the House Armed Services Committee, lacks Chappell’s influence and is one of the younger breed of politician who courts news media coverage.

Two Respond Differently

Characteristically, the two men have responded in different ways to the attention generated by recent reports that their names were mentioned in FBI wiretaps related to the Pentagon fraud investigation. Whereas Chappell has refused to comment on the specifics of the allegations, Dyson has strongly defended his actions on behalf of defense firms as consistent with the age-old tradition of pork-barrel politics.

“By and large, those companies are in my district,” Dyson said in an interview.

Nevertheless, Chappell and Dyson frequently advocate the same small procurement programs, benefitting the same defense companies, during the closed-door secrecy of their respective sub-committees. In fact, congressional sources say the two men appear to be working off the same list whenever procurement programs are being written into defense spending legislation.

Tries for ‘Good Relationship’

Although Chappell declined to be interviewed by The Times, Dyson acknowledged that he seeks Chappell’s support for Maryland defense contractors. “Do I try to have a good relationship with him?” he asked. “The answer is: Yes.”

Among other things, Chappell and Dyson were instrumental last year in forcing the Pentagon to purchase a shipboard electronic warfare system known as MK92 Coherent Receiver/Transmitter (CORT), manufactured by Unisys Corp., which the Navy had sought to cancel as obsolete. Consultant Roberts, a former Unisys employee and a subject in the current investigation, is known to have persuaded both congressmen of the merits of the system.

In leaked FBI wiretaps, which Justice Department officials have confirmed as authentic, Gardner, also a former Unisys executive, was overheard expressing confidence that Chappell would succeed in getting money for the MK92 CORT in a pending defense spending bill. “We are going to rely on Chappell not to give an inch to the Navy,” he said.

Complex Ties to Unisys

In fact, there appears to be a complex web of financial ties and friendships that bind Unisys, its consultants and the two congressmen. Records show Unisys has contributed more than $90,000 to congressional campaigns since 1985, about a third of it to Chappell and Dyson.

Roberts has been described by Chappell as an old friend, and Gardner helped to organize the Daytona Beach golf tournament. Roberts, Gardner and their family members also have contributed at least $10,000 to Chappell’s campaign since 1983. In addition, when Roberts and William F. Galvin, another figure in the probe, established a subcontracting business, sources said, they put it in the small Florida town of Palatka because it was in Chappell’s district.

Dyson is known to be an acquaintance of Roberts, Gardner and Galvin as well. The Maryland congressman made at least two junkets to New York City in the past year at the expense of Unisys, whose Long Island plant he visited, and met with Gardner. The second trip last May ended in tragedy when Dyson’s chief of staff, Thomas Pappas, committed suicide by throwing himself out a window on the 24th floor of the Helmsley Palace Hotel.

Bundle of Contributions

Aides acknowledge that Pappas and Dyson had returned from their earlier New York trip in July, 1987, with a bundle of campaign contribution checks from Unisys employees totaling at least $14,000. Although Dyson’s press secretary, Katie Tucker, initially contended that the checks were collected during a fund-raising party at a Manhattan hotel attended by Unisys employees, she acknowledged late last week that the money was given outright and no fund-raiser was ever held.

But Unisys consultants are by no means the only defense industry figures who have successfully prevailed on Chappell and Dyson to persuade Congress to fund programs opposed by the armed services. Even a tiny company such as Diagnostic-Retrieval Systems Inc. of Oakland, N.J., has received important assistance from the two congressmen to force the government to buy the SQR-17As, a submarine tracking instrument the Navy considers increasingly ineffective.

And since 1986, officials of Diagnostic-Retrieval have contributed about $7,000 to Dyson’s campaign and at least $2,000 to Chappell. Diagnostic-Retrieval has no facilities in the home district of Chappell or Dyson.

Increased Purchases

Likewise, both congressmen were instrumental last year in forcing the Navy to increase its purchases of the AN-BLD-1, a submarine direction-finding system produced by a division of Litton Industries in College Park, Md. Dyson said he advocated the system because the plant is in Maryland.

But Dyson also has received $8,500 in campaign contributions from Litton since he was elected to Congress and he admits making three winter excursions to Southern California to attend the Super Bowl and other events at Litton’s expense in the last two years. Litton Industries has contributed more than $14,000 to Chappell’s campaign since 1983.

Although the House ethics rule book states that members should not accept favors that might be construed as influencing their legislative work, it is by no means illegal or unusual for members of Congress to propose legislation that benefits those who have contributed to their campaigns, paid them honorariums or donated to charities in their names.

As chairman of the House defense appropriations subcommittee, Chappell is a natural target of industry lobbyists. Former aides said Chappell’s office in the Rayburn House Office Building is often jammed with people--mostly defense lobbyists--seeking an audience.

“It’s always bedlam there,” said one former aide. “His reception area and the hallway outside his office are always filled with people. Chappell’s got a personality. If he bumps into Joe Schmo he says: ‘Come on in.’ ”

Among those defense consultants frequently seen in Chappell’s office are Roberts and W. Leonard Killgore Jr., a former aide who now works for Oshkosh Trucks Inc. of Wisconsin and who also has been employed by Avco Corp. of Connecticut, both defense contractors.

Killgore is widely credited with winning congressional support for military equipment produced by his employers dating back to 1984, when Congress blocked the Army from seeking a second supplier of M-1 tank engines, which were manufactured by Avco.

$2,000 Honorariums Received

This year, Killgore was involved in a highly successful campaign to persuade members of Congress to require the Army to buy 500 Oshkosh trucks that the service did not want. Supporters of the project--including Dyson and Chappell--received $2,000 honorariums for attending a breakfast immediately before the crucial House vote on the issue.

Killgore also was a partner with George L. Dalferes, a vice president of defense firm Martin Marietta, in a 1984 financial deal that relieved Chappell of his liability in a debt-ridden health club in Ocala, Fla. The pair bought out Chappell and his partner and canceled their obligation for debts totaling $172,000. Fourteen months later, Martin Marietta bought the club from them.

Last week, documents containing financial details about the health club and Killgore’s role in it were sought in a subpoena delivered to a Florida lawyer who represented Chappell’s former wife in a 1984 divorce. Ocala attorney Edwin C. Cluster acknowledged Sunday that he has been subpoenaed to appear before a grand jury in Alexandria, Va., with the records, but he declined to elaborate.

Common Cause, the citizens lobby, last week asked the House Committee on Standards of Official Conduct to investigate whether the deal violated House ethics rules. Earlier, Chappell issued a statement insisting that he did not benefit from the transaction.

Refusal to Comment

So far, however, Chappell has refused to comment on the FBI wiretap transcripts obtained by NBC News that suggest that the small subcontractor owned by Roberts and Galvin in Palatka may have paid for a political consultant for his campaign.

The wiretaps, investigative sources confirm, discovered a Unisys official telling the consultant to bill the firm, Armtec, for his political work. The expense would then be passed along in billing to the Pentagon.

The law prohibits any direct corporate political donations.

Chappell’s close relationship with defense consultants is clearly reflected in the guest list of the Daytona golf tournament, which was named the First Annual Bill Chappell Golf Tournament this year in his honor. Among those who strolled the links with him that day were Galvin, Gardner, Roberts and consultant Kenneth F. Brooke, as well as James Kane, president of Kane Paper Corp.--all of whom have been the subjects of FBI searches or identified in court documents on the probe.

Executives of Grumman Corp., another giant defense contractor, were instrumental in getting a number of their subcontractors to donate to the tournament. Twelve of the 22 tournament sponsors were defense contractors.

Loopholes in Law

Charity functions such as the golf tournament occupy one of many loopholes in the law and House ethics rules, which strictly prohibit members from accepting direct payoffs from those who benefit from legislation. Chappell also appears to be one of many members of Congress who benefit from the lack of restrictions on income paid to their spouses.

Chappell’s wife, Jeane, receives a salary from a Washington firm known as Air Travel Service Inc., even though she spends much of her time in her husband’s office, arranging his social calendar and booking air travel for his staff. The Legal Times, a small Washington legal publication, said she frequently books travel for several defense contractors, including Lockheed Corp. and Textron Inc.

Appearance of Conflict

Even Chappell’s defenders in Congress acknowledge that he has risked the appearance of a conflict between his public duty and his private friendships.

Rep. Les AuCoin (D-Ore.), a liberal member of the subcommittee, said that, whenever Chappell proposes legislation that benefits one of his friends in the defense industry, the action inevitably raises the question of whether he is doing it for policy or personal reasons. AuCoin said the question is impossible to answer.

“Bill Chappell could be a brilliant hands-on legislator who properly second-guesses the bad procurement decisions made by the Pentagon, or he could be somebody who’s cozy with special interests,” AuCoin said. “I don’t believe the latter is true.”

As for Dyson, his colleagues on the House Armed Services Committee say his chief failing may be that he is too enthusiastic a booster for his home state. Indeed, Dyson boasts that his efforts have helped to make Maryland the ninth-biggest recipient of defense procurement dollars. “Of course,” he quickly adds, “I can’t claim all the credit for that myself. “

Staff writers John Hurst and Ralph Frammolino also contributed to this story.