GAO questions $554,000 in Martin expenditures


Martin Marietta Corp. spent about $554,000 from 1986 to 1991 on questionable entertainment costs in connection with its management of certain contracts for the Department of Energy, according to a Government Accounting Office report released yesterday.

The money was spent on such things as alcoholic beverages, golf outings, musical performances, dinners, luncheons, receptions, tours and a chartered boat ride.

The funds were part of $25 million that Martin Marietta Energy Systems of Oak Ridge, Tenn., spent on marketing efforts over the period to sell enriched uranium for the Department of Energy.

Athough the impact of the report, if any, is unclear, the development came at a time when Bethesda-based Martin Marietta is engaged in a bidding war with Loral Corp. for the missile and aircraft division of LTV Corp.

In releasing the GAO report, Rep. Howard Wolpe, D-Mich, said: "It appears that more than uranium was enriched in this program. This report sends the disturbing message that the DOE is not effectively controlling the activities of its contractors -- and is even sanctioning and participating in inappropriate activities."

Rep. John D. Dingell, D-Mich, the chairman of the House Energy and Commerce Committee, said, "It appears that the Department of Energy and its contractors followed the sterling example set by General Dynamics, Stanford [University] and others in throwing lavish parties and sticking the taxpayer with the tab."

The GAO report says the Energy Department and Martin Marietta Energy Systems did not adhere to criteria the department has established to manage and monitor entertainment and alcoholic-beverage costs.

Charles P. Manor, a Martin Marietta spokesman, declined to comment.

Late yesterday, the Energy Department said that department oversight of the uranium-sales program includes an annual evaluation of marketing expenses and that expenses incurred for 1989, 1990 and 1991 -- the last years for which data were available -- were found to be appropriate.

It said expenses were covered by fees charged to customers and involved no cost to taxpayers.

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