Justice Dept. May Have Conflict, Investigator Says : Outside Counsel Urged in Meese Fee Request

Jacob A. Stein, the independent counsel who found no basis for criminal charges against Atty. Gen.-designate Edwin Meese III, has proposed that an outside party be named to advise a special court on whether to pay the $700,000 Meese is seeking as reimbursement for his defense fees, it was learned Thursday.

In a sealed filing with the special court, Stein suggested that the Justice Department--from which the judges sought views on the fee--has a conflict in the case because the reimbursement is being sought by the man named to head its operations, a source familiar with the matter said.

But Stein took no position on whether the $700,000--more than twice the $320,000 cost of his investigation--is out of line, the source said.

The independent counsel declined comment on the action and said that he had not seen the documents submitted by the Justice Department, in which government attorneys questioned whether all the fees are covered under provisions of the Ethics in Government Act.

The special three-judge court ruled Thursday that it will make public today Meese’s application for reimbursement “with supporting memorandum and affidavits.”

The Senate Judiciary Committee is scheduled to open hearings on Meese’s nomination Tuesday, and the judges, in deciding to unseal the documents, said it appeared to them “that there is a legitimate public interest in the contents of the application and supporting papers.”

Before the court issued its ruling, aides to several members of the committee said that they doubted the fee would become a major issue during the upcoming hearings. But they said that the committee members might ask to examine the court’s sealed papers before voting.

The Justice Department’s statement on the issue is said to note that the Ethics in Government Act makes a distinction between legal fees incurred because a person is a government official and those that any private citizen would have to pay. High government officials covered by the act are entitled to full or partial reimbursement if they would not have incurred the fees as private citizens, it notes.

Thus, the statement implies that some of the allegations against Meese might have prompted a standard federal investigation, even if he had not been counsel to the President, his current post. It could not be learned which allegations the department believes might have merited a federal investigation.

Stein’s investigation, completed last September, covered 11 allegations. They ranged from whether there were improprieties in his Army Reserve promotion to colonel to any relationship between loans made to Meese or his wife and the appointment to federal jobs of individuals involved in the loans.