Meese Panel to Hear Overruled Ethics Charges

An Office of Government Ethics staff report concluding that Atty. Gen.-designate Edwin Meese III twice violated federal ethics rules threatened Monday to prolong what had been expected to be speedy confirmation hearings.

The report by two staff lawyers was overruled by ethics office Director David H. Martin after he had discussed its findings with Meese’s lawyers and White House counsel Fred F. Fielding. Martin refused Monday to make the report public.

Lawyers to Testify

But Senate Judiciary Committee Chairman Strom Thurmond (R-S.C.) quickly requested that Martin and the two lawyers testify about the report when Meese’s confirmation hearings open today. And Thurmond arranged to obtain the document for the committee’s private inspection after three panel Democrats, led by Delaware Sen. Joseph R. Biden Jr., asked him to subpoena it.

Meese’s attorneys minimized the report’s importance, saying that Martin reversed his staff attorneys “in the ordinary course” of his duties. And odds still appeared to strongly favor Meese’s eventual confirmation by the Senate.

But his chief Democratic opponent on the Judiciary Committee called it a turning point in efforts to derail the nomination. “This report independently confirms that Mr. Meese violated ethical standards and is a crucial new development,” Sen. Howard M. Metzenbaum (D-Ohio) said.

In the report, disclosed Monday by the Wall Street Journal, the two attorneys concluded that two of Meese’s transactions violated federal standards-of-conduct regulations that bar employees from any action that “might result in, or create the appearance of, using public office for private gain; giving preferential treatment to any person and losing complete independence or impartiality . . . .”

The attorneys in their report, said to run at least 16 pages, cited as one of the transactions the arrangement of a $40,000 loan in 1981 for the then hard-pressed Meese by John R. McKean, a San Francisco accountant. With the support of Meese, counselor to the President, McKean later was named to the U.S. Postal Service Board of Governors, but Meese did not disclose his financial relationship with McKean.

The other transaction involved assistance given to Meese in selling his California home by Thomas Barrack, who was appointed to an Interior Department post.

Memorandum Submitted

Meese attorney Leonard Garment said that he had presented a detailed memorandum to Martin on these issues. Martin subsequently decided, Garment said, that “a factual analysis indicated Meese’s relationship with McKean did not impair his independent judgment with the presidential personnel board” that approved McKean’s appointment.

On the Barrack question, Garment said, Martin concluded that his staff “had misread” the report by Jacob A. Stein, the independent counsel who in September found no basis for criminal charges against Meese. The staff finding was based on the assertion that Meese knew at the time Barrack received the Interior Department appointment that Barrack had helped in the sale of his house.

The Stein report does not appear to be clear on how much Meese knew of the extent of Barrack’s involvement in the sale of his home.

As described by Garment, the turnaround of the staff report took place in two days--Jan. 17 and 18. Martin subsequently wrote to the Judiciary Committee that “we believe” Meese had complied with federal conflict-of-interest regulations.

Although Martin was said to have discussed the matter with Fielding at the White House, a White House official who requested anonymity said: “There were no directions of any kind from here to there (Martin’s office).”

The Wall Street Journal quoted Martin as insisting that the two staff attorneys are satisfied with the reversal, but he refused to identify them or to talk with reporters Monday.

About 23 witnesses are now scheduled to testify at Meese’s hearings. In addition to Martin and the two staff attorneys, they include former Watergate special prosecutor Archibald Cox, who, as chairman of the citizens’ lobby Common Cause, is a prime opponent of Meese’s confirmation, and representatives of several civil rights organizations who oppose Meese and of 10 law enforcement groups that back his appointment.