Deaver Did Not Violate Rules in Car Deal, Officials Say : Reagan Aide, Eight Others Used Diplomatic Passports to Buy Luxury Autos in Europe

Times Staff Writer

Deputy White House Chief of Staff Michael K. Deaver used his diplomatic passport to purchase a luxury BMW automobile at a discount when doing advance work on President Reagan's trip to Germany recently, but he violated no government regulations in doing so, White House officials said Tuesday.

As many as eight others in the 35-member U.S. group, whose job was to plan Reagan's visit to Europe in May, made similar automobile purchases, officials said, describing such transactions by military officers and persons holding diplomatic passports as "traditional" and "a common practice."

Although government regulations prohibit U.S. officials from receiving gifts from a foreign government, there is no ban on their accepting discounts or sales promotion devices from a private company abroad if that firm has no business with the State Department, aides said.

Refuses to Comment

Presidential spokesman Larry Speakes, briefing reporters on the Deaver case, refused to comment on whether such a practice appeared to be proper.

"I would let you and the public make that judgment," Speakes said.

When asked if Reagan had anything to say about it, Speakes replied: "Not anything I want to convey."

An Administration official knowledgeable on ethics rules, who spoke on condition that he not be named, remarked: "It comes down to this: Was it a smart thing to do, or was it dumb?"

This official noted that Deaver, who plans to leave government service in May, already has been under scrutiny by the U.S. Office of Government Ethics for failing to report his status as a general partner in a California real-estate partnership on his annual government disclosure forms.

Urged Amended Forms

David H. Martin, the ethics office director, said recently that he had recommended that Deaver amend his disclosure forms from 1982 to 1984. But Martin said that he had found no intention on Deaver's part to evade the rules, because Deaver had listed his investment in the venture although not his status as partner. Martin was not available for comment Tuesday.

Speakes said that presidential counsel Fred F. Fielding was looking into the automobile purchases, which were disclosed Monday in Newsweek magazine. Newsweek said that the discounts amounted to about 25% on the luxury cars, which can cost an average buyer from $18,000 to $42,000, but Speakes said the discounts were closer to 15%.

He said he did not have the names of other officials who bought cars.

Firm Dropping Practice

One senior White House aide, who asked that his name not be used, said BMW corporate headquarters in Germany had announced earlier that it was discontinuing the practice of giving discounts to persons with diplomatic passports because U.S. dealers had complained that it was undercutting their business. But the firm apparently made one last exception for Deaver and his associates, the aide said.

However, Speakes said of the transaction: "I don't think it had to be solicited (from BMW)." He said diplomatic passports are held only by "ranking White House officials" and that lower and middle-level aides have regular passports.

Speakes said that "a number of companies" offer discounts "probably within the diplomatic community (and) not confined specifically to the United States."

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