Justice Dept. Examines Meese Role in Inquiry

The Justice Department’s internal inspector is investigating Atty. Gen. Edwin Meese III’s handling of the initial probe of the secret Iran arms deals that turned up the diversion of millions to Nicaragua, officials said today.

Justice Department officials said Michael Shaheen, counsel to the department’s Office of Professional Responsibility, has opened an inquiry into Meese’s 48-hour fact-finding review that led to the startling revelation Nov. 25 that up to $30 million in proceeds from the arms sales was funneled to the contra rebels.

The officials said the incoming chairman of the Senate Judiciary Committee, Sen. Joseph R. Biden Jr. (D-Del.), last week asked Shaheen to investigate any possible “improper or unethical activities” related to the inquiry.

Halt Acknowledged

Concern about the Justice Department’s knowledge of the clandestine dealings was heightened last Friday when it acknowledged that for national security reasons it temporarily halted inquiries into private schemes to aid the rebels about the same time negotiations for the release of U.S. hostages in Lebanon were under way.

The department’s disclosure indicated that senior prosecutors--including Associate Atty. Gen. Stephen Trott, who asked the FBI for the 10-day delay--may have had advance knowledge of the link between Iran arms sales to help free the hostages and the events in Nicaragua.

Meese has said his role in the affair was entirely proper. But he has been criticized for not bringing the department’s criminal division and the FBI into the inquiry early enough and for not removing himself from the investigation since he provided the initial legal advice that allowed the arms sales.

Late Start for Inquiry

Meese said he discovered the first hints of wrongdoing on Saturday, Nov. 22, but it was not until the following Tuesday that he launched a full-scale inquiry and brought in the FBI, as well as Trott, the No. 3 official in the department.

Officials said Shaheen also will review Meese’s role in ruling out a special prosecutor’s investigation of U.S. ambassador to Switzerland, Faith Ryan Whittlesey, a longtime backer of the contras.

Ten days ago, Meese said the department had found insufficient evidence to prosecute Whittlesey on charges she misused government money and accepted a bribe.

Shaheen also will review Meese’s decision to remain in that case, in light of the fact that he and several Justice Department officials attended a $385 party at the Swiss Embassy, which was mis-charged to government accounts, officials said.

Investigators now are probing whether Whittlesey knew of the arms scheme because of several phone calls that fired National Security Council staffer Lt. Col. Oliver L. North made in September to the ambassador in Switzerland, where he allegedly diverted Iran arms proceeds through secret bank accounts.