Special Counsel Named to Probe Nofziger Case

James C. McKay, a veteran Washington trial lawyer, was appointed Monday by a federal court panel to investigate former White House political director Lyn Nofziger, who faces conflict-of-interest allegations stemming from his lobbying activities after leaving the government in 1982.

The panel of three appellate judges asked McKay to determine if Nofziger broke the law by seeking to help a New York defense contractor obtain an Army contract in May, 1982, and by intervening seven months later to help a Los Angeles agricultural firm preserve an overseas rice contract.

Contacts Prohibited

Federal ethics statutes prohibit high-ranking government executives from approaching their former colleagues on behalf of a client within 12 months after leaving federal service.

McKay was directed to decide whether to press criminal charges against Nofziger or to clear him of the allegations.

The appointment of McKay, 69, a civil litigator and partner for 29 years in the large Washington firm of Covington & Burling, was made a month after the Justice Department officially asked for an “independent counsel” in the case.

The panel’s action brought to five the number of such counsels now conducting separate inquiries under a 1978 statute aimed at ensuring independent, nonpolitical examinations of government officials or ex-officials. That is the highest number since the law was enacted.

Exoneration Predicted

Paul Perito, Nofziger’s attorney, said: “We’re delighted that the court has moved quickly to choose a man of (McKay’s) stature. We look forward to cooperating with him, and we trust that, after a full, fair and thorough inquiry, it will be shown that Mr. Nofziger did not violate any provision of federal ethics laws or any other laws.”

McKay refused to comment except to say that he would “look at all the papers and decide how best to set up an investigation.”

Nofziger left his job as President Reagan’s special assistant for political affairs on Jan. 22, 1982, to start a public relations and consulting business.

In appointing McKay, the court said the Justice Department had evidence that, four months after leaving the White House staff, Nofziger wrote a letter to deputy White House counselor James E. Jenkins to ask his help in obtaining a $31-million Army engine contract for Bronx-based Wedtech Corp.

Wedtech received the contract. Nofziger and his business partner, Mark A. Bragg, each received 22,500 shares of Wedtech stock, which they later sold for about $350,000 apiece, investigative sources said.

Rice Sales to Korea

Also, the court cited evidence that, in late 1982, Nofziger asked William P. Clark, then the President’s national security adviser, for help in preserving a South Korean rice contract for Comet Rice, a subsidiary of Early California Industries of Los Angeles.

Nofziger subsequently sent two follow-up memoranda to Clark, the court statement said. Clark has confirmed receiving the request but has said that he took no action. Comet Rice retained the contract, which was being reviewed by the U.S. Agriculture Department.

In addition to possibly violating the one-year ban covering high government officials, the court said, Nofziger may also have violated a prohibition against top presidential campaign officials’ lobbying the White House during that President’s term of office. Nofziger held leading positions in Reagan’s 1980 and 1984 election campaigns--first as press secretary and later as a consultant.

Penalty Includes Jail

The Ethics in Government Act provides for a maximum penalty of two years in prison and a fine of $10,000.

Other independent counsels are investigating allegations of conflict of interest against Michael K. Deaver, former deputy White House chief of staff; charges of misleading congressional testimony against former Assistant Atty. Gen. Theodore B. Olson; the personal financial affairs of W. Lawrence Wallace, another former Justice Department official, and the Iranian arms sale dealings of a number of current and former government officials.