Defend Law or Resign, Meese Told

The chairman of a Senate Judiciary subcommittee said today that Atty. Gen. Edwin Meese III must vigorously fight a court challenge to the special prosecutor law or resign.

Sen. Paul Simon (D-Ill.) said the Administration’s inaction after a lawsuit was filed Wednesday by former White House aide Michael K. Deaver challenging the special prosecutor law “leaves the impression” of a conflict of interest by Meese, whose actions concerning the Iran- contra affair may be under investigation by a special prosecutor.

“The attorney general’s inaction on this issue can only give rise to concerns about conflict of interest,” said Simon, chairman of a Senate Judiciary subcommittee which oversees the law.

“Silence may not mean collusion with those under investigation, but it can leave that impression.”

‘Appalling Situation’

Simon said that this “is an appalling situation” and that the Administration should be doing what it can to settle it and prevent obstruction of the investigations.

“The Department of Justice should move vigorously to uphold the law, and that must begin with a clear statement and immediate action by the attorney general.

“He must either fight to defend the law, or he must resign,” Simon said.

On Wednesday, a federal judge temporarily blocked the perjury indictment of Deaver, citing “substantial questions” about the constitutionality of the law governing the special prosecutor’s inquiry into Deaver’s lobbying activities.

Problems for Walsh

Jackson’s ruling not only threatened the Deaver inquiry, but also could pose problems for Lawrence B. Walsh, the special prosecutor looking into the Iran-contra affair.

The Justice Department has taken no action so far in the court challenge, and has not said what position it intends to take although a department official signaled recently that the Administration might support a challenge to the law.

On Tuesday, Lt. Col. Oliver L. North, the fired National Security Council aide who is a key figure in the Iran-contra investigation, filed a similar suit challenging the ethics law, which is due to expire Jan. 3, 1988. At the time, Walsh said he intended to fight that challenge.