Deaver Indicted; Lies Alleged in Lobbying Probe

Times Staff Writer

Former presidential aide Michael K. Deaver was indicted Wednesday on five counts alleging that he lied to Congress and a federal grand jury about his lobbying activities after leaving the White House.

The indictment was the first to be brought by a court-appointed independent counsel since Congress established the office nine years ago.

Indictment Expected

The long-expected action against Deaver, who has been one of President Reagan's closest confidants, contained charges of perjury and "false declarations" rather than conflict of interest charges, the original subject of the investigation.

Several legal authorities said that prosecutors apparently believe that Deaver, 48, may have violated the spirit but not the letter of federal ethics laws, making conflict charges difficult to prove.

Deaver's lawyers told reporters that they will seek to have the indictment dismissed on grounds it is unconstitutional, the same grounds that the courts refused to consider before it was returned. Several hours before the grand jury action, Supreme Court Chief Justice William H. Rehnquist denied a last-ditch request by Deaver's lawyers to block the indictments.

Deaver said in a statement that the allegations against him are "groundless." He said he would be cleared of any wrongdoing at trial, "if the case gets that far."

President Reagan, in a statement issued by the White House, said of his former deputy chief of staff: "Mike Deaver has been our friend for 20 years. Nancy and I will keep him and his family in our thoughts during these difficult times. We wish him well."

Deaver was charged with two counts of perjury stemming from his testimony before a congressional committee that last May investigated his lobbying activities, and with three counts of making "false declarations," which is similar to perjury, in his appearance before a federal grand jury last June.

Persuaded by Attorneys

Legal authorities not connected to the case said that Deaver's attorneys apparently had persuaded independent counsel Whitney North Seymour Jr. that some of the government officials Deaver had contacted in connection with his public relations business technically were outside the circle of those whom the law forbade him to lobby--that is, they were in agencies like the Office of Management and Budget and the National Security Council, two White House agencies that legally are separate from the executive office of the President where Deaver had worked.

Under the Ethics in Government Act, former high officials like Deaver are prohibited from lobbying other officials at their former agencies for a period of 12 months after leaving government service and are similarly prohibited for longer periods where the ex-officials had direct supervision over the matter at issue.

"It's rare for a case like this not to include substantive charges," said one Washington lawyer, who spoke on condition he would not be identified. "But I think that Seymour, when he thought about the arguments of Deaver's lawyers that their client technically may not have violated the law, decided to take another tack and build his case on perjury."

Deaver attorney Randall J. Turk said that he hopes to have the indictment thrown out on grounds that Seymour, who obtained it, was appointed last year under a legally flawed act of Congress. In the past three weeks, judges at all levels have declined to rule on the merits of this claim because Deaver had not been charged with any crime.

Deaver's attorneys contend that the Constitution vests the power of prosecution solely in the executive branch and does not provide for appointments by judicial panels, as the Ethics in Government Act prescribes.

If convicted on all five counts, Deaver could face a maximum punishment of 25 years in prison and $34,000 in fines.

The indictment alleges that Deaver lied to congressional investigators and then to grand jurors in an effort to conceal the identities of government officials he had contacted on behalf of domestic and foreign clients who paid him $4.5 million in fees during his first year out of government. He left the White House in May, 1985.

Grand jurors charged that Deaver, in representing the government of South Korea for $475,000 annually, lied under oath to Congress in denying that he "personally requested Vice Adm. John M. Poindexter at the National Security Council to assist in arranging" a meeting with the President for a top aide of the Korean president in October, 1985. Poindexter, fired from his White House post last November for his involvement in the Iranian arms scandal, was not accused of any wrongdoing in the indictment.

The indictment also said that Deaver lied to Congress in denying contacts with other NSC officials in 1985, including Robert C. McFarlane, Gaston Sigur and William Martin, on behalf of such business clients as Philip Morris Inc., the cigarette manufacturer, and the brokerage house of Smith Barney, Harris Upham & Co.

Jury Alleges Lies

In addition, the indictment alleged that Deaver lied to the grand jury in denying that he had played an early role at the White House in developing a U.S. strategy to reduce acid rain pollution, including the selection of presidential envoy Drew Lewis to consult with Canadian officials on this problem.

Deaver later represented the government of Canada under a $100,000 contract and spoke with Lewis in an effort to help that nation minimize the threat of rain-borne pollution from U.S. industries.

The other counts charged him with making "false declarations" when he told grand jurors that he never had lobbied officials at the Treasury Department and the Transportation Department, including Transportation Secretary Elizabeth Hanford Dole.

Deaver told reporters that any mistakes in his testimony were "inadvertent" and that Seymour, to identify any potential conflicts, had the benefit of more than 100 witnesses and 50,000 pages of documents that the grand jury eventually subpoenaed.

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