Counsel Investigates Meese $9,600 Phone Investment

Atty. Gen. Edwin Meese III’s investments in the regional Bell telephone companies are under criminal investigation by the same independent counsel already looking into his ties to scandal-plagued Wedtech Corp., one of Meese’s attorneys says.

Meese and his wife, Ursula, held telephone stock worth $9,600 a year ago when Meese approved Justice Department recommendations to lift some restrictions on the businesses in which the regional “Baby Bell” companies could engage.

Meese has refused to remove himself from the Justice Department’s ongoing efforts to supervise its breakup of American Telephone & Telegraph Co.

Meese’s much-revised financial disclosure form is in a state of limbo within the Justice Department because of the potential conflict involving the regional Bell stocks. The form was reviewed last month by a career Justice Department attorney, who spotted a possible conflict and contacted the office of independent counsel James McKay.

But law enforcement officials speaking on condition of anonymity and one of Meese’s own attorneys, James Rocap, said that McKay’s staff had already been investigating the matter and had opened its own investigation earlier into a possible conflict of interest.

Terry Eastland, a Justice Department spokesman, said Meese’s financial disclosure form “has yet to be officially approved.” He said that approval won’t be forthcoming until McKay concludes his criminal investigation of Meese.

Meese has been under criminal investigation by McKay’s office since last May 11 for his involvement with Wedtech Corp., a now-bankrupt Bronx, N.Y., defense contractor.

Meese approved Justice Department recommendations last February, generally supporting seven regional phone companies’ requests that they be permitted to offer long-distance phone service in certain areas. Meese also said the regional Bell companies should be permitted to manufacture telephone equipment and provide electronic information services such as home banking.

The federal judge overseeing the breakup of AT&T;, however, refused to allow the so-called Baby Bells into manufacturing or long-distance service. He did allow them to transmit information services but said they could not provide the information itself.