Meese May Have Known About Mideast Bribe Plan

The independent prosecutor investigating Atty. Gen. Edwin Meese III has evidence that Meese may have known of a plan to bribe a high-ranking Israeli to block interference in a $1-billion Iraqi pipeline project, sources close to the probe said Friday.

The revelation that Meese apparently did nothing about his knowledge of the alleged payoff proposal, cited in a 1985 memo to him from his longtime friend, San Francisco attorney E. Robert Wallach, is the most serious to surface so far and could result in criminal indictment, the sources said.

The Foreign Corrupt Practices Act prohibits U.S. citizens from bribing foreign officials.

The sources, who asked not to be identified, confirmed a report in The Los Angeles Times and said the prosecutor in the case, James McKay, was close to acting on the information, including placing further pressure on Wallach in a bid for his testimony against the attorney general.

Wallach, a longtime Meese friend, so far has refused to cooperate with the investigators or to testify before the federal grand jury now probing Meese. The attorney general, however, has made half a dozen appearances before the federal panel, which was originally probing his ties to scandal-torn Wedtech Co.

It was not clear whether the attorney general or Wallach, under indictment for his role in the scandal involving the bankrupt Bronx contractor, violated laws in connection with the plan. Nor was it known if payment to an Israeli official was attempted.

McKay, who is currently in trial against another former Reagan aide, Lyn Nofziger, for illegal lobbying, has been investigating the Meese connection to the Iraqi pipeline project since last year. The billion-dollar project, which was never built, was to run close to the Israeli border, carrying oil to the Red Sea port of Aqaba, Jordan.

In a statement, Meese attorney Nathan Lewin said that since the project “was principally a subject involving foreign relations,” the attorney general “had very limited involvement in discussions concerning it.”

“He acted correctly and with full and proper execution of his duties in this regard,” Lewin said. “No actual or potential violation of law was brought to Mr. Meese’s attention during his limited participation in discussions regarding the project.”

Reagan Still Confident

White House spokesman Marlin Fitzwater said:”The President has full confidence in Ed Meese.”

George Walker, the attorney preparing Wallach’s defense in fraud conspiracy for which he has been indicted in New York, told The Times that he had “absolutely no comment” on the memo, and said he began representing Wallach two weeks ago.

It was not immediately known whether Wallach had financial interest in the pipeline. He apparently has told U.S. officials that the project would promote peace in the Middle East.

Executives of the Bechtel Group, the huge San Francisco construction firm that bid to build the pipeline, last fall said Wallach represented Bruce Rappaport, a wealthy Swiss oilman, in negotiations as a partner with Bechtel in the project, the newspaper said.

Not Directly Involved

Although there apparently is no evidence that Meese was directly involved in the scheme outlined in the memo, several sources in the Justice Department and other government agencies told The Times that the allegation that he took no action on it, if true, could force his resignation.

Because Iraq and Israel are longtime enemies, Wallach and others allegedly sought the payoff to defuse Israeli opposition to the project, such as a direct military attack on it.

Some of the sources told The Times that Israeli foreign minister Shimon Peres, who was then prime minister, was the official targeted for the bribe attempt.