Meese Seen as a Liability, Possible ’88 Political Issue

Atty. Gen. Edwin Meese III, the focal point of at least three criminal investigations and a controversial figure in the Iran-Contra scandal, has become a severe embarrassment to the White House and the Justice Department, a wide range of Administration officials say.

They add that the attorney general is also a budding political issue in the 1988 presidential campaign.

Not since the Watergate scandal during the Richard M. Nixon Administration 15 years ago has there been such dismay and uneasiness among career Justice Department officials about an attorney general--a situation that officials say is increasingly damaging to department morale.

In the view of some former Reagan officials, Meese is so beset by troubles and has become so controversial that he may soon be forced to consider stepping aside.

“You can’t argue that it’s not embarrassing and damaging,” Mitchell Daniels Jr., who served as the President’s chief political adviser until April, 1987, said, adding: “The time is getting closer” when Meese may have to leave the Administration.

“The counterweight,” said Daniels, president of the Indianapolis-based Hudson Institute, has been that Meese is the last top official with links to the President’s basic conservative constituency. “I’ve been one to argue that point,” Daniels said, “but there’s such a diversity of troubles now that he may have to go for the good of the President.”

Most officials in the Justice Department and the White House refused to discuss Meese’s problems on the record, saying that they could not remain in their jobs if they criticized the attorney general publicly. But the conclusion that Meese has become a liability and an embarrassment to the Administration and his department reflects a strong consensus among more than two dozen high-level Administration officials and career Justice Department attorneys interviewed for this story, as well as among a number of other experienced political figures of both parties.

Declaring, for example, that Meese’s actions have not been consistent with “the perception and image of integrity,” a veteran career attorney in the Justice Department, highly regarded as a non-political professional, said:

“This reflects adversely on the department. The office of attorney general is taking a beating, and that’s hard for career lawyers to swallow. I don’t mean to be moralizing or to sound sanctimonious, but that’s an office that should be treated with more respect.”

Declared another Justice official, “It’s gotten to the point where I think some of the people are embarrassed saying at a cocktail party that they work for the Justice Department. You see the person you’re talking to jump back in alarm.”

‘Business as Usual’

Nevertheless, White House officials say that--despite the problems piling up--President Reagan shows no sign of asking Meese to resign or step aside temporarily during the course of the investigations. And the attorney general himself, although he spends an increasing amount of time dealing with his legal difficulties, expresses confidence in his eventual vindication and pursues a ‘business as usual’ schedule at the Justice Department.

In fact, officials say the President has not even talked with Meese about the latest allegations, which involve the attorney general’s alleged failure to take action on a memo he received discussing a payment--possibly illegal under U.S. law--to former Israeli Prime Minister Shimon Peres’ ruling Labor Party to obtain Israel’s support for an Iraqi pipeline project. And Meese has not asked to see the President to discuss the matter.

Veteran Justice Department officials say that Meese relies most heavily for advice on political appointees who present him with an unreal picture of the world outside the Justice Department, reinforcing his views that the press and political opponents are intent on running him out of office to embarrass the President.

‘Trying to Get Him’

A senior Reagan aide, shaking his head and expressing exasperation over the potential political fallout, said that Meese “is stubborn and won’t be driven out” and “thinks people are lying out there in the weeds who don’t like the President or his policies and can’t get the President, so they’re trying to get him.”

“He really believes that,” the official said.

The prime example the officials cite of those giving Meese unrealistic advice is William Bradford Reynolds, the assistant attorney general for civil rights.

When discussing the Meese investigations in a recent interview, Reynolds said: “There have been a lot of wild and unsubstantiated allegations that surface and get translated into fact, then a full-blown investigation is run and nobody finds anything wrong. If Ed Meese had anything at all that would suggest any indiscretion, it would have been found out by now.”

Meese, in a prepared statement denying any wrongdoing, insisted that he had only limited involvement in the pipeline project and could not recall having read a 10-word section of a classified memo that apparently refers to the payment to Israel. The memo is considered crucial to an investigation by independent counsel James C. McKay, although it is not known whether it refers to a payment already made or one being considered.

Memo From Friend

The memo was written to Meese by his longtime friend E. Robert Wallach, who represented the financial backers of the project. The attorney general has acknowledged taking action to help obtain Administration support for the pipeline’s construction.

The main issue in the pipeline case is whether Meese, after receiving the Wallach memo, failed to refer the matter to proper investigating authorities. The payment referred to could conceivably violate the Foreign Corrupt Practices Act prohibiting U.S. citizens from bribing foreign officials, even though the payment might not have been made by an American.

In the past, Meese repeatedly has said that he could not remember details of his activities when asked questions about the pipeline project and other investigations. Last Tuesday, testifying at the federal trial of Lyn Nofziger, Reagan’s former chief political adviser, Meese said 29 times that he had difficulty recalling key events in the illegal lobbying case.

The pipeline investigation, as well as at least two other criminal investigations focusing on Meese, are being conducted by McKay. All of the inquiries, especially the one involving the pipeline, could drag on for months.

Regardless of the outcome, Administration sources say that they will cause increasing political problems for the White House and the Republican Party in the presidential campaign.

Resignation Urged

In campaign speeches, at least two Democratic presidential candidates--Massachusetts Gov. Michael S. Dukakis and Rep. Richard A. Gephardt of Missouri--have called for Meese’s resignation.

A Republican presidential candidate, former Secretary of State Alexander M. Haig Jr., declared:

“If I had an attorney general who now has been involved in his fifth major national scandal, I would send him back to California. . . . You can’t have fleas around the President.”

In discussing the impact of Meese’s problems, a Justice Department official who refused to be identified said: “The question is how much faster we could move ahead if we didn’t have ankle weights on us.” He suggested that, were it not for the investigations, Meese might have been more visible and more effective in the Administration’s fight for Senate confirmation of Supreme Court nominee Robert H. Bork, which ended in defeat.

“The White House wanted him out of that,” the official said.

Another ranking official who requested anonymity said that department attorneys are trying to avoid referring matters to Meese for decisions because the issues “go up and languish” in his office.

“It’s always been tough to get him to make decisions,” the official said, “but it’s gotten much worse. Also, there’s the point that, if it’s his decision, it may be overturned if he’s indicted.”

The attorney general has also been forced to recuse himself from involvement in an increasing number of Justice Department matters because of the investigations involving him, but a spokesman refused to identify them or to say how many are involved.

Former Atty. Gen. Griffin B. Bell said that he cannot understand how Meese can do his job as attorney general while dealing with “all the problems” of the investigations and continuing to serve as chairman of the White House Domestic Policy Council.

Supportive of Meese

Bell, an Atlanta attorney who served in the Jimmy Carter Administration and who has been generally supportive of Meese and of Reagan’s policies, said that Meese “never has been able to give full time to the job because he’s been chairman of the Domestic Council.”

“It took all of my time to run the department. I had to work full time at it,” said Bell. “But I don’t want to say anything that looks like I’m trying to get him out of office. He’s got the same rights as the rest of us.”

A telephone deregulation bill sponsored by the Commerce Department has been awaiting action by the Domestic Council since the first of the year. A White House source suggested that Meese has hesitated to act on the case because McKay is investigating the attorney general’s actions relating to the telephone industry to determine whether he violated federal conflict-of-interest laws.

Owned Phone Stock

Meese and his wife, Ursula, owned 91 shares of stock in seven regional phone companies when he became attorney general, and they retained legal title to the shares until selling them for about $14,000 last August. Although their investment was relatively small, a conflict question arose because Meese in 1986 endorsed legislation that would have ended federal court authority to regulate the seven “Baby Bell” companies created by the court-ordered breakup of the American Telephone & Telegraph Co.

In addition to being the focal point of the pipeline and telephone industry investigations, Meese is the subject of an investigation by McKay involving the investment of the attorney general’s personal funds.

Soon after becoming attorney general, Meese turned $55,000 of his savings over to an independent investment adviser, W. Franklyn Chinn, who had been recommended to him by his friend Wallach.

In financial disclosure reports that Meese was required to file late last year, he reported that Chinn on several occasions in 1985 and 1986 had invested more funds on behalf of Meese and his wife than they had in their account, leading to a total profit of about $40,000 over two years on their original investment of $55,000.

Meese and his lawyers have insisted that they have no idea where the extra funds came from. It is a violation of federal securities law to buy stocks if more than half the funds are borrowed from a broker or investment adviser.

Both Wallach and Chinn were indicted in December by a federal grand jury on charges of racketeering in connection with the way Wedtech, a small Bronx contractor, obtained defense contracts.