Peres Confirms Writing Pipeline Letter to Meese

Israeli Foreign Minister Shimon Peres, confirming that he sent a handwritten letter to Atty. Gen. Edwin Meese III about a controversial Iraqi pipeline project in 1985, said Sunday that he used this highly unusual diplomatic channel “because I was approached by people who told me that the attorney general will deal with it.”

The remarks by Peres, who was prime minister at the time of the correspondence, marked the first time that the Israeli official has publicly acknowledged writing the now-classified letter, which sources say could seriously undermine his political standing if it is disclosed along with other documents related to the proposed pipeline.

Questions Raised

The correspondence has raised questions about why Meese, as the nation’s ranking domestic law enforcement officer, was dealing directly with a foreign head of government on an international matter of importance to U.S. foreign policy and national security.

Peres said that Meese, in response to his letter, told him to deal with then-National Security Adviser Robert C. McFarlane on the pipeline plan. He said Meese told him that Secretary of State George P. Shultz could not be involved because the pipeline was to be built by Bechtel Corp., a company that employed Shultz before he joined the Reagan Administration.

But Peres, in an interview with ABC’s “This Week With David Brinkley,” did not disclose who referred him to Meese in the first place in the pipeline dealings, which have become a primary focus of an independent counsel’s investigation of the attorney general. He made his comments in response to questions about a story on the letter in Sunday’s editions of The Times.

Peres denied he knew of any proposals to pay him or the Israeli Labor Party for a guarantee that Israel would not interfere with the $1-billion pipeline, which was to have been built in Iraq, Israel’s enemy of four decades.

“You know, it’s a shame even to relate myself to such an accusation,” he said. “If somebody would come to me and suggest it for the party or for somebody else, he would be thrown out the window. We never do it, we never did it, nobody ever approached me.”

However, he added: “I don’t know what somebody was scheming behind my back.”

Proposals by Wallach

Proposals for such payments were cited in a memo to Meese from his longtime friend E. Robert Wallach, a private attorney involved in the project. But it appears that no payments were actually made, and it is not known who else had knowledge of the plan.

Peres said he supported the pipeline for economic and national security reasons. “I was told about the idea of laying a pipeline from Iraq through Jordan up to Elat which will add, in my judgment, more security to the whole region and that Israel could have enjoyed oil for a lesser price,” he said.

“I wrote to Meese and I said that, if this is the case, I would like to meet Secretary Shultz, a man for whom I have the highest regard, in order to discuss it and talk it over. That was the content of my letter,” said Peres, who previously had denied through spokesmen that he wrote to the attorney general on the matter.

The foreign minister did not say, however, why he wrote to Meese first, rather than corresponding directly with Shultz. In fact, the State Department--the usual channel for foreign policy matters--had little or no input in the U.S. government end of the operation, which was handled almost entirely by the National Security Council.

‘I Replied Officially’

“I was approached by people who told me that the attorney general will deal with it,” Peres said. “And then the attorney general replied and told me that, since it was a company that Mr. Shultz used to work for, that Mr. McFarlane will approach me--and he did approach me in another letter--and I replied officially after I consulted my fellows in government.”

Although the contents of the letter and other important documents in the pipeline investigation remain classified, sources have said State Department officials fear that their disclosure could inflict serious political damage on Peres, who is believed to be the Administration’s major hope for a breakthrough in the Middle East peace efforts.

The September, 1985, letter is damaging when viewed with the other papers, sources said, though it makes no mention of any plan for payments from pipeline proceeds to Israeli officials. That proposal was cited in another document written that year, a memo from Wallach to Meese that is at the center of the investigation by independent counsel James C. McKay.

The Peres letter is significant, sources said, because it confirms that he had knowledge of at least some activities related to the pipeline deal cited in the Wallach-Meese memo, which was a status report on the project.

No ‘Bribes’ Involved

On Sunday, however, Peres said it is “foolish” to suggest that any “bribes or money” were involved in Israel’s role in the pipeline plan.

The Foreign Corrupt Practices Act prohibits U.S. citizens from bribing foreign officials and specifically requires the attorney general to take legal action to prevent a violation if one appears imminent. Meese did nothing about his knowledge of the Israeli payment plan, but it is not known whether he did anything that could be construed as illegal.

Meese’s close association with Wallach is one of the main reasons the attorney general is being investigated. Sources said that Swiss oilman Bruce Rappaport, a major figure in the pipeline affair, paid Wallach at least $150,000 for his work on the project and for his Washington contacts, primarily his ties to Meese.

When seeking help with a $400,000 insurance fund Iraq was demanding at one point to safeguard the pipeline, Rappaport said in an interview with The Times, “I talked to my friends in Europe, asked them, ‘Who do you think could help us?’ and Wallach’s name came up . . . because he lives in California, he knows the people at Bechtel, because he has connections in Washington. He seemed to be the man for the job.”

Wallach and W. Franklyn Chinn, Meese’s former investment manager, were indicted last December in New York on federal fraud, racketeering and conspiracy charges that involved fees for their alleged efforts to influence Meese on matters that would benefit Wedtech Corp., a small defense contractor that is now bankrupt.

Staff writer Michael Wines contributed to this story.