Senate Panel Finds Meese Violated Intervention Ban

Atty. Gen. Edwin Meese III’s efforts to help scandal-plagued Wedtech Corp. violated a White House ban against intervening in government contracting on behalf of friends, a soon-to-be published Senate subcommittee report has concluded.

The report, which is likely to intensify pressure on Meese to resign, found that while Meese was President Reagan’s counselor in 1981 and 1982, he and his chief deputy violated the policy despite warnings by two other White House officials not to intervene.

“Where White House intervention in a procurement is prompted by a personal relationship between a White House staff member and a friend or relative, there is a strong appearance of improper favoritism which can only undermine the public’s faith in the integrity of the procurement process,” the subcommittee said in a key section of the lengthy report obtained by The Times on Tuesday.

Fred F. Fielding, Reagan’s former counsel, told the subcommittee staff that he advised Meese’s office on two occasions not to intervene in the Wedtech matter. Fielding said he stated that “this is a government procurement situation. The White House should not be involved. There shouldn’t even be the appearance of White House involvement.”

The Wedtech report will be issued within a week by the full Senate Governmental Affairs subcommittee on oversight of government management, with Republican members being given the opportunity to raise objections.

None had done so by Tuesday.

And the report includes some sharp criticism by Republicans of Meese’s dealings with E. Robert Wallach, a longtime Meese friend who, as a consultant to Wedtech, repeatedly urged Meese to help the Bronx defense contractor land a $32.2-million engine contract that was let by the Army without competitive bidding.

“It is a rather shocking example of what takes place when people are hired not simply based upon their expertise but their access and their influence and how they can manipulate the system to their own economic advantage,” said Sen. William S. Cohen (R-Me.).

Wallach and Meese’s former financial adviser, W. Franklyn Chinn, face trial in New York on federal racketeering and conspiracy charges that include accepting funds to influence Meese in the Wedtech matter.

Parallel Investigation

An independent counsel in Washington who has been conducting a parallel criminal investigation of the Wedtech matter, while not expected to seek Meese’s indictment, is planning to issue a report later this month that reportedly will be highly critical of Meese’s role.

Meese was in Rome attending a meeting of the International Assn. of Chiefs of Police. His lawyer, Nathan Lewin, disputed the subcommittee’s findings, contending that Meese’s actions “did not give the appearance of impropriety” and did not fall “within the scope of the White House regulation.”

The Senate subcommittee report noted that White House procurement policy, in effect since October, 1981, “prohibits White House staff members from intervening in specific procurements or contacting procurement officials on behalf of friends, relatives or associates who have a financial interest in the matter.”

The policy also strictly limits White House involvement “even where there is no financial or personal relationship,” the report said. When there is a “legitimate White House interest in a procurement matter, the policy acknowledges a right only to receive information.”

The subcommittee cited testimony from White House officials that their involvement in trying to obtain the engine contract for Wedtech “was based on a desire to fulfill the President’s campaign promise to bring jobs and industry to the South Bronx, a legitimate objective for the President’s staff.”

“On the other hand,” the report said, “the intervention of Mr. Meese . . . appears to go beyond this purpose and to have been due in no small part to the influence of Welbilt consultants and personal friends E. Robert Wallach and Lyn Nofziger.” Wedtech was then known as Welbilt Electronic Die Corp.

Nofziger Ties to Meese

Nofziger, Reagan’s former political director, was convicted in February of illegal lobbying for Wedtech and two other clients within one year of his leaving the White House in early 1982. The lobbying included attempting to influence Meese on Wedtech’s behalf in April, 1982.

Meese has said he asked his White House staff in the summer of 1981 to ensure that Wedtech receive a “fair hearing” from the Pentagon on its engine contract proposal, which the Army felt was highly overpriced. He has said he issued the instructions after receiving several memoranda from Wallach and discussing the matter with him.

“Mr. Meese further testified that at the time he received Mr. Wallach’s memoranda, he was aware that Mr. Wallach was a Welbilt consultant, but did not know whether he was paid or unpaid,” the report said.

Receives Payments

Wallach apparently was unpaid when he first contacted Meese about the contract, the subcommittee said, “but began receiving payments that ultimately totalled more than $1 million soon after the award of the engine contract.”

The report said that while Wedtech’s Army contract proposal was pending, Wallach not only lobbied Meese personally but on at least two occasions “suggested intervention by Secretary of Defense Caspar Weinberger or Secretary of the Army John Marsh.” The Senate committee found no evidence, however, that Meese ever responded to Wallach’s suggestion by contacting either official.

In an April 8, 1982, letter to Meese, Nofziger wrote: “Ed, I really think it would be a blunder not to award that contract to Welbilt.” At Nofziger’s trial, according to the subcommittee, Meese testified that he knew Nofziger was working in the private sector as a consultant.

Cites Further Intervention

The report also said Meese’s chief deputy, James E. Jenkins, violated White House procurement policy. It cited two letters written by Jenkins in 1982 stating that he intervened in the procurement matter at Meese’s request and a later note from Jenkins to Meese in which he stated that “your personal go-ahead to me saved this project.”

Jenkins told the subcommittee staff that he disregarded advice by Craig Fuller, then White House Cabinet secretary, not to go ahead with a plan to call a May, 1982, meeting with Pentagon officials on the Wedtech contract. “He wasn’t my boss,” Jenkins said of Fuller.

Jenkins, who became Wedtech’s Washington marketing director after leaving the White House, declined comment Tuesday on the subcommittee’s conclusions.

FO(Southland Edition) Atty. Gen. Edwin Meese III at world police meeting in Rome.