Vows ‘Full Force of Law’ Will Be Felt : Pentagon Fraud Case Shocking, Bush Says

Vice President George Bush, facing the outbreak of another Administration scandal as his presidential campaign struggles to regain momentum, on Friday declared himself “offended and shocked” at the escalating defense contract fraud investigation and vowed that the “full force of the law” would be felt by anyone convicted in the case.

“I will not tolerate lawlessness--in the Pentagon, in the streets or in Congress,” said the vice president, who made a point of complimenting Administration officials “who have gone about ferreting out this corruption.”

Bush’s strongly worded remarks on the Pentagon matter contrasted sharply with the reticence he has shown concerning the investigation of embattled Atty. Gen. Edwin Meese III. The vice president was pressed Friday about his refusal thus far to take a position on Meese’s activities.

Avoids Mentioning Meese

Asked whether he was similarly “offended” by allegations of ethics violations surrounding Meese, Bush retorted: “I’m offended by any allegation that undermines the concept of the integrity of the public process or public service.” He would not directly comment on Meese.

The emerging Defense Department investigation comes at a politically inopportune time for Bush on a number of fronts. It threatens to throw the so-called “sleaze” issue back on the Republican side of the court, just as the GOP has been attempting to tar Democrats with allegations about the activities of House Speaker Jim Wright (D-Tex.).

The Pentagon investigation also involves several aides to former Navy Secretary John F. Lehman Jr., a Bush supporter who accompanied the vice president on trips to the South before the Super Tuesday primaries. Bush said Friday he had not spoken to Lehman since the scandal arose.

And it offers the Democrats, and specifically nominee-apparent Michael S. Dukakis, the opportunity to criticize the management of the Defense Department during Bush’s vice presidential tenure.

The Democrats’ political advantage stands to be blunted, however, in direct proportion to the extent of involvement by Democratic political figures in the unfolding scandal. But even as reports emerged Friday that investigators were looking into the activities of two Democratic members of the House, other Democrats countered Bush’s avowals with criticisms of the Administration and, tacitly, of Bush himself.

Blames Defense Budget

In New Orleans, where he was campaigning Friday, Dukakis said: “The basic problem . . . goes back to these massive increases in the defense budget at a time when neither the Administration nor the Pentagon were ready for them, and when money was flowing so freely and so lavishly that people simply couldn’t control it.

“I fear the worst,” Dukakis added, calling the allegations “not surprising” in light of increases in defense appropriations.

Paul G. Kirk Jr., the Democratic Party chairman, issued the following statement from his Washington office:

“After eight years of rhetoric from the Reagan-Bush Administration on the importance of a strong and well-managed defense program, the evidence of waste, fraud and abuse in the Defense Department is appalling. . . . The Republican procurement policy provides little security for the taxpayers of the nation.”

The Reagan Administration “sleaze” issue, and specifically the Meese case, has dogged Bush throughout his candidacy. Questions about Meese have grown particularly pointed since Bush has emphasized his intention to bring only those with the highest possible ethical standards into a Bush Administration. In response, Bush has gone only so far as to say that the allegations against Meese were troubling to him, although two high-ranking aides have said that Meese’s continuing service in the Reagan Administration hurts Bush’s campaign.

But on Friday, reading from a prepared text at a hastily called press conference, Bush was much harsher on the subject of the Defense Department investigation.

‘Not Just Stealing’

“Corruption anywhere in government is bad enough, but these people, should the allegations prove true, were not just stealing money from the Treasury, they were stealing from our national defense and undermining our national security,” he said.

The vice president denied that there was any contradiction between the two approaches, saying that he intended--by not commenting on the Meese case--to avoid prejudging the attorney general.

“I’m not prejudging any individual here,” he said of the defense contract case. “I’m simply saying the process should vigorously go forward.”

Bush said he was “not in the least” concerned that he would be tarnished because the investigation involves aides to former Navy Secretary Lehman, Bush’s ally. “I have no reason and I hope that nobody here is condemning John Lehman of anything,” Bush said.

Denies Offensive Thrust

Despite attempts by the Democrats to take political advantage of the situation, Bush said Friday he hopes the matter will not become a campaign issue--and he denied that his statements were meant as an offensive strike against a Democratic attack.

“When I see something that offends my conviction on the need for honesty and integrity in government, I feel inclined to speak out about it,” he said.

Bush insisted that his sole reason for speaking out Friday was his concern that opponents of the Reagan Administration defense build-up could use the scandal as a rationale for cutting military spending.