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Carlucci Strips 6 Aides of Duties : Probe Figures Taken Off Jobs in Procurement

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Times Staff Writer

In an extraordinary move, Defense Secretary Frank C. Carlucci Tuesday stripped six Pentagon officials who are under suspicion in the military procurement bribery and fraud investigation of all sensitive contracting duties.

Carlucci also sent a memo to all Pentagon officials stressing that it is illegal to divulge privileged contractor information--an act that appears to be at the heart of the case the Justice Department is building against a broad network of military officials, defense contractors and consultants.

Large Payoffs Indicated

Information in federal search warrants and from law enforcement sources indicates that current and former Pentagon officials accepted large payoffs from defense suppliers in exchange for secret bidding documents.

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In Alexandria, Va., a federal grand jury was impaneled Tuesday to study evidence gained from 38 search warrants issued last week and 270 subpoenas now being served. The grand jury will also review hundreds of hours of tape-recorded conversations and accounts of interviews with scores of government officials, defense consultants and major military suppliers.

Congressional Democrats, meanwhile, denied that any members of Congress are under investigation in the procurement inquiry, saying that the Justice Department is carrying out a “deliberate, orchestrated campaign of leaks” to deflect attention from a scandal centered in the Pentagon and the defense industry.

The leaks are designed to put Democrats on the defensive and neutralize the “sleaze issue” surrounding a number of Reagan Administration officials, Democrats charged.

Justice Department officials vehemently denied the accusations, but lawmakers challenged investigators to prove their case. “If there’s a member of Congress involved, say so, but don’t play this game of McCarthyism,” Rep. Tony Coelho (D-Merced) fumed.

Rep. Bill Chappell, a Florida Democrat who heads the defense appropriations subcommittee of the House Armed Services Committee, called a press conference to deny that he is under investigation. Federal law enforcement officials have said that he and Rep. Roy Dyson (D-Md.) are possible subjects of the continuing inquiry.

“I know of no person in the U.S. Congress that’s involved as a target in this investigation,” Chappell said.

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Lawmakers Held Implicated

Although law enforcement officials said that it is too early in the investigation to identify any “targets” on Capitol Hill, they added that they had developed information that implicated a number of congressmen.

Carlucci, who was purposely kept in the dark about the investigation until last week, said that he was reassigning officials under scrutiny to “duties that will not involve them in ongoing procurements or provide them access to information related to ongoing procurements.”

Carlucci and other top Defense Department officials considered suspending the employees but decided to await further information, saying: “This interim action in no way reflects any judgment about the guilt or innocence of any individual.”

He took the action to ensure that the Pentagon purchasing process is “free from question,” he said.

Meese Not Informed

The FBI and Justice Department officials did not inform Carlucci or Atty. Gen. Edwin Meese III of the investigation until very recently because it was not clear how high the allegations might go. Meese’s name came up on a wiretap, sources said, but the conversation was not incriminating.

The Pentagon employees who have been reassigned include five officials whose offices were searched and records seized last week:

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--Victor D. Cohen, deputy assistant secretary of the Air Force for tactical warfare systems.

--James E. Gaines, deputy assistant secretary of the Navy for acquisition management, international programs and congressional support.

--Stuart E. Berlin, head of the ship systems engineering branch of the Naval Air Systems Command.

--Jack A. Sherman, supervisory contract negotiator in the Marine Corps Contracts Division.

--George Stone, information management services division head for the Navy’s Space and Naval Warfare Systems Command.

A sixth, unidentified Pentagon employee also is under scrutiny and has been reassigned, defense officials said.

No Contracts Suspended

No actions were taken against any of the suspect defense contractors or consultants, Pentagon spokesman Dan Howard said, adding that such moves would be premature. He said that several huge military contracts that are being studied by federal prosecutors for evidence of possible fraud or bid-rigging have not been suspended.

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One search warrant issued last week indicates that investigators are looking at the possibility that a former top Navy official, Melvyn R. Paisley, may have steered a multibillion-dollar aircraft contract to McDonnell Douglas Corp., for whom Paisley now serves as a procurement consultant.

“To my knowledge, those contracts are not under review in connection with this investigation at this point,” Howard said.

Also on Tuesday, the Defense Department released a form that Paisley, whose consulting office was bugged and whose phone was tapped, was required to file when he left the Pentagon last year. The financial disclosure form, required by the Office of Government Ethics, must be filled out by high-level employees when they leave government.

McDonnell Consultant

Within a month of leaving the government on March 31, 1987, Paisley was employed as a consultant by McDonnell Douglas and United Technologies Corp., both of whose offices were searched last week as part of the fraud investigation.

Paisley said on the financial disclosure form that he planned to work for BDM Corp., a prominent Washington-area consulting firm specializing in military and technical analyses.

Included with the form was an April, 1983, letter in which Paisley had disqualified himself from dealing with any matters involving BDM. A separate financial disclosure report shows that Paisley’s wife, Vicki A. Paisley, worked for BDM for an undetermined period during Paisley’s tenure at the Pentagon from December, 1981, to March, 1987.

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The BDM personnel office described Mrs. Paisley as a “terminated employee.” Company officers refused to provide information about her employment history.

Times staff writers Sara Fritz, Melissa Healy and Ronald J. Ostrow contributed to this story.

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