No Evidence Is Found Against Lehman, Navy Prober Reportedly Tells Lawmakers

The criminal inquiry into Pentagon corruption is centered predominantly on present and former Navy officials and so far has turned up no evidence against former Navy Secretary John F. Lehman Jr., a naval investigator reportedly told members of Congress on Thursday.

Sources who attended a closed-door briefing for the House Armed Services Committee said Rear Adm. J. E. Gordon, head of the Naval Investigative Service, and several other Defense Department officials told them the investigation centers “95%” on the relationships among the Navy, consultants and contractors.

But this assessment of the Pentagon scandal appears to be at odds with the portrait painted a week ago for another congressional group by Henry E. Hudson, the U.S. attorney from Virginia who is in charge of the criminal investigation.

After the briefing from Gordon on Thursday, Rep. George J. Hochbrueckner (D-N.Y.) said: “This strictly seems to be a Navy thing. The Army and the Air Force don’t seem to be involved much here.”

‘A Substantial Scandal’

By contrast, after listening to Hudson last week, Rep. John D. Dingell (D-Mich.) declared: “I think we have a substantial scandal on our hands.” He reported that Hudson disclosed he was looking at 75 to 100 contracts let by the Defense Department.

Among those served with search warrants, the FBI has acknowledged, are a deputy assistant Air Force secretary and an employee of the Marine Corps’ Installations and Logistics Division.

Moreover, Hochbrueckner said those who briefed the Armed Services Committee on Thursday were unaware that any evidence in the case had been destroyed. Hudson had said in a statement filed in court on Wednesday that investigators have reason to believe that some suspects in the case have already destroyed some evidence.

Committee sources said Gordon told the committee that the inquiry has not implicated any active-duty uniformed personnel and “goes no higher” than former Assistant Navy Secretary Melvyn R. Paisley, who served as one of Lehman’s chief aides from 1981 until 1987.

Not Named as Target

Although Lehman has never previously been identified as a target of the investigation, The Times has reported that wiretaps uncovered evidence that he may have warned Paisley that his telephone was being tapped by investigators. Lehman, however, was not one of the parties in the recorded conversation in which this information was gathered.

During Thursday’s briefing, Gordon was said to have expressed confidence that the cases being developed against the suspects will be strong.

“They will definitely be convicted,” said Rep. Barbara Boxer (D-Greenbrae). “It’s pretty ironclad. I feel very confident that this is not going to fizzle out--in fact, they used those words.”

Sources who attended the committee briefing were told that all of the approximately two dozen people now under investigation have already been identified publicly. Among those under scrutiny, only Paisley was reportedly named during the briefing. Hochbrueckner characterized the suspects as “a few bad apples in a very large barrel.”

Committee Chairman Les Aspin (D-Wis.) said Gordon explained to the committee that the investigators were just beginning to build their cases, with indictments still months away.

Probe Only Beginning

“The information that has been collected so far is not much of an investigation, but more like the result of information-gathering,” Aspin said. “From now on the investigation really begins. That is why they say don’t expect indictments before November or December.”

Gordon and the defense officials repeated Hudson’s earlier assurances that no members of Congress are under suspicion in connection with the inquiry. In fact, Rep. Roy Dyson (D-Md.), one of those whose name has been linked to the probe, told reporters brusquely as he left the room: “There’s no members (involved). They just told us.”

Hochbrueckner said members of Congress are not privy to the kinds of inside information that consultants had reportedly bought from Defense Department officials and sold to weapons manufacturers seeking to win Pentagon contracts. “That is not the kind of information that congressmen are privy to,” he said.

Hochbrueckner, whose Long Island, N.Y., district contains many employees of Grumman Corp., noted that “the major nut” in the investigation appears to be the Navy’s decision last December to permit a team of General Dynamics Corp. and McDonnell Douglas Corp. to build the super-secret advanced tactical aircraft. A competing team of Grumman and Northrop Corp. lost in the bidding.

The New York congressman indicated that he and some other members of Congress would press for the advanced tactical aircraft contract to be reopened if there is evidence that it was awarded on the basis of illegally obtained inside information. The contract promises to total at least $35 billion over the next decade.

“If Grumman lost the ATA contract because of inside information, I’m very upset,” he said. “You are talking about thousands of jobs over decades. They are not so far along (toward production) that you couldn’t change horses in midstream.”