Lehman Helped Paisley Retain Access to Secrets

Then-Navy Secretary John F. Lehman Jr. personally helped Melvyn R. Paisley, a former assistant who is now a central figure in the Pentagon fraud investigation, retain high-level security clearances when he left the Navy Department last year to work as a private defense consultant, The Times has learned.

Lehman, according to Defense Department sources, insisted that top Navy officers provide Paisley, his good friend and assistant secretary of the Navy for research, with a consulting agreement as well as uninterrupted access to classified material.

Cleared for ‘Black’ Data

Paisley, who left the government in March, 1987, had clearances that included access to ultra-sensitive “black” programs, which are considered so sensitive they are not disclosed in the Pentagon’s budget.

“Lehman did, in fact, intercede,” one Pentagon official said. “When you resign, your clearances are terminated. The secretary reinstated those clearances for Paisley . . . .”

Lehman’s successor, James H. Webb Jr., said he was so alarmed by Paisley’s consulting agreement with the Navy that he canceled the pact on April 13, 1987, four days after he was sworn in as secretary of the Navy.

‘Just Didn’t Look Right’

“It was brought to my attention,” Webb said in an interview. “I didn’t like the idea of him being a consultant, period . . . . It just didn’t look right . . . . It would have given him the ability to come in and continue to get updated on all the major programs.”

Lehman’s arranging of Paisley’s security clearance highlights anew his close relationship with Paisley and his role in helping Paisley make the transition from senior Pentagon official to private defense consultant.

Paisley’s contract with the Navy was severed after only two weeks.

E. Lawrence Barcella Jr., Paisley’s attorney, said that Lehman had been trying to set up an “orderly transition” by retaining Paisley’s services and his clearances.

“Is there something that occurs the day after (Paisley resigned) that makes his access to that situation somehow less reliable?” Barcella said in an interview.

“I mean, as I understand it, there was not an immediate successor named to fill his position . . . . If what Secretary Lehman was trying to do is ensure there was some continuum to make sure there wouldn’t be a vacuum in the office, I hardly see where that is anything other than an efficient, laudable way of doing business,” he said.

The Times has reported that FBI investigators are pursuing information obtained from a third-party wiretap that Lehman may have warned Paisley that his telephones were tapped as part of the Pentagon procurement investigation.

Lehman, now an executive with the Wall Street investment firm Paine Webber Inc., said Thursday that he would have no comment while the Pentagon investigation is under way.

Recruited From Boeing

Lehman recruited Paisley from Boeing Co. in 1981 to serve as his assistant secretary, and the two resigned from the Pentagon last year shortly before “revolving door” legislation took effect on April 15. Under the new legislation, anyone leaving the Pentagon after that date was barred for two years from accepting compensation from defense contractors with whom they had had direct dealings.

Government sources have told The Times that Paisley allegedly had access to classified materials smuggled out of the Pentagon while he was a private consultant. A search warrant served last month on McDonnell Douglas Corp. alleged that, after Paisley left the Pentagon and became a consultant, he funneled confidential bidding documents to the company.

Paisley represented McDonnell Douglas as a private consultant after leaving the Pentagon.

During his six years in the Navy secretary’s office, Paisley was Lehman’s right-hand man, Webb said. “From the six weeks I spent in transition with Lehman, it was very clear that Paisley was his key adviser on all issues.”

The Navy has no record of any formal consulting contract with Paisley, Cmdr. Mark Baker, a Navy spokesman, said. But he confirmed that some sort of an agreement had been worked out in March, 1987, that gave Paisley clearances to classified documents.

No Money Paid

“There were arrangements for a contract for Mr. Paisley to act as a consultant for the chief of naval research, and Mr. Paisley did operate as a consultant . . . “ Baker said. “But no contract was ever formalized and no money was ever awarded (by the government). The Navy ceased to sponsor any access for Mr. Paisley effective April 13, 1987.”

Baker did not explain why Paisley was allowed to retain his clearances without a written agreement. Webb said he believed that the Navy had drawn up a written contract with Paisley, although he never saw it.

Some former Pentagon officials have retained access to classified material as official consultants to the Defense Department, and many individuals in the defense industry are granted security clearances in connection with their business duties. It is considered unusual, however, to allow a military or civilian official to carry extremely high-level clearances directly into private industry.

Webb said that all of his clearances were taken away the day after he resigned as secretary of the Navy.

Stripped of Clearances

Similarly, Lawrence Korb said he was stripped of all clearances the day he resigned in 1985 as assistant secretary for defense, a position ranked above Paisley’s and one that went unfilled for three months after Korb’s departure.

Calls for Inquiry

Retired Rear Adm. Eugene J. Carroll, deputy director of the Center for Defense Information, called on Pentagon officials to investigate the “unwarranted” security access granted to Paisley.

“It’s highly unusual, if not unique,” Carroll said. “I’ve never heard of anybody going out who wasn’t debriefed.”