Inquiry Seeking Paisley Foreign Business Ties : Possible Bribery of Ex-Official Studied

Federal agents are investigating whether Melvyn R. Paisley, while assistant secretary of the Navy, received money or gifts to steer multibillion-dollar contracts to major defense contractors, according to an FBI search warrant made public here Friday.

The document discloses also that Paisley is suspected of giving cash and gifts, ranging from tires to paintings, to one of his former Navy deputies. Paisley resigned as the Navy’s chief procurement official a year ago to become a private consultant to the defense industry.

Agents who searched Paisley’s home in McLean, Va., last month were also looking for evidence that Paisley’s wife, Vicki, may have received gifts or payments from defense firms doing business with the Navy while her husband was assistant secretary, according to the warrant.

And the warrant for the first time discloses government interest in Paisley’s possible links to foreign bank accounts and his possible interest in foreign firms, including an Israeli company that built remotely controlled “drone” aircraft under a Navy contract obtained while Paisley was overseeing Navy procurement.

Robert Plotkin, an attorney for the Paisleys, called the allegations contained in the warrant “the flimsiest and crudest” that law enforcement officers can make. “We believe there is no evidence to support them,” he said.

Plotkin said Paisley “denies having made any improper payments,” and he denied that Paisley had any foreign bank accounts or financial interests in foreign companies.

Among the items seized at Paisley’s home in McLean were:

--A report from an unidentified source on top-secret military “black” programs to a Paisley defense contractor client, Unisys Corp.

--A “confidential” 12-page memorandum on a “visit to China” that is not further described.

--A security badge issued to Paisley by General Dynamics.

--A consulting agreement between the Israeli company, Mazlat, and another foreign firm.

Plotkin said Paisley told him he did not possess any classified documents. However, the attorney refused to discuss specific items seized by the FBI.

Bank Statements Seized

Other items removed by agents were scores of bank statements, investment records, correspondence and business agreements, much of it related to the consulting work of Mrs. Paisley and Paisley associate William M. Galvin, another Washington defense consultant.

Paisley and Galvin have emerged as central figures in the sweeping federal investigation into allegations that the award of military contracts may have been influenced by bribes and gratuities paid by defense consultants for inside information from friends in the Pentagon.

Friday’s disclosures provide the most detailed accounting to date of investigative efforts to link Paisley to improper relations with foreign and American defense firms that received U.S. government contracts.

The 12-page warrant served on Vicki Paisley at the couple’s home June 14 sought all records relating to the consulting work that Melvyn Paisley and his companies--Cue International and Paisley & Associates--performed for Unisys, United Technologies, McDonnell Douglas, Martin Marietta, BDM, Ball Aerospace, Whittaker, EMS, Norden and Pocal.

Agents specifically were looking for internal Navy documents related to sales of the McDonnell Douglas-built F-18 fighter jet in Europe, according to the warrant. They also sought sensitive proprietary bidding information involving firms competing for contracts with companies represented by Paisley.

Investigators searched for documents indicating whether three major contractors--McDonnell Douglas, General Dynamics and Pratt & Whitney, a division of United Technologies--may have paid Paisley to help them obtain contracts.

Seeking Evidence of Gifts

The warrant said agents sought documents regarding “payment . . . to Paisley in the form of checks, gifts or other forms of remuneration, or to his wife,” while Paisley was assistant secretary of the Navy.

In the case of General Dynamics and McDonnell Douglas, agents are investigating Paisley’s role in helping the firms obtain the multibillion-dollar contract to develop the Advanced Tactical Aircraft, a new generation of jet fighter, the warrant disclosed.

General Dynamics officials insisted Friday the company has never relied on the services of Melvyn or Vicki Paisley.

“General Dynamics states unequivocally that it knows of no payments of bribes by this company or any of its people to Melvyn Paisley or his wife for any purpose at any time,” said Alvin A. Spivak, the firm’s Washington spokesman. He said he was “baffled” to hear that FBI agents had recovered a company security badge in Paisley’s home.

Investigators were also looking for evidence that Paisley may have been paid by Pratt & Whitney employees to help the company obtain a contract to build a sophisticated jet engine. The warrant called for recovery of any confidential bidding information from Pratt & Whitney’s competitor, General Electric.

It was not clear from the warrant if those documents were discovered during the search of Paisley’s home. A separate warrant used to search Paisley’s Watergate office has not been released.

In their search of Paisley’s home, investigators also sought “evidence disclosing periodic payments” to former Paisley aide James E. Gaines for Gaines’ “assistance” involving a classified Navy contract awarded to Martin Marietta. Paisley represented Martin Marietta after he resigned from the Navy Department.

The warrant suggests also that the FBI believes Paisley may have given artworks, including a Western painting entitled “Lonesome Whistle,” to Gaines, a deputy assistant Navy secretary who stayed on in the Pentagon after Paisley left on March 31, 1987, to become a consultant. Gaines was reassigned by Defense Secretary Frank C. Carlucci after his office was searched by federal investigators.

According to the warrant, agents were searching for “documentation pertaining to any other form of gratuities from either Paisley or Galvin to Gaines, including money . . . entertainment tickets, and tires.”

Paisley was Gaines’ superior when the two men worked together at the Boeing Co. in Seattle in the 1970s, and he brought Gaines to work for him in the Navy Department in 1985. As one of Paisley’s top aides, Gaines helped draft Navy procurement policy and was an adviser to the Naval Research Advisory Committee, a secretive group comprising academics and top defense industry technical experts who help the Navy plan for its technological needs.

Among the items the FBI looked for in Paisley’s home was an unidentified Naval Research Advisory Committee study that involved the Colorado-based Ball Aerospace Systems Group, according to the warrant. A spokesman for Ball refused to comment on the report other than to say that federal authorities have told the company that it is not a target of the investigation.

Ball built NASA’s infrared astronomical satellite and the shuttle-launched earth radiation budget satellite, which gathered information on global warming trends and the so-called “greenhouse effect.”

Improper Gifts Denied

An inventory of items seized in the search does not indicate whether agents found evidence that Paisley gave money or gifts to Gaines. Plotkin said Paisley did not make any “improper gifts.” Gaines’ attorney was not available Friday, and a woman who answered the telephone at Gaines’ home said he would have no comment.

Agents were also seeking information about correspondence and meetings between Paisley and others at the Pentagon, including a Defense Department official identified only as “Cohen.” Victor D. Cohen, deputy assistant secretary of the Air Force for tactical systems acquisition, is one of six Pentagon officials reassigned since the scandal broke.

Also named in the warrant is Dr. E. Ann Berman, a one-time aide to Paisley who served as deputy assistant Navy secretary for communications and intelligence from November, 1983, until her resignation last March 31.

Berman was unavailable for comment, but her husband, Jim Berman, said: “My wife is a straight arrow.” He added that she works in classified areas and does not discuss her work with him.

In the search of Paisley’s house, the FBI looked for “documentation, correspondence, notes, memoranda, calendars and date books regarding Paisley’s meetings with Ann Berman” regarding a highly advanced computer development project called MIMIC.

MIMIC, an acronym for Microwave/Millimeter Integrated Circuit program, is described by a Navy spokesman as “the next generation in (computer) integrated circuit design.”

The FBI is also interested in Paisley’s contacts with Richard Rumpf, Paisley’s chief deputy when he was at the Navy Department. Rumpf now serves Paisley’s successor in the same role.

Agents were looking for documents written by Rumpf involving a top-secret “black” program, according the warrant. Rumpf did not return repeated telephone calls Friday night.

Staff writers John Hurst and Jim Schachter contributed to this story.