Defense Fraud Charge Further Delays Tower Inquiry

An accusation by a suspect in the Pentagon fraud investigation that illegal campaign contributions were channeled to former Texas Sen. John Tower delayed action Wednesday on his embattled nomination as defense secretary until after the Senate returns from a recess Feb. 21.

In a meeting late Tuesday with prosecutors overseeing the defense fraud investigation, an operation known as Ill Wind, White House officials initially sought a speedy resolution of the latest allegation, government sources said. But prosecutors, citing the complex scheme outlined by the accuser, said that it will take several days to investigate.

The suspect who provided the information is understood to be negotiating a plea bargain with the government on his involvement in the huge fraud case.

Bush Firm in Support

The new allegation has not diminished President Bush’s support for Tower, Bush aides said. And in remarks to reporters, the President expressed a firm determination to see the nomination through.

“I have seen nothing, not one substantive fact, that makes me change my mind about John Tower’s ability to be secretary of defense, and a very good one,” Bush said.

“There’s always some other allegation and . . . to my knowledge, each one of them has been reviewed and shot down in flames.”

However, doubts about Tower appeared to be intensifying among members of the Senate Armed Services Committee, which is considering his nomination.

Sen. Sam Nunn (D-Ga.), the panel’s chairman, said he told Bush in a meeting Tuesday “that I have serious concerns and I also stated that, if a vote was held immediately, as some have urged, I would vote no because of these concerns.”

Sen. Alan J. Dixon (D-Ill.) said that Tower has “got to be pretty damaged goods by now. There’s considerable public concern about how effective he might be” at the Pentagon.

Cites Role as Consultant

Sen. Paul Simon (D-Ill.), who is not a committee member, came out publicly against the nomination, charging that Tower’s recent employment as a defense industry consultant would make him an unlikely person to oversee the reform of the Pentagon procurement process.

But Sen. John McCain of Arizona, a Republican on the panel, said that as long as Bush sticks with Tower, he will remain a viable nominee. “We all know there’s damage,” McCain said. “But that decision is made by the President.”

Officials were guarded in their comments about the latest allegation, which surfaced as the FBI was wrapping up an inquiry into recent allegations of womanizing and excessive drinking. They noted that pursuing the new charge will require detailed interviewing of several individuals said to be involved in the purported campaign funds scheme.

A source familiar with the allegation said it charged that illegal funds were received by a Tower aide while Tower was a U.S. senator. The source said that there was no indication of guilty knowledge on the part of Tower, who did not stand for reelection in 1984.

Noting that the accuser is involved in plea bargaining, one source said that this is a time “when persons are motivated to cut all kinds of deals.”

Pinning down the information is difficult, one official explained, because some of those possibly involved in the alleged campaign scheme are under indictment and represented by counsel. Their cooperation could be difficult to obtain without the government giving leniency in return.

Illegal campaign contributions first surfaced last month in the Ill Wind investigation when two Unisys Corp. representatives admitted that they had funneled corporate funds to five members of Congress, all of whom served on committees with authority over military procurement or defense issues.

Spokesmen for the five--Sen. Jim Sasser (D-Tenn.), Rep. Roy Dyson (D-Md.), former Rep. Bill Chappell Jr. (D-Fla.), Rep. William L. Dickinson (R-Ala.) and Rep. Richard Ray (D-Ga.)--strongly denied knowledge of the true source of the funds and said that the money would be returned.

Records at the Federal Election Commission showed that two prime targets of the defense fraud investigation, former Unisys Vice President Charles F. Gardner and defense consultant Thomas E. Muldoon, each contributed to Tower’s Senate campaign committee in 1983. Gardner gave $500 in June, 1983, and Muldoon $1,000 the same month.

Other Contributions

The records also showed that Muldoon gave contributions to a number of other members of Congress who served on defense-related committees, including Nunn.

The latest Tower allegation marks the second time that Tower’s name has emerged in connection with the Ill Wind inquiry. Defense consultants and others targeted in the investigation mentioned him a number of times in conversations that were monitored by FBI electronic eavesdropping.

FBI officials, however, had concluded that the references appeared to be no more than boasts by consultants seeking to impress clients with their Washington connections and said that there was no evidence of complicity by Tower in their activities.

However, the FBI is understood to have played the recordings for some of Bush’s transition aides before Bush announced that he would nominate Tower.

Sessions Disqualifies Self

It was learned Wednesday that FBI Director William S. Sessions has disqualified himself from taking part in any aspect of the Tower investigation because of Tower’s role in bringing him to Washington 20 years ago and backing him for appointments as a U.S. attorney and federal judge in the western district of Texas. Sessions removed himself at the outset of the confirmation process.

A White House official, after first expressing dismay over the surfacing of yet another allegation, said that it might turn out to be “a mixed blessing.” If no evidence is later found to support it, he said, the additional delay before the committee’s vote could cause some of the opposition to Tower to lose its “momentum.”

“There’s a dynamic to these things,” he said.

Staff writers John M. Broder, Melissa Healy and Paul Houston contributed to this story.