Wallach Tells of Taking Wedtech to Meese
E. Robert Wallach, taking the stand at his fraud and racketeering trial, testified Wednesday that a Wedtech Corp. employee approached him in 1981 and asked whether “a bleeding-heart liberal like me could take this to Ed Meese and see if those people could deliver.”
Wallach, a longtime friend of former Atty. Gen. Edwin Meese III, who was then serving as President Ronald Reagan’s counselor, said he turned to Meese as “the only person I knew in the federal government who could give me any direction as to what could be done.”
Wallach, 55, is charged with using his friendship with Meese to fraudulently obtain more than $500,000 from Wedtech, a now-defunct South Bronx defense contractor.
The San Francisco personal injury lawyer spoke to the jury in a rambling, conversational tone that often led U.S. District Judge Richard Owen to cut him off or direct him to answer the question.
Under questioning by his lawyer, Wallach described what he called “a very intimate relationship” with Meese from the days when they were neighbors in Oakland and their families shared back-yard barbecues.
After Meese joined the White House staff in 1981, Wallach said, Hal Lipsett, a friend who was a private investigator for Wedtech, told him about the company and asked him to “take this to Ed Meese.”
On a tour of the South Bronx factory, Wallach said, he was impressed when he heard some employees speaking “a form of Yiddish-Russian” and learned that founder John Mariotta had brought many Soviet Jews to the company.
“If I could bring a legitimate business enterprise to Ed Meese, I wanted to do it,” he said. “I was very excited. They were perfect. John was even a Republican.”
Wedtech executives told him that the Army was blocking their efforts to obtain a $32-million small engine contract, Wallach said.
“The problem was the usual problem for minority groups . . . " Wallach said before Owen cut him off.
“The Army said (Wedtech’s bid) is way too high . . . and we’re not going to give the contract up to this (minority) company. . . . They’d rather give it to a big company so nobody could be critical if the contract didn’t go right,” he said.
Wallach said he became convinced that “something was wrong” when the Army refused to grant Wedtech an audit, and Sen. Alfonse M. D’Amato (R-N. Y.) and other members of Congress got involved on Wedtech’s behalf. As a result, he said, “I went to talk to Ed about it.”
Wedtech received the contract after Meese’s office intervened.