Pentagon Probe Figure Admits Bribing Paisley

High-living defense consultant William M. Galvin, a central figure in the Ill Wind probe of Pentagon corruption, pleaded guilty Wednesday to charges that he bribed two senior Defense Department officials to help his clients win lucrative military contracts.

Galvin, who also pleaded guilty to federal conspiracy and tax evasion charges, said in court documents that former Assistant Navy Secretary Melvyn R. Paisley participated with him in a fraudulent scheme in 1986 and 1987 to steer a $100-million Navy contract to a pair of Israeli businessmen.

Galvin and Paisley, who became business partners after Paisley left the Navy in 1987, were to share $1 million in payments from the businessmen, who represented an Israeli firm making unmanned battlefield surveillance planes and ground-control stations for the craft.

In the court papers, Galvin stated also that Victor D. Cohen, a former senior Air Force procurement official, gave him confidential data on the competition for an Air Force radar contract in exchange for cash payments.

Galvin said he helped Cohen open a Swiss bank account and funneled $123,000 from 1985 to 1988 to a friend of Cohen with the knowledge the money would be passed on to the Air Force official.

The influential consultant, whose lavish entertainment of Pentagon officials and defense contractors included elaborate dinners at his 17-acre estate in rural Virginia, chartered jets and travel aboard the Queen Elizabeth 2, is the most important target convicted so far in the four-year Pentagon investigation.

Prosecutors predicted that Galvin’s plea and his agreement to testify against his former friends and business partners will help the government make its case against Paisley and Cohen, the investigation’s chief remaining targets. Galvin is the 35th individual to be convicted in the Ill Wind probe.

“This was a very significant plea,” Assistant U.S. Atty. Joseph J. Aronica said. “Galvin will be cooperating and will be a key (figure) in moving the investigation forward . . . .”

Paisley’s attorney, Washington lawyer E. Lawrence Barcella Jr., acknowledged that Galvin’s admissions might seem to implicate Paisley, but he suggested that Galvin exaggerated the charges under pressure from prosecutors.

“Mr. Paisley maintains his innocence,” Barcella said. He refused to discuss whether his client had entered into plea negotiations with prosecutors.

Neither Cohen, who was dismissed by the Air Force in 1987, nor his attorney, Julian S. Greenspun, could be reached for comment.

Galvin pleaded guilty to one count of conspiracy to defraud the United States and to commit bribery, two counts of bribery and one count of income tax evasion. The felony charges carry potential maximum penalties of 40 years in prison and $1 million in fines.

The former Marine Corps pilot entered his plea before U.S. District Judge Claude M. Hilton in Alexandria, Va. His voice cracked as he tried to say “Guilty” in answer to the judge’s reading of the fourth charge. Sentencing was set for Aug. 3.

As a result of the tax evasion plea, Galvin is required to file new returns for the years 1985 through 1988 to reflect hundreds of thousands of dollars in illegal payments from contractors stashed away in the Swiss bank account of one of his many front companies.

According to the IRS, Galvin owes the government $647,548, including nearly $235,000 in penalties.

Galvin’s plea offered the most graphic description yet of the corruption in the Pentagon procurement system uncovered by the Ill Wind case. According to Galvin’s statements, Paisley directed the Navy to buy the Israeli surveillance drones in return for a one-quarter share of kickbacks amounting to 2% of the overall value of the contract.

Galvin swore also that Cohen provided highly confidential data about the bid of a firm competing with one of Galvin’s clients, Loral Corp., for an Air Force radar contract. In December, Loral pleaded guilty to conspiring with Galvin to influence Cohen and paid fines and reimbursements of $4.7 million.

Federal officials identified Paisley as a chief suspect when the Ill Wind investigation became public in June, 1988, after the homes and offices of more than 40 defense contractors, consultants and Pentagon officials had been searched.

Paisley, a former Boeing Co. executive, oversaw billions of dollars in procurement contracts during his Navy service from 1981 to 1987, a time of massive increases in all types of military spending.

Galvin often bragged to associates and potential clients about his influence with Paisley. At the height of his career as an access-peddling defense consultant, he was paid at least $400,000 a year by numerous clients, including several six-figure contracts from major military suppliers. Among his clients were Northrop Corp., Unisys Corp., Martin Marietta Corp., Hercules Inc., United Technologies Corp., LTV Corp. and Cubic Corp.

Galvin and Paisley briefly shared offices at the pricey Watergate complex in Washington after Paisley left the Navy. The two had a falling out and are no longer speaking, associates said.

The federal case against Galvin was built largely from months of electronic surveillance of his home and office. He spent hours being debriefed by federal prosecutors about his business dealings with Paisley, Cohen and other officials and consultants.

According to a statement of facts signed by Galvin, he advised Paisley on how to hide funds in Swiss accounts and how to “launder” them through legitimate businesses to conceal their origin and avoid taxes.

Galvin provided similar services for Cohen, according to his sworn statement.