Ex-Navy Official Indicted in Gift Investigation : Inquiry: James E. Gaines is charged with turning over procurement secrets in exchange for favors. He was a target of Operation Ill Wind probe.

Another former high-ranking Navy official was indicted by a federal grand jury Tuesday on charges that he passed procurement secrets to defense consultants in exchange for gifts.

In an investigation widely known as Operation Ill Wind, James E. Gaines, a former deputy assistant secretary of the Navy, was charged in the seven-count indictment with conspiracy to defraud the government, conversion of government property, receipt of benefits by a public official and use of interstate telephone lines to promote a crime.

If convicted, he could be sentenced to up to 37 years in prison and fined $1.75 million.

Gaines, 64, of Seattle, was one of the leading targets of the investigation when it began in 1987, and his indictment by the federal panel in Alexandria, Va., brings the government near the end of its list of cases in the scandal.

Already, the investigation has yielded 52 convictions and resulted in the return of $225 million to the U.S. Treasury.

Gaines was a former associate of another of the chief targets of the inquiry, Melvyn Paisley, a former assistant Navy secretary. Investigators say that after Paisley left the Navy, Gaines helped him set up a defense contracting business in 1987 with another former official, William Galvin.

Paisley was sentenced last month to four years in prison for his guilty plea to unrelated bribery and conspiracy charges, while Galvin has pleaded guilty to separate charges in the Operation Ill Wind investigation.

Investigators presented telephone logs in which Paisley described Gaines, in a telephone call to Galvin, as “not a bad crook.”

Gaines allegedly asked Galvin to provide him free tickets to performances at the Kennedy Center in Washington. Gaines also repeatedly asked Galvin to arrange for a Washington firm to supply tires for his daughter’s Buick, and Gaines accepted a lithograph from Paisley valued at $1,300, the indictment said.

Investigators said the favors were sought and given in exchange for Gaines’ efforts to provide information on internal Navy deliberations and to steer procurement projects toward clients of Paisley and Galvin.