UC Regents Deny Charges of Concealing SEC Inquiry : Education: Officials refute allegations by the inspector general of the U.S. Energy Department that they concealed an ethics probe. They say accusations will not threaten contracts.

University of California officials on Friday strongly denied allegations by a U.S. Department of Energy official that they tried to conceal a financial scandal at the Lawrence Livermore National Laboratory, which UC operates for the department.

UC officials also said they doubted that allegations by the Energy Department’s inspector general, John C. Layton, would jeopardize UC’s management of national weapons laboratories or its other large federal contracts. Layton has recommended that the agency consider barring UC from such contracts for not promptly telling the agency about an investigation into alleged insider stock trading by a Livermore official.

“We are satisfied the university’s obligations under the contract with the DOE have been fully satisfied in these circumstances,” James E. Holst, UC system general counsel, told the regents during a meeting at UCLA.

UC regents Chairwoman Meredith Khachigian said she and other regents knew nothing about a Securities and Exchange Commission investigation of the Livermore general counsel, William C. DeGarmo, until he was fired last month.

DeGarmo had traded stocks of a computer firm that was about to lose Livermore business. Without admitting wrongdoing, he entered into a $54,322 civil settlement with the commission on Dec. 1.

A few top UC administrators said they had known about the inquiry for the last year but waited until the court settlement to inform Khachigian and leading members of the UC team negotiating to renew contracts to administer three energy and weapons labs.

“We do not routinely report all personnel matters to the board (of regents),” UC President Jack W. Peltason said Friday. “Many personnel actions are taken in an institution of this size and complexity.”

Other UC officials said the matter was not reported to the Energy Department before the court settlement to protect DeGarmo’s rights and reputation in case the allegations proved false.

After more than a year of negotiations, UC signed contracts with the agency in November. According to Layton, the DeGarmo matter could have been an important factor in the renewal talks, a contention that UC leaders deny.

A Department of Energy spokesman said that Layton’s suggestion is being considered but that the decision will be left to the Clinton Administration, which takes over Wednesday. But UC officials expressed confidence that the matter was settled with DeGarmo’s dismissal.

In other business Friday, the regents announced the formal selection of Laurel L. Wilkening as the next chancellor of UC Irvine.

Wilkening, provost at the University of Washington in Seattle, told a news conference at UCLA that she has only visited the Orange County campus once and wants to do “a lot of listening and a lot of reading” before she announces her plans for the school.

She said she is interested in strengthening undergraduate education and reaching out to local school districts that are working with industry to improve the state’s economic climate.

Wilkening, 48, is scheduled to take over the Irvine job July 1 with an annual salary of $179,000. She will be the third chancellor in the 28-year history of the campus, after founder Dan Aldrich and UC chief Peltason. She will be the second female chancellor in the nine-campus system. The other is Barbara S. Uehling of UC Santa Barbara.

Also on Friday, the regents authorized final talks for UCLA to buy the 495-seat Westwood Playhouse and use it for professional and academic productions.

The theater building, on Le Conte Avenue just south of the campus, may cost $5 million, sources said.