Charges dropped against ex-Reagan budget director

Federal prosecutors dropped charges Friday against former Reagan budget director David Stockman, who was accused of overseeing a sweeping fraud at a troubled auto parts supplier that he led before the company collapsed into bankruptcy.

The U.S. attorney’s office in Manhattan said that a “renewed assessment of the evidence” in the case and information learned after his indictment led to the action. Charges were also dropped against three others.

Stockman, 62, had been charged with conspiracy to commit securities fraud, to make false filings with the Securities and Exchange Commission, to falsify books and records, to lie to the auditors, to commit wire fraud, to commit bank fraud and to obstruct justice.

Stockman’s attorney, Elkan Abramowitz, said he was grateful that prosecutors reviewed the case.

“We were confident at some point that David Stockman would be vindicated because we knew from the beginning he had committed no crime,” Abramowitz said.

Stockman was President Reagan’s budget director from 1981 to 1985. He created controversy early in his tenure when he told an interviewer that he thought Reagan’s across-the-board tax cuts were a “Trojan horse,” or ruse, for lowering taxes on the rich.

Stockman was chief executive from 2003 to 2005 at Collins & Aikman, based in Southfield, Mich. He became a member of its board of directors in 2000. The company makes auto interiors, carpets, acoustics, fabrics and convertible tops.

Prosecutors had said Stockman and others knew that Collins was in financial trouble in December 2001 and began manipulating the company’s earnings reports to hide information.

The company was forced to enter bankruptcy proceedings in May 2005 -- one of several collapses to rock the auto parts industry in recent years.