Of Meese and Men

By Ed Magnuson

The widening Wedtech scandal last week rippled closer to Attorney General Edwin Meese. In New York City, U.S. Attorney Rudolph Giuliani produced indictments charging an old Meese friend, his investment counselor and a former Wedtech adviser with racketeering and fraud. Among their alleged crimes: extracting illegal payments from Wedtech for trying to get Meese to help the ailing, minority-owned, Bronx-based construction firm.

The latest of 15 people accused in the long-running affair are E. Robert Wallach, a Meese friend of 30 years and former personal lawyer who became a highly paid Wedtech lobbyist; W. Franklyn Chinn, a former Wedtech director who handled investments profitably for Meese in a "blind partnership" trust; and Rusty Kent London, a professional gambler and past financial consultant to Wedtech. The indictments contend that Wallach received a check for $300,000 from Wedtech in 1984, claiming falsely that the payment was for past legal advice to the company. "In fact," contended Giuliani, "the money was for future services, including efforts to influence Edwin Meese and other federal officials." Wallach, according to the indictment, told the company that he - had a job lined up at the Justice Department; he did not get one.

Meese has publicly conceded that, at Wallach's urging, he helped Wedtech get a "fair hearing" on a $32 million Army engine contract in 1982. The Army, which had considered Wedtech unqualified for the work, agreed to award the no- bid contract to the Bronx firm after an unusual White House meeting in the office of James Jenkins, then Meese's top deputy. Jenkins later went to work for Wedtech. At the time Meese was Counsellor to the President. Giuliani stressed that the defendants are not charged with illegally influencing Meese, but were indicted for the allegedly unlawful way in which they obtained payoffs for trying to do so.

Meese's possible involvement in the Wedtech affair is still being probed by Independent Counsel James McKay, who issued an interim report last week that fell short of fully clearing him. He said there was "insufficient evidence as of this date" to accuse the Attorney General of having "knowingly participated" in any crime. But, he added, "this is an interim, and not a final, determination." Referring to Meese, McKay explained that he eventually hopes to pursue a "number of unresolved questions on his involvement with Wedtech Corp. and other matters."

Answers were lacking, McKay explained, because Wallach, Chinn and London had refused to testify before the grand jury McKay had summoned. McKay said he was suspending his investigation of Meese until the New York City prosecutions are concluded. While all three men are expected to deny the charges, last week's indictments may induce one of them to end his silence.

Meese may be merely an innocent victim; he has testified before the McKay grand jury five times, answering all questions put to him. Nathan Lewin, one of Meese's personal lawyers, put the rosiest possible hue on McKay's announcement, saying he was "gratified" that the "most thorough investigation ever conducted of the personal finances of a public official . . . had been concluded at this time favorably to Attorney General Meese." Meese's patron, the President, once again asserted his confidence in his Attorney General.

With reporting by Raji Samghabadi/New York and Elaine Shannon/Washington