President Carter's nomination of industrialist G. William Miller to head the Federal Reserve Board has hit a rockier road than anticipated as the Senate Banking Committee investigates whether his company bribed the late commander of the Iranian air force to get a big helicopter contract.
When the President said he would nominate Miller, chairman of the Providence-based conglomerate Textron Corp., the only problem apparent was Miller's lack of experience in monetary mattes, a condition many Senators consider an asset.
Committee sources said that it still appears likely that the banking committee and the Senate will approve Miller, although much later than anyone had expected.
The Securities and Exchange Commission also has begun an inquiry into the $2.9 million payment Textron's Bell Helicopter division made to Air Taxi Co. of Tehran, to cancel Air Taxi's long-standing contract to be sales representative for Bell in Iran.
Air Taxi was controlled - through a nominee - by Mohammed Khatami then head of the Iranian Air Force, who died in a glider accident in 1975.
When Seattle Banking Committee chairman William Proxmire (D-Wis) confronted Miller about this at confirmation hearings last month, Miller confirmed that Bell Helicopter had made the $2.9 million payment to Air Taxi at about the same time Bell signed a $500 million contact to provide helicopters to Iran.
But Miller said the payout was made to cover Air Taxi's work on helicopter sales in the past. He said that if Bell had not concelled the contract, Air Taxi would have collected $37.5 million in commissions on the helicopter sales, far in excess of the contributions Air Taxi would have made.
Miller told Proxomire at the Jan. 24 hearings that he was not aware that Khatami was the secret owner of Air Taxi. He told reporters during a recess hthat he would be "amazed" if Proxmire's information were true.
But testimony by a former Bell Hellicopter sales represerntative in Iran - who claims he was run out of the country by Khatami - to the banking committee this week casts some doubt on Miller's claim that he did not know about Khatami's relationship with Air Taxi.
William H. French, who made separate statements to the Senate Banking Committee and the SEC, said that he and his attorney C. Robert Bell of Wichita many times told top Bell Helicopter officials, including then-president Edwin S. Ducayet, that Khatami controlled Air Taxi through a nominee.
In fact, attorney Bell told several reporters after his deposition before the banking committee. Bell Helicopter officials were anxious to make sure that any agreements the company signed with French had Khatami's approval.
Neither French nor his attorney said they had ever dicussed the situation with Miller. Only French had ever met Miller, in "1964 or 1965 at the Paris air show," he told reporters.
Bell said he had no idea whether Miller knew about Khatami's relationship with Air Taxi. But he said if Miller did not know, it "was only because he wasn't paying attention. It was so obvious to anybody who wanted to inquire."
But, one Senate source familiar with the course of the investigation said, "If you believe French and Bell that the highest officials in Bell Helicopter were aware of Khatami's role, then you have to reach a judgement about how reasonable it is that Miller knew."
Air Taxi was Bell Helicopter's sales representative in what was virtually a non-existant market from 1959 until 1964, when Bell switched to French's firm. Air Taxi was one-third owned by Khatami until 1965 when Shah of Iran put new conflict of interest laws into effect. Air Taxi's ownership was changed, so that Khatami was no longer a shareholder of record but controlled the company through a nominee.
Frence's attorney said French was thrown out of Iran in 1966 on trumped-up charges because Khatami wanted control back over all helicopter sales. He said negotiations to operate jointly with Khatami were unsuccessful. At the end of 1967. Bell Helicopter cancelled its contract with French and rehired Air Taxi.
The banking committee sent a team of investigators to Bell Helicopter last week and will talk to former Bell Helicopter officials this week. The committee will study the result of the staff investigation Feb. 22.