The Defense Department's general counsel admitted to a federal judge yesterday that lawyers from the department acted improperly in sending a controversial government report on defense communications to American Telephone & Telegraph Co. at the same time it was sent for review to 43 government officials.
William H. Taft IV, the top DOD attorney, made the admission in testimony before U.S. District Court Judge Harold Greene. The report was submitted as evidence by AT&T in the Justice Department's antitrust suit against the company. Greene is presiding over the trial.
Greene held an evidentiary hearing at his initiation yesterday to determine the weight the report should be given in the case because its principal authors had three meetings with AT&T officials to discuss it before the memo was written.
The report, which later was sent to the Cabinet Council on Commerce and Trade, and was discussed in a meeting with President Reagan, suggests that if the Justice Department is successful in breaking up AT&T, the result would be "lethal" to the national defense communications system.
Greene asked Taft whether it was appropriate for John T. Whealen, general counsel of the Defense Communications Agency, to "send a copy to a private entity, when all other copies are going to government departments."
"I did not know that it was done, and I didn't think it should have been done," Taft said. The Justice Department received the report on July 7, eight days after it arrived in AT&T's Washington offices.
During the day-long hearing, Whealen, another DCA lawyer and the officials of AT&T with whom they met admitted that AT&T materials about telephone network planning and the consequences of divestiture were discussed during the three meetings, although the AT&T officials said they did not know the briefings were to be used in preparing the report.
The report was ordered by Taft, who was acting as Defense Secretary Caspar Weinberger's representative in talks with Assistant Attorney General William Baxter concerning the DOD's long-held opposition to the case. Weinberger has said that the Justice Department should drop the case.
Greene, who said he would issue a ruling on the worth of the paper by next week, angrily rejected the suggestion by AT&T lawyer George Saunders that the paper is "an admission of fact" of the Justice Department, the cabinet counsel and the president.
"Whatever somebody else may have said in another forum, no matter how exalted or how knowledgable, is immaterial for purposes of this lawsuit, except" when the court admits their testimony, Greene said. "The position of the United States in this lawsuit is being stated by the lawyers for the United States, and not by people making statements in other forums."
Whealen and DCA lawyer Randall McPherson prepared the report during May and June before distributing it on June 30. Greene asked Whealen whether he thought it "odd" to do this study and "ask the one who is supposedly the victim of this divestiture plan to give his views and then incorporate them" in the paper.
Whealen said he asked AT&T Long Lines Vice President Robert Gradle for help in the paper's preparation because he "figured they knew more about what the divestiture would do to them than we did. We needed information that we did not have internally in the government," said Whealen, who has held his post for 11 years,
At one point, Whealan was asked by Gerald Connell, the government's top lawyer in the antitrust case, about Whealen's written testimony in which he had said no one in government had previously investigated the network planning process.
Whealan responded: "I have asked that question of AT&T and I have asked it of a number of other people in the government and I have every reason . . ." Greene then interupted Whealen to point out that "AT&T is not in the government."
"Yes, sir, I understand," Whealen then responded.
The report was introduced by AT&T last week after Howard Trienens, the top AT&T lawyer, asked Gradle whether AT&T could introduce the paper into evidence. Gradle called Whealen and was given permission. "Whether or not it could be introduced was none of my business," Whealen said.
Greene asked Whealen whether he was familiar with the code of professional responsibility, "which prohibits communication between lawyers for one party and the client." He said he was and said he "felt free" since the report already had been released to AT&T and others.