American Telephone and Telegraph Co. agreed last night to suspend proceedings on a complaint it filed in October over telephone equipment contracts worth $55 million. The move came after the General Services Administration apparently revealed details to AT&T lawyers about a criminal probe of the same contracts that the agency is conducting.
AT&T had been fighting a request from the GSA to suspend its complaint, saying that the GSA had not shown why the complaint and the criminal probe would conflict. AT&T had hinted that the GSA, which awarded the contracts, was merely trying to blunt its probe.
The apparent disclosure to lawyers for AT&T and other companies involved in the case came yesterday morning during a hearing before Judge Vincent A. LaBella of the Board of Contract Appeals, an independent body that adjudicates contract disputes. The hearing was called to consider the GSA's request that action stop on AT&T's complaint. The GSA also asked LaBella to close the hearing. "Disclosures may be given which could have a prejudicial impact" on GSA's own investigation, GSA general counsel Clyde C. Pearce Jr. told LaBella.
Pearce also said disclosures could unfairly harm the reputation of individuals who, in fact, may have done nothing wrong.
Kevin Baine, an attorney for The Washington Post, argued briefly that the hearing should be kept open. "There is a burden on GSA to establish why it should be closed," Baine told LaBella. LaBella later closed the hearing to hear from the GSA on why continuing with AT&T's probe would damage the investigation, then reopened it for arguments that did not touch on the nature of GSA's probe.
In the afternoon, lawyers for the opposing sides worked out an agreement by which the AT&T probe would be suspended until Dec. 30. As of last night, the agreement had not yet been approved by the board.
Under the agreement, the GSA would obtain from the Justice Department -- which is reviewing the case -- reports on the scope and terms of the department's probe by Dec. 30. AT&T would have access to all or some of the information.