Treasury Secretary G. William Miller said yesterday that while chairman of Textron Inc. he was "not personally involved in any way . . . with any illegal payments to government officials any place in the world."
He also said that he does not intend to resign, and that President Carter has not asked him to.
Miller spoke at a news conderence a day after the Securities and Exchange Commission, as part of a suit against Textron, asserted that the company spent $600,000 from 1971 through 1978 entertaining Pentagon employes, that "contrary to Textron's procedures no substantiation for these expenses was retained," and that Miller as chairman knew this.
Miller said the Senate knew of the entertainment fund when it confirmed him last year as Treasury secretary with one dissenting vote, by Sen. William Proxmire (D-Wis.).
Miller said that Textron gradually stopped the entertainment outlays after Proxmire inquired about the practice in a letter to it and other defense contractors in 1975.
According to other sources, the entertainment expenses had been the subject of internal discussion at Textron at least since 1968. Memos were sent to Miller by company tax experts beginning in that year, discussing the entertainment outlays in connection with an Internal Revenue Service audit of Textron's tax returns.
According to a memo sent to Proxmire by the SEC last summer, Textron had been deducting the entertainment outlays as business expenses, without naming those being entertained.
The IRS basically gave Textron a choice: name the names to demonstrate the business nature of the entertainment, or stop claiming the deductions. The company forfeited further deductions.
A special committee appointed by Textron's directors to examine its financial conduct reported in 1979 that Miller got further memos on this subject from the company's tax department in every year from 1968 through 1974. The committee said of the company's habit of not naming those it entertained: "This practice was apparently instituted to avoid embarrassment to Department of Defense officials." Acceptance of favors such as those involved here are against Defense Department rules.
The SEC said in a suit filed Thursday that the entertainment was "generally through the provision of meals."
Two Textron divisions, Bell Helicopter and Fafnir, which makes ball and roller bearings, do business with the Pentagon.
Miller was chief executive officer of Textron from 1968 through 1978, when President Carter chose him to be chairman of the Federal Reserve Board. He left the Fed for Treasury last year.
At his original confirmation hearings, it was charged that Textron made improper payments to officials of various foreign governments in connection with its operations abroad. Miller denied knowledge of those payments, which at the time were not against U.S. law.
The entertainment fund was not mentioned in those first confirmation hearings. Proxmire did briefly mention it last year on the Senate floor, in debate on Miller's Treasury nomination. But it basically went unnoticed.
The SEC began its investigation of Textron after the first set of hearings. The SEC is mainly concerned that companies fully disclose their financial affairs, as protection for investors. Its suit on Thursday charged that Textron had published misleading information mostly because it didn't disclose some disputed payments. The entertainment outlays were cited in this connection.
Miller in yesterday's reply noted that the entertainment expenses were not themselves illegal, and said they were so small in relation to Textron's overall income and expenses that there was no need to single them out in the company's financial reports.
He also said they were minor amounts in another sense: Less then $100 per guest. "It wasn't exactly out-on-the-town kind of stuff," he said.
As to the various Textron payments abroad, mainly in connection with military sales, Miller repeated that he had not been aware of them, at the same time acknowledging that some were questionable and perhaps even illegal. "I have to take full responsibility for not being adequately informed," he said.
After the suit was filed Thursday, Textron agreed to entry of a consent decree. It neither admitted nor denied what was charged, but did consent to take certain kinds of remedial action.
Proxmire said his Senate Banking Committee will decide within a few days whether to reopen its investigation of Textron during Miller's chairmanship. He would not say whether he thought Miller should resign, saying, "That's entirely up to the president."