Chairman William Proxmire (D-Wis.) of the Senate Banking Committee said yesterday he will request appointment of a special prosecutor to investigate possible perjury and obstruction of justice by Treasury Secretary G. William Miller in testimony before Congress.
Three Republican senators, Richard Lugar (Ind.), Bob Dole (Kan.) and Jake Garn (Utah), also called for appointment of a special prosecutor in the case.
Under a new law, any citizen has the right to ask the attorney general to appoint a special prosecutor to investigate a suspected crime by a public official. The attorney general has 90 days to decide whether to make such an appointment.
Attorney General Benjamin R. Civiletti has said that a Justice Department investigation found no evidence that Miller broke any law in the case.
But Proxmire charged yesterday that Miller gave "incorrect, erroneous, false and misleading" testimony at 1978 committee hearings on his nomination to be chairman of the Federal Reserve Board.
Proxmire also said it was not clear that Miller knew at the time that his testimony was incorrect, which is the central question.
"It is exceedingly hard to resolve," Proxmire said. "It's possible he knew. The circumstantial evidence is very, very powerful."
The case involves more than $5 million in improper payments made by Textron Inc., the Rhode Island conglomerate, while Miller was its chief executive officer in the late 1960s and 1970s before he moved to the Fed.
Most of the payments were to government officials abroad to help sales of military equipment by Bell Helicopter, a Textron subsidiary.
Textron is also alleged to have spent about $600,000 from 1971 through 1978 to entertain Pentagon employes as part of its effort to sell helicopters and other goods.
None of these payments was illegal when made.
Miller denied at his confirmation hearings for the Fed chairmanship and as Treasury secretary, and has continued to deny since, that he knew about these payments at the time.
He said again yesterday at a Banking Committee hearing on the issue that "My statements were made in good faith. But of course the investigations have disclosed that there were improper payments. It turned out that I was incorrect."
That brought expressions of incredulity from some senators. Lugar, for one, said he found it doubtful that Miller, who is known as a skilled administrator, could have run Textron all the time "without being aware of at least some of these matters."
And Sen. Paul E. Tsongas (D-Mass.) said of Miller's story, "From a person with less integrity than you, I would find that incredible."
Frustrated by his inability to quell such doubts, Miller at one point asked, "Isn't that enough? Am I ever to be free?"
At another point he said that "if the committee has no allegations against me and continues to persecute me," he would have to assume that its inquiry was politically motivated.
During the day, Miller repeatedly told the committee that he "should have done more" to uncover the alleged corruption at Textron.
At one point, Proxmire replied "I appreciate that, Mr. Secretary. But it appears that you did very little."
Sen. Alan Cranston (D-Calif.) said he opposed the appointment of a special prosecutor, but he made it clear that he was troubled by Miller's testimony.
"I hope the lingering doubts I and others have will never become a reality," Cranston said.