The chairman of the Senate Banking Committee spelled out yesterday why he thinks Treasury Secretary G. William Miller "may have committed criminal perjury before our committee" when he denied, at 1978 confirmation hearings, any knowledge that his company, Textron, had bribed foreign officials.
Renewing his demand for appointment of a special prosecutor, Sen. William Proxmire (D-Wis.) wrote Attorney General Benjamin Civiletti that "there is every good objective reason to believe that Mr. Miller knew his testimony before this committee in 1978 was false and misleading."
Proxmire's letter, the most serious challenge yet to Miller's truthfulness, was based on a charge by the Securities and Exchange Commission that from 1971 to 1978 Textron Inc., which Miller headed at the time, paid $5.4 million to officials of foreign countries to spur sales of company produts. Miller said at the 1978 hearings that Textron hadn't paid any bribes and has since said he didn't know about them at the time, according to Proxmire.
One count of Proxmire's charges against Miller involves information that in 1973 Textron paid a $2.9 million commission to Air Taxi, its Iranian sales agent, in connection with the sale of helicopters to Iran. Iranian Air Force Gen. Mohammed Khatami was alleged to have an interest in the company.
Proxmire said that if Khatami did have a financial interest in the company and Textron knew it, by law the $2.9 million constituted a bribe. Proxmire said that in 1978 Miller had denied Khatami had an interest and had denied that either he or his company knew of such alleged financial interest.
Proxmire said the SEC report states the general did have an interest in Air Taxi and received $500,000 of the $2.9 million. Furthermore, Proxmire said, officials of Textron who worked with Miller knew of Khatami's ownership then and even had documents in their files on it.
"In fact," Proxmire wrote, "General Khatami's ownership of Air Taxi was common knowledge in Iran as testified to by State Department personnel and public source documents including a Commerce Department world trade data report supplied to Textron by the Commerce Department."
These facts, Proxmire said, "strongly infer" that Miller must have known of Khatami's financial involvement. In addition, he said, a Textron employe testified under oath in 1978 that he didn't know of the general's influence over military purchases, yet later the company turned over a subpoenaed internal document showing that this employe had previously discussed the general's influence with other employes.
Moreover, Proxmire said, on the very morning of Miller's 1978 confirmation, Textron turned over documents which "it said came 'into our possession at this last minute' confirming that public records in Iran showed General Khatami to have been chairman of Air Taxi."
Finally, Proxmire said, the company waited until June 21, 1978, two months after Miller was confirmed as chairman of the Federal Reserve Board to turn over to the committee a March 1971 Textron memorandum which contained evidence that the general owned an interest in Air Taxi.
In another charge, Proxmire said that Miller during the 1978 hearing was asked to report on allegations of a possible Textron bribe to Ghanaian officials in connection with a helicopter sale, and that Miller subsequently said "he did not know of any impropriety."
Proxmire said Miller had "reason to know" of such a bribe because on Jan. 25, 1978 -- only a day after he was requested to inquire into a bridge possibly -- Textron, it now turns out, destroyed a document revealing the bribe. "Senior officials at Textron knew that the Ghanian bribe had been paid.Mr. Miller discussed the Ghana transaction with those officials in connection with his testimony to this committee on the Ghana transaction."
Proxmire said that, in 1978, Miller not only denied the company paid bribes generally but also denied payments to Swiss accounts and "overbilling and accommodation payments" to facilitate bribery. Yet, Proxmire said, the SEC and other information now show that senior officials of Textron with whom Miller regularly dealt knew at the time Miller was testifying that some of his statements were false.
Civiletti, who said earlier this week he's convinced his fellow Cabinet member has no knowledge of the payments while head of the company, has a month to decide whether to appoint a special prosecutor -- or he can make a preliminary investigation and then decide.