New reports about a relationship between Richard V. Allen, Ronald Reagan's chief foreign policy adviser, and fugitive businessman Robert Vesco are causing some concern in the top councils of the Reagan campaign staff where Allen now sits.
The left-liberal magazine Mother Jones says in its September issue that Allen began meeting with Vesco while still actively on the White House staff in 1972 and become a consultant to Vesco's lawyer, Howard Cerny, after he left his White House job.
Allen received $60,000 from Cerny for his work with the Vesco organization, the magazine says. Moreover, Allen was still on the White House payroll at the time as a per diem consultant, according to personnel records there.
Reagan campaign sources said that if questions about Allen's relationship with Vesco persisted, they might prove embarrassing to the Republican nominee. Vesco, a secret contributor of illegal funds to Richard Nixon's 1972 campaign before fleeing the United States, is anathema to the GOP in this post-Watergate era.
Interviewed here, Allen acknowledged his association with the Vesco organization but insisted that there was nothing improper about it. He said he was retained by Cerny to examine the prospects for establishment of an "off-shore" or unregulated financial center on one of the Azores, similar to those in the Bahamas and elsewhere. The deal did not pan out, Allen said, and the contract was terminated after six months.
Allen vehemently denied us "utter nonsense" the allegation that he was on any White House payroll during this period. However, Mother Jones asserts and The Washington Post confirmed today, that White House payroll records list Allen as a "per diem" consultant to the office of special projects from Aug. 9, 1972 nine days after he left his full-time White House post -- until July 1, 1973.
Allen also said that he was not aware at the time of his relationship that Vesco was under active investigation by the Securities and Exchange Commission for bilking hundreds of millions of dollars from Investors Overseas Services, a Geneva-based conglomerate.
"I recall not knowing that Vesco was under investigation," Allen said.
Nonetheless, Allen arranged a meeting for Cerny with then SEC Chairman William Casey, who is now Reagan's campaign manager, at which the Vesco lawyer raised the issue of the SEC probe.
"I was terribly embarrassed," Allen said today, "it was an error of judgment [to arrange the session]. I subsequently apologized to Casey." He said he did not know that Cerny would bring up the subject.
Allen is principal coordinator of all Reagan foreign policy and defense advisers. He has emerged as the single most important figure in those areas of the Reagan drive, and attributes that role to these new charges.
"I recognize with my high profile I am fair game for any scurrilous suggestions," he said, "but I did nothing wrong."