The State Department is reviewing the nomination of Dr. Ernest W. Lefever as assistant secretary for human rights to determine whether his influence on the U.S. policy on marketing infant formula in Third World countries was a conflict of interest because of his public policy center's financial relationship with U.S. formula manufacturers.
Sen. Charles H. Percy (R-Ill.), chairman of the Senate Foreign Relations Committee, has privately asked the White House to consider withdrawing the nomination, according to Senate sources. The White House has asked the State Department for details about Lefever's confirmation problems.
Since his nomination, Lefever has been working at the State Department on an unsalaried basis and is still drawing his $47,500-per-year salary as president of a public policy center that has received substantial funds from the Nestle Corp. and other infant formula manufacturers.
On Monday, Lefever testified that, while working at the State Department, he had discussed his opposition to the newly adopted international code prohibiting the marketing of infant formula in underdeveloped countries with U.N. Ambassador Jeane Kirkpatrick, a member of the Cabinet-level group that recommended the policy.
Lefever, one of the administration's most controversial nominees, has denied there is any conflict since he had not yet been confirmed and does not yet draw a government salary. "I am an American citizen and I can discuss policy issues with whomever I wish," he said during his confirmation hearings. p
Tuesday, however, Lefever changed his recollection.
"I reached Ambassador Jeane Kirkpatrick late this afternoon," he said in a memorandum to the State Department. "After comparing memories about all of our recent conversations we are in agreement that we never had a discussion of the Who [World Health Organization] infant formula health matter. We both vaguely recall a passing reference to the matter in early January which she said 'couldn't have lasted more than a minute and a half.'"
A well-informed source at the U.N. had said previously that Lefever discussed the issue with Kirkpatrick on several occasions in the last three months. However, after consulting with Kirkpatrick, the source gave Kirkpatrick's version.
The Washington Post has learned from sources familiar with the finances of Lefever's Ethics and Public Policy Center that a lawyer for Nestle, Thomas J. Ward, secretly contributed more than $10,000 to the center last year, in addition to the known corporate gift. Ward could not be reached for comment.
Lefever, under attack because of other Nestle contributions to his center, left the impression while testifying under oath at his Senate confirmation hearings on Monday that Ward had not made any contribution. This is because he testified that Ward was not the source of two Nestle contributions of $20,000 and $5,000 which have already been disclosed. He was not asked specifically whether Ward himself made any contributions.
In an interview with The Washington Post, Henry Ciocca, a former Nestle Corp. official, contradicted other points in Lefever's testimony. These include Lefever's repeated assurance that the Nestle contributions to his center had nothing to do with the center's decision to sponsor a study of the infant formula controversy and then distribute an article favorable to Nestle, the world's largest manufacturer of the formula.
Ciocca, former director of corporate responsibility for Nestle, said that Lefever discussed donations with Nestle for at least three separate projects that were of directl financial interest to Nestle.He was turned down in one case, Ciocca said, but in at least one other Lefever's center accepted funds from Nestle to reprint and distribute the article favorable to Nestle.
In a stormy confirmation hearing on Monday, Lefever testified that, "Nestle had nothing whatsoever to do with it [the decision to print the article]. Nestle had nothing to do with the production of the article. . . ."
Ward's secret contribution and Ciocca's account supportl the version of events contained in an internal Nestle memorandum, the authenticity of which Lefever questioned during his confirmation hearing.The memorandum said in part that "there should be maximum exploitation of the opportunities presented by . . . the Ethics an Public Policy Center's willingness to undertake additional activity."
Although Lefever suggested at the hearing that the letter might be a forgery," Nestle has not disputed the memorandum's authenticity after it first surfaced in The Washington Post on Jan. 4, 1981.
At another point in the memorandum, it says, "Mr. [David] Guerrant [Nestle USA president] is somewhat concerned that Nestle should not be seen to be the dominant subscriber to the Ethics and Public Policy Center. Mr. Ward informs us that there are ways in which this matter can be satisfactorily handled, and in view of his own contacts with Dr. Lefever and his presence in Washington, I suggest that Mr. Ward remain closely involved in follow-up activity with the center."
Lefever steadfastly denied in heated exchanges with the senators that the Nestle contributions influenced his actions at either the center or the State Department or that they violated "the policy of the center not to accept contributions for specific projects in which a donor has a direct or indirect financial interest."
Lefever's center also accepted contributions from two other manufacturers of infant formula, according to industry sources and former center employes. Both companies, Bristol Meyers and Abbott Laboratories, acknowledge making the donations -- $10,000 and $2,500 respectively -- at the time the study was to be under way at the center, but deny any direct connection.
Until Monday, Lefever refused to turn over his center's contribution records to the Senate committee on the gounds that the privacy of the contributors would be violated.
But according to Ciocca, Lefever showed the records to Nestle last year in an effort to extract a sizable contribution. On Monday, Lefever agreed to provide records to the committee within the next two weeks.
Lefever insisted under oath that "we didn't do anything to please Nestle. All our projects are determined by exactly the same process: a staff recommendation, a staff decision, the selection of an author, then the author is given complete independence in coming to his own conclusions. It was not a conflict of interest. . It had absolutely nothing to do with any financial support from any infant formula producer. The study would have been undertaken had not a penny come from Nestle or had we received a million dollars from Nestle."
At his confirmation hearing, Lefever was forced to return to the subject repeatedly. "The line of questioning implies that the project was undertaken because of a Nestle grant. There is no truth to that. The project was undertaken before Nestle was in the picture," he said.
According to Lefever's sworn account, he first approached the prospective author of the study, Fortune magazine editor Herman Nickel, on Oct. 4, 1979, and Nickel accepted on Nov. 21.
"So the study was undertaken, the author chosen, without any contact, any financial contact with the Nestle Corp. or any other producer of infant formula," Lefever testified.
Ciocca says that LeFever first met with Douglas Groner, a Nestle official and Ciocca's boss, in October, 1979, at least a month before Nickel agreed to do the project. Nestle contracted Lefever and his center, according to Ciocca, because "we wanted to established third-party relationships. The infant formula issue was part of it, but it was also to make people more aware of what happened [in business] . . . We didn't want to use corporate spokespeople on the infant formula issue because our credibility was low. We wanted third parties to take up the argument for us."
At the time, Ciocca said, Lefever wanted to "just explore again the posibility of Nestle becoming a contributor of the public policy center."
Lefever's testimony and Nestle's official account also differed from the recollection of a former employe of the center. He recalled that at least one staff meeting in late 1979 or early 1980, Lefever discussed how the center might disguise a forthcoming contribution from Nestle because it would "look like they [Nestle] were paying for the study." At the time the study, which was never actually completed, had not yet begun.
According to Lefever's testimony, Nickel was involved in a bicycle accident and never completed the study and was never paid. However in June, 1980, Nickel published an article on the subject in Fortune magazine. The article attacked the critics of the infant formula companies, characterizing them as "the Marxists marching under the banner of Chirst."
Ciocca said that Nestle considered the question of whether "to reprint the article by ourselves or through someone else." They decided to have the center circulate the reprint because of the company's low credibility, Ciocca said.
Lefever and Ward first met in July, 1980, when they sat down to discuss the Fortune article and "how we could continue to get the Nestle's message across," Ciocca said.
Lefever asked "whether we could fund specific studies on specific subjects other than Nestle's problem [on the infant formula question]."
Asked whether this included subjects in which Nestle had a financial interest, Ciocca said, "I guess everything we did had a financial interest."
On July 18, 1980, Nestle gave an additional $20,000 to the center. It did not give more, Ciocca says, only because the president of Nestle USA, Guerrant, did not want it to appear that Nestle was the largest cooporate funder of the center and $25,000 was the same amount that Mobil Oil Co. had given it.
The center reprinted the article in late July, 1980.
Ciocca said he also discussed with Lefever the possibility of the center's making and distributing a film about infant formula controversy, "to be more directly communicative to a wider audience," Ciocca said. "But we never got as far as the film. I left on Aug. 4 ," Ciocca said. The internal Nestle memorandum indicates that the film was Lefever's idea.
On Sept. 1, 1980, Lefever circulated a reprint of the Nickel article with a cover letter soliciting membership in the center and enclosing a catalogue of other publications.
On Jan. 14, 1981, less than three weeks before Lefever arrived at the State Department, he wrote an article supporting the infant formula companies for The Wall Street Journal. The article identified him only as the president of a center that was studying the infant formula controversy.
On Jan. 26, a top Nestle executive in Switzerland, E.W. Saunders, mailed reprints of the article to delegates to the World Health Organization in an apparent effort to persaude them to adopt Nestle's position at their meeting in Geneva this week.
On March 10 The Wall Street Journal published an editorial note referring to Lefever's failure to inform the newspaper of his connection with the Nestle company.