President Reagan's special envoy to the Middle East, Philip C. Habib, is a paid consultant for the Bechtel Group Inc., a construction firm that has major business interests with Arab countries.
A Bechtel spokesman in San Francisco confirmed that Habib was hired as a consultant last year by George P. Shultz, who headed Bechtel at the time and is now secretary of state.
After Shultz was nominated this month as Reagan's chief of foreign policy, new concerns were raised on Capitol Hill and among supporters of Israel about Bechtel's potential influence in the administration.
Sen. Larry Pressler (R-S.D.), a Foreign Relations Committee member who questioned the Shultz-Bechtel connection, yesterday called it "a very, very serious matter if Habib is on the Bechtel payroll.
"He will lose all his credibility in the Mideast and I think it is going to impair the effectiveness of Secretary Shultz."
Pressler added, "Shultz should take immediate steps to make public everything there is about this. There are too many people from Bechtel in this administration....Bechtel is viewed as being extremely pro-Arab. These international conglomerates have too much power, and Bechtel is a classic example."
Although Habib has been in the news almost constantly since Reagan sent him on the first of a series of diplomatic missions to the war-torn Mideast early in 1981, his association with Bechtel has not been publicized.
Company public relations aide Tom Flynn said Bechtel would not disclose the nature of Habib's work there or his salary. "But I will say that it's something you and I would consider very minimal," Flynn added.
He said Bechtel has had almost no contact with Habib since he left for the Mideast in June on his latest effort to resolve the Lebanese crisis. Reagan dispatched Habib on another tour of Mideast capitals last Thursday in the ongoing drive to negotiate withdrawal of Palestinian guerrillas from West Beirut.
Concerns were heard when another Bechtel executive, Caspar W. Weinberger, a sometime critic of Israel, became Reagan's secretary of defense. Still another former Bechtel executive, W. Kenneth Davis, is Reagan's deputy secretary of energy.
Saudi Arabia and other Arab nations have been longtime customers of the family-owned Bechtel Group, one of the world's largest construction and engineering firms. In 1976, the Justice Department accused Bechtel of illegally cooperating with an Arab blacklisting of companies doing business with Israel. The case was settled by consent decree.
Presidential press assistant Anson Franklin said yesterday that the White House would have no comment on the disclosure that Habib is employed by Bechtel at the same time that he is representing the United States diplomatically.
"I don't think we'll have any comment on that," Franklin said. "Mr. Habib is working for the president in the Middle East and he's doing a great job."
Habib, a retired career diplomat, was pressed into service as Reagan's personal emissary to the region shortly after the administration took office in January, 1981. One result of his travels last year was a cease-fire between Israel and Syria in southern Lebanon.
Habib's success in negotiating the 1981 cease-fire drew high praise from Reagan and others. The president gave him an autographed portrait, signed with "great appreciation." Shultz, at his Senate confirmation hearing this month, described Habib as "a real hero" for his role as a Mideast mediator.
Habib continued in his special-envoy role through the winter and spring, working to keep warring forces apart. In April, as Habib traveled in the area, Israeli Defense Minister Ariel Sharon complained that he was attempting to tie Israel's hands.
Last month, after Israel invaded Lebanon and laid siege to the Palestine Liberation Organization, Reagan sent Habib back. This mission has resulted in an on-again, off-again cease-fire and continuing negotiations.
A State Department press officer said yesterday that Habib, who rose to State's No. 3 position, undersecretary for political affairs, and then retired in 1978 because of poor health, is being paid per diem as presidential envoy.