Thomas C. Reed, under scrutiny by a federal grand jury and a congressional committee for a 1981 stock deal, said yesterday he would leave his White House consultant's job after President Reagan's Commission on Strategic Forces issues its recommendations for MX basing in mid-April.
Reed, who is serving as deputy national security assistant to the president, said he had planned to leave when the MX report was completed but was announcing it now because he didn't want the MX basing decision to be affected. Reed said he had consulted with national security affairs adviser William P. Clark, who is a close friend, before announcing his decision.
"Some of those who are causing the furor are concerned about the future, and it seemed important to me to make clear to them that under no conceivable circumstances would I accept a full-time appointment," Reed said in a telephone interview from California.
However, he said he expected to serve out his second term, expiring in 1985, on the Defense Science Board, a Pentagon brain trust involved in a wide range of defense and weapons technology issues.
As recently as January, when Reed became vice chairman and chief organizer for the MX commission, it was widely speculated that he might succeed Clark as national security adviser.
White House officials made clear yesterday that they don't expect Reed to take any new job in the administration. Spokesman Larry Speakes, who has tried to put distance between Reed and the president for the past few days, said Reed was simply an "honorary" presidential assistant and would soon be a "former honorary presidential assistant."
But Reed, in fact, has been close to Reagan since 1967. He served as Reagan's first gubernatorial appointments secretary in California and ran his 1970 reelection campaign. Although some Reagan aides ostracized Reed after he backed Gerald R. Ford for president in 1976, both Reagan and Clark are known to think highly of him.
Clark agreed yesterday that it was desirable for Reed to announce his departure from the White House. "The plan had always been for Tom to return to California after the President's Commission on Strategic Forces reported," Clark said.
"I believe the United States needs a strategic weapons system," Reed said yesterday. "Ronald Reagan and Bill Clark are friends of mine, and I will stay as long as they want me to, and they can pay me or not, as they chose."
Reed was responding to a report by Richard C. Morris, special assistant to Clark, that he had exceeded the 120 days allowed as a paid consultant detailed to the NSC from the Defense Science Board. Morris said Reed had worked free since January and said that the NSC had a legal opinion saying this was permissible because the executive office of the president is allowed to receive gifts, in this case Reed's time.
Yesterday, Rep. John D. Dingell (D-Mich.), whose House subcommittee on Securities and Exchange Commission oversight is investigating the Reed appointment, said the FBI had made "inadequate inquiry" into Reed's background.
Reed netted $427,000 from a single 1981 stock options investment of $3,125 in Amax Corp. The windfall followed an Amax announcement of merger discussions with Standard Oil Co. of California that sent Amax stock soaring.
The NSC asked for an FBI report on Reed on Jan. 29, 1982, three weeks after he went to work there. Morris did not become security officer of the NSC, with responsibility for the investigation, until March, and the FBI report was not returned until May 11.
"There was no mention in the FBI files of Mr. Reed's admission that he had signed other people's names or backdated documents," Dingell said.
Dingell, to whom Morris showed the FBI file yesterday, said it referred to a criminal investigation of Reed by the San Francisco U.S. attorney's office that was "discontinued" in June, 1981. However, the current U.S. attorney there, Joseph P. Russoniello, said this week that "no determination was made on the merits of the case" and it was referred to the U.S. attorney's office in New York City.
In the interview yesterday, Reed said he had bought the stock options "like a lottery ticket" and given them to friends. When the stock increased, he said he didn't want to risk the profits of those who had benefited by his purchase. Unable to locate two college-age children of a former secretary, Reed said he simply signed their names to the documents.
"I dated them the day I bought the options because the forms were supposed to be in when I opened the accounts," said Reed, who added that the SEC had not seemed particularly concerned about this. The backdating and signing of other person's names was cited in an SEC staff report but not mentioned in the public complaint against Reed.
Dingell and others have focused on the allegation that Reed had inside information. Morris, who concluded there was no evidence to support this, acknowledged in a Jan. 11, 1983, letter that "the charges were dismissed notwithstanding the rather damning circumstantial evidence."
"It is highly doubtful that an ordinary citizen would have gotten a job with a federal agency with a record of insider trading," Dingell said yesterday.
Reed said, "I did not have any inside information and I did not profit from inside information."
Reed agreed in a written order signed by him and the SEC that he would be "acutely aware of the statutory provisions" against the use of inside information in the future. He also agreed to put in escrow the $427,000 for paying investors who have claimed in lawsuits they were harmed by circulation of inside information. If the lawsuits are unsuccessful, the money must be given to charity.
Yesterday, Reed said he expected to win the lawsuits and give most of the money to Cornell University. He said he had agreed to the SEC order because he wanted to "end the ongoing legal expense."