An article yesterday incorrectly reported that Robert J. Brown is a member of the secretary of state's advisory committee on South Africa. Brown has testified before the panel but is not a member.
President Reagan is strongly inclined to nominate Robert J. Brown, a black North Carolina public relations executive, as U.S. ambassador to South Africa, U.S. officials said yesterday. But while Brown was endorsed warmly in circles ranging from the Rev. Jesse L. Jackson to Sen. Jesse Helms (R-N.C.), a potential cloud was cast over the nomination by reminders of a 1973 government contract awarded to Brown under circumstances that led to a Senate investigation.
Prior to the Senate inquiry in 1977, The Washington Post obtained internal Small Business Administration documents detailing Brown's involvement in the controversial contract. The documents revealed that Brown, who was paid $36,000 a year while serving as a special assistant to then-President Richard M. Nixon, nevertheless was designated an "economically and socially disadvantaged" person entitled to receive noncompetitive government contracts reserved for minority groups when he left the White House in 1973.
A firm in which Brown was a partner subsequently was awarded a one-year government contract for $866,651 to provide food and janitorial services at a California military base. However, the documents said, an SBA investigation indicated that Brown "seldom if ever had any participation" in the firm's activities and that the firm actually was run by a white businessman, who was paid $90,000 a year.
Brown was never accused of wrongdoing. But the revelations about his activities prompted Sen. Lawton Chiles (D-Fla.) to hold hearings about whether SBA programs intended to help struggling minority businesses were being used by white entrepreneurs, operating behind black and Hispanic front men in phony executive positions, to get access to federal contracts worth millions of dollars.
It was not clear yesterday whether Brown's involvement in the controversies besetting SBA minority programs during the 1970s will become a factor in Reagan's decision to name him to the sensitive ambassadorial post, which would require Senate confirmation.
U.S. officials, speaking yesterday before details of the SBA matter started to become public, said the president was leaning toward Brown for the Pretoria embassy post as a means of defusing domestic criticism of administration policy toward South Africa. The White House already has started Brown's security clearance process, the officials added.
Brown, who runs a public relations firm in High Point, N.C., could not be reached for comment but he told the Greensboro (N.C.) News and Record that it would be "inappropriate" for him to comment on the possible nomination. He noted that he will be in Washington today and Thursday and would "have some conversations" at the White House.
Brown, who has visited South Africa several times, is a member of the State Department's advisory commission on South Africa. A summary of testimony that he recently gave to the commission showed that he made a strong plea for greater U.S. efforts to increase educational opportunities for black South Africans.
But, in marked contrast to the calls by American civil rights leaders for U.S. firms to "disinvest," the summary said Brown argued that American companies should "stay in South Africa and assert their influence." The summary also quoted him as saying that "the threat of sanctions probably is better than sanctions themselves." Both arguments are in accord with Reagan's opposition to "disinvestment" and to applying economic sanctions against South Africa because of its racial policy of apartheid.
The first word of Brown's possible nomination to succeed Ambassador Herman Nickel was greeted with praise from all sides. Helms, an outspoken foe of a tougher line toward South Africa's white minority government, said: "I know Bob Brown and have known him for years. Certainly I would welcome a chance to support him."
Jackson, a harsh critic of administration policy, called Brown "a decent man with integrity and great ability" and said his appointment as ambassador could "be a step in the right direction." Atlanta Mayor Andrew Young, another prominent civil rights leader, said Brown has his "highest endorsement. In fact, he is probably the only person Jesse Helms and I could endorse."
One hint that the choice of Brown is not completely firm came from Secretary of State George P. Shultz who talked briefly with reporters after a meeting with Senate Majority Leader Robert J. Dole (R-Kan.). Asked about the prospect of Brown going to Pretoria, Shultz said, "It remains to be seen." He then referred to Ambassador Nickel, whose replacement has been described by other administration officials as "imminent," and said: "We have a very good present ambassador."
Brown's involvement with the SBA in the 1970s resulted from a Nixon administration decision to help minority-owned firms gain a foothold in government contracting by reserving some federal contracts, known under the law as 8(a) contracts, to be awarded to firms certified by the SBA as being under "disadvantaged" ownership.
The SBA documents showed that when Brown left the White House, he and another black, Harrison Cade, founded Cade Services Inc., with headquarters in Santa Ana, Calif., and applied for 8(a) assistance.
Although Brown reported to the SBA that his White House salary had been $36,000, Cade Services was approved as a "disadvantaged" firm and, in June 1973, was awarded the service contract at El Toro Marine Air Station in Santa Ana.
In his application to the SBA, Brown listed himself as the firm's secretary-treasurer. SBA officials soon questioned why Cade Services was paying $90,000 a year to an El Paso, Tex., firm run by Happy Franklin, a white businessman.
An investigation by the SBA's Los Angeles office, completed on Dec. 5, 1973, found that Cade had no idea how the business functioned ("Mr. Cade simply does not comprehend what the numbers on a financial statement mean"), that Brown, despite his title and job description "seldom if ever had any participation" in Cade's activities and that the firm actually was being run by Happy Franklin.
In a 1977 telephone interview, Franklin told The Post that he had become involved at the request of SBA officials who wanted Brown to get the contract.
Franklin also recalled that he went with Brown to the SBA's San Francisco office "when SBA officials tore up his original 8(a) application and showed him, literally line by line, how he should redo it to make out a case that he was disadvantaged."
Staff writer Edward Walsh contributed to this report.