The month before he disqualified himself from a Justice Department probe of alleged corruption by the Wedtech Corp., Attorney General Edwin Meese III testified before a grand jury focusing on that firm, an appearance that was revealed yesterday as Meese testified for a second time before the same grand jury.
The original Meese appearance before the grand jury, probing charges of influence-buying and corruption by the Bronx-based defense contractor, took place in March and was not revealed to department officials until yesterday, sources said.
On April 9, after his first testimony, Meese removed himself from participating in Justice Department activities on the case, telling aides he expected to be called as a witness. What department aides did not know then was that Meese had already testified to the grand jury.
Meese declined to comment on his testimony. His lawyer, Nathan Lewin, said later that Meese "answered all the questions asked him," and added, "Since grand jury proceedings are secret under federal law, it would not be appropriate to specify the subjects of Mr. Meese's testimony."
Lewin revealed that yesterday's appearance was Meese's second before the grand jury that is hearing evidence from independent counsel James C. McKay.
Meese disqualified himself from participation in a Justice Department investigation of Wedtech on April 8. Justice Department sources said then that Meese decided to recuse himself because of a concern that he might become involved in the Wedtech case as a witness. In fact, he already had, but had not told others in the department that fact.
McKay was appointed Feb. 2 to investigate the lobbying activities of former White House aide Lyn Nofziger, including his role in helping obtain federal contracts for Wedtech, a contractor at the center of influence-buying charges. On May 11, McKay's jurisdiction was officially expanded to include Meese's activities. The scope of the overall investigation has also grown to include actions by Nofziger, Meese and others on behalf of Fairchild Industries Inc.
Carol Bruce, a former prosecutor in the U.S. attorney's office here, was hired by McKay to handle the Meese aspects of the probe. Both she and McKay were present yesterday when Meese testified before the grand jury.
One source said that Meese's testimony yesterday was largely related to Fairchild. Sources have said that lobbyists for the company, including Nofziger, contacted the White House in 1982 to urge that defense contracts for the company's A10 aircraft be extended. McKay's office declined to comment on the areas of questioning.
Meese acknowledged at an April news conference that in 1981 and 1982, when he was at the White House as counselor to the president, he received a series of memoranda from longtime friend E. Robert Wallach asking that he look into the Army's resistance to efforts by Wedtech to obtain a no-bid $32 million small-engine contract.
Meese said he asked for a White House review of the matter, but he added that it was a routine occurrence at the White House for him to seek a review of companies' complaints.
Wedtech was awarded the Army contract by the Small Business Administration under its minority set-aside program in August 1982. The award followed a May meeting at the White House chaired by James Jenkins, who was Meese's deputy at the time. Jenkins left the White House in 1984, became a Wedtech consultant in 1985 and was placed in charge of the company's Washington office in 1986.
Wallach, a San Francisco lawyer who also testified before the grand jury in March, has said he received $1 million from Wedtech in retainers and stock profits from 1983 through 1986.
Nofziger, who worked for Wedtech after he left the White House in February 1982, also received retainers, as well as stock worth about $700,000.
In the spring of 1985, Wallach brought two friends, San Francisco businessmen W. Franklyn Chinn and R. Kent London, to Wedtech as consultants. About the same time, Wallach introduced Chinn to Meese, who was about to be sworn in as attorney general.
Meese recently acknowledged that in May 1985, at Wallach's recommendation, he invested about $60,000 in a blind trust operated by Chinn. Meese has said he was aware at that time of Chinn's association with Wedtech. Later that year, Chinn was named to the Wedtech board of directors.
Wallach has denied that any of Meese's money was invested in Wedtech, and Meese said last month he would terminate his financial arrangement with Chinn, effective June 30.
Wedtech, which is being reorganized under federal bankruptcy laws, is the focus of federal, state and local criminal investigations of allegations the company bribed as many as 20 officials as part of an influence-peddling scheme. Four Wedtech executives pleaded guilty earlier this year to charges they participated in a bribery scheme to help obtain government contracts.