Attorney General Edwin Meese III failed to list his partnership with a former official of the Wedtech Corp. in a 1985 list of possible conflicts of interest he sent to subordinates the day after he made the investment, Sen. Carl Levin (D-Mich.) disclosed yesterday.
Levin said he was "very disturbed" by Meese's handling of the matter and by "the casual, almost negligent approach of the Office of Government Ethics" to Meese's lapses.
Justice Department spokesman Patrick Korten denied any lapses on Meese's part. "What Carl Levin is doing is making a very enormous political mountain out of a very small anthill," Korten declared.
The attorney general invested about $60,000 in a "limited blind partnership" with San Francisco businessman W. Franklyn Chinn on May 23, 1985, less than a month after Chinn had become a consultant for Wedtech, then a fast-growing defense contractor based in the Bronx.
On May 24, 1985, Meese issued a memo to senior Justice Department officials, setting forth "my policy with respect to avoiding any conflicts of interest during my tenure as attorney general."
Meese told the subordinates he was attaching a list of "the entities in which Mrs. Meese or I have a financial interest" so they would be able to identify matters "from which I may be disqualified."
He also attached a second list setting out stocks and bonds of 28 corporations that he and his wife had just sold so that aides would know he was "no longer disqualified" from matters involving those companies.
Meese aides have said that he took the $60,000 from the sales, all of which took place on May 23 and May 24, 1985, to enter into his "limited blind partnership" with Chinn's company, Financial Management International Inc.
The May 23 partnership with Chinn, however, was omitted from the first list of entities in which Meese said he and his wife still had a financial interest.
In short, Levin complained, "while Mr. Meese included in his recusal agreement everything he sold up to and including May 24, he did not include the Chinn partnership interest, which he purchased on May 23."
Meese's lawyer, Nathan Lewin, said the list of holdings Meese drew up "was designed to deal with publicly held companies, banks or entities" in which the Meeses held stock. He said Meese's partnership with Chinn "just didn't fit into that list . . . . There was no deliberate attempt to conceal."
Levin, who is chairman of the Senate subcommittee that oversees the Ethics in Government Act, said he has scheduled a hearing next Thursday to pursue the matter. Meese and ethics office director David H. Martin will be invited to testify.
Korten said he did not know if Meese ever revised the list but said "it simply doesn't matter." He said Meese pledged in the 1985 memo to "disqualify myself from participation in any matter in which I have a financial interest." Korten said this covered Financial Management, whether listed or not.
"The fact is," Korten added, "that nothing involving Financial Management was ever presented to the attorney general for his decision."
Meese is already under investigation in the Wedtech case because of his failure to disqualify himself until last April from all federal investigations of the defense contractor. He recused himself shortly after acknowledging that he had intervened on Wedtech's behalf in 1982, when Meese was White House counselor and the company was seeking a $32 million, no-bid military contract.
Levin said a hearing is needed "because of the cloud" over Meese's actions and because of the ethics office's failure to insist on disclosure of Chinn's investments for Meese. Martin said recently that the partnership did not comply with the rules for qualified blind trusts.