Attorney General Edwin Meese III failed to comply with federal ethics regulations when he did not disclose securities held and traded in his partnership with a former official of Wedtech Corp., the General Accounting Office reported yesterday.
The GAO concluded that Meese's investment partnership with San Francisco businessman W. Franklyn Chinn did not qualify as a "blind" trust under federal ethics regulations.
Therefore, the congressional investigative agency said, Meese was required to provide details on his annual financial-disclosure statement of partnership assets worth more than $1,000, sales or purchases exceeding $1,000 and income of more than $100.
Meese said last month that he and his wife profited by more than $35,000 on a $60,000 investment in the so-called "limited blind partnership" with Financial Management International, owned by Chinn.
The GAO report to Rep. Gerry Sikorski (D-Minn.) is to be discussed before a House Post Office and Civil Service subcommittee today. It buttresses similar conclusions by the Office of Government Ethics (OGE) about Meese's investment partnership.
The GAO report also criticized the Justice Department and the OGE for failing to scrutinize Meese's 1985 financial disclosure.
Although Justice Department officials discussed the partnership with Meese, "they excused disclosure of underlying assets on the basis of Mr. Meese's characterization of the partnership as 'blind,' even though it did not meet the requirement in the Ethics Act for a statutorily exempt trust," the report said.
OGE officials "did not question the partnership until it was called to their attention by the media," the report said.
The report "confirms that where there's smoke there's fire," Sikorski said. He said it points out that "the chief law enforcement officer in the country is out of compliance with the ethics laws on disclosure . . . . The public has a right to know that high officials are not involved in activities that would benefit their financial interests as opposed to the public interest."
Justice Department spokesman Patrick S. Korten said Sikorski is engaging in a "crass political attack" and criticized the report for describing "the requirements in this area as if they were clearly black and white. The truth of the matter is there are many shades of gray" in terms of what financial details must be disclosed.