Executives of a major American tobacco company testified yesterday that they urgently sought out Michael K. Deaver to lobby the South Korean government because they feared former national security adviser Richard V. Allen, representing a rival company, had ruined their chances of selling cigarettes in that country.
Richard Synder, an executive vice president of Philip Morris International Inc., the overseas marketing arm of the tobacco giant, said the firm had hired Deaver after being told that Allen "was incorrectly describing our company as a Democratic company, whereas his company, R.J. Reynolds Tobacco Co., was a Republican company."
Lawyers for Deaver, the former White House deputy chief of staff accused of lying to a congressional subcommittee and a federal grand jury, later suggested in questions that Allen was also responsible for both the congressional inquiry into Deaver's activities and news stories critical of Deaver's lobbying.
Allen served as Reagan's first national security adviser for about a year, until resigning during a controversy over a gift he accepted from Japanese businessmen.
Randall J. Turk, one of Deaver's lawyers, said Deaver urged Reagan to force Allen out of the administration and suggested that Allen may have retaliated by raising questions about Deaver's lobbying activities after he left the White House.
Turk implied that Allen planted the questions with members of a House subcommittee headed by Rep. John D. Dingell (D-Mich.) and with New York Times columnist William Safire, a longtime friend.
Allen, who represented R.J. Reynolds in its bid to enter the South Korean market, said in a telephone interview yesterday that the charges are "preposterous."
He denied that he had attempted to brand Philip Morris a Democratic company. "Trade matters are not resolved on a partisan basis," he said, adding that companies are not usually known overseas by political affiliations.
He said he had been among "several hundred" people questioned by Dingell's staff and the staff of the special prosecutor who sought Deaver's indictment on five counts of perjury.
"As for Mr. Deaver and his family, I have nothing but sympathy for them in their current situation," Allen said. He said he had not supplied information "to anyone" about Deaver's lobbying because "I know nothing of Mr. Deaver's business dealings."
Allen's alleged role emerged as a key element in the case against Deaver during the fifth day of testimony in the trial. The 49-year-old Deaver, a longtime confidant to President and Nancy Reagan, was back in court today after being hospitalized over the weekend for an attack of kidney stones. He said during a break that he was feeling well.
In yesterday's testimony, the health of the former presidential aide once again became a focus as a former associate described Deaver's dramatic revelation to his staff that he had a serious drinking problem.
Pamela G. Bailey, the associate from the lobbying firm and a former White House colleague, said Deaver assembled his staff in his Georgetown office in November 1986 after he had spent a month at an alcoholic treatment facility.
" 'You have a right to know where I have been,' " Bailey quoted him as saying. " 'I'm an alcoholic.' "
That admission, she said, helped explain Deaver's moodiness, forgetfulness, and his sometimes erratic behavior. "Oh, it all makes sense," Bailey recalled saying after Deaver's statement.
Bailey, who was a prosecution witness, may have helped Deaver's case by her recitation of the advice her boss gave the staff before testifying. "He told us, 'Everything will be all right. Tell the truth.' And I remember him telling us, 'It's probably the most serious thing you've ever done in your life.' "
Never, she said under repeated questioning from Turk, was there any suggestion from Deaver that the staff should lie or attempt to conceal anything from the investigators. Deaver was convinced he had done nothing wrong and initially was confident that an impartial investigation by lawyers would vindicate him.
The Philip Morris executives said it was Allen's alleged description of their company as being Democratic and his seemingly high status among Koreans that made them worry they would be shut out of the South Korean market. Duck-Young Song, a marketing official in the company's Hong Kong office, suggested Deaver and the company later agreed to a one-year $250,000 contract with him.
What they got with that was Deaver's red-carpet treatment on a 1985 visit to South Korea in which he was accorded treatment "usually reserved for high-ranking foreign dignitaries," according to a company memo introduced at the trial. Deaver was furnished a government Mercedes-Benz, given a 75-minute session with South Korean President Chun Doo-Hwan, and a four- to five-hour session with key trade officials. So impressed were the tobacco executives that Song wrote in a memo on the trip: "He can outdo Richard Allen."
The tobacco executives said they were delighted with Deaver's work for them in Korea and stressed, under cross-examination, that they had asked him to do nothing for them in the United States.