Transcript of the statement by Attorney General Edwin Meese III yesterday:

As you know, an independent counsel has been engaged since May in an investigation of certain matters insofar as they relate to me, in connection with the Wedtech Corp. and E. Robert Wallach.

I have cooperated fully with this investigation, testified before a grand jury, produced thousands of pages of documents and answered every question asked by the independent counsel.

I am convinced that a thorough inquiry conducted in any professional manner with evidence presented to the independent counsel and testimony given under oath before a grand jury will inevitably result in a conclusion favorable to me.

I have intentionally declined to answer publicly allegations that have surfaced in the news media and elsewhere because I feel strongly that the proper way to deal with questions of this kind is by the system established under law; that is, an impartial inquiry using the investigating authority of the grand jury and a calm, dispassionate evaluation of the evidence and the law.

In last December, independent counsel {James C.} McKay announced that he had effectively concluded the Wedtech phase of his investigation with a favorable result.

I was gratified by that decision because it confirms and vindicates my firm belief that the legal process, in the hands of honest and dedicated professionals, can withstand the daily buffeting of media sensationalism.

The independent counsel announced at that time that there were a limited number of other matters that still had to be investigated to cover the full scope of the jurisdiction assigned to him by the court of appeals.

My attorneys and I have cooperated fully in these other areas as well, and I had hoped, until this past Friday, that these remaining areas of concern would similarly be resolved on their merits within the established legal process.

Since Friday, however, there has been such a cascade of misinformation, false headlines, half-truths, innuendo and misunderstanding of the law that I feel compelled, for this one time, to make a public statement on the reports concerning the Aqaba pipeline project.

My role in this matter was extremely limited. I did not initiate or promote this particular project. Nor did I divert its consideration from the appropriate decision-makers in the executive branch.

In fact, my actions consisted principally of referring Mr. Wallach, who spoke to me in his capacity as attorney for Mr. {Bruce} Rappaport, to the National Security Council staff, and particularly to Mr. {Robert C.} McFarlane, since they were the appropriate government officials to consider this matter.

My first contact with the project occurred long after negotiations had begun and, as I have since learned, months after the prime minister of Israel had provided an initial assurance that there would be no unprovoked aggression against the pipeline.

When Mr. Wallach sought my advice in May of 1985, I referred him to Mr. McFarlane, and consideration of the project thereafter on behalf of the United States was handled, as it should have been, by the National Security Council staff.

There have been news reports of alleged communications between me and an official of the Israeli government. There were only two contacts, both of which occurred in the fall of 1985. Each was brief and limited, and neither was initiated by me.

I can't go into detail regarding these contacts because of current security classifications, but I can say that at no time was there any discussion, hint or implication of a payment to any official or political party.

Press accounts have concentrated on a memorandum sent to me by Mr. Wallach in which it is alleged a so-called payoff to an Israeli official, or to his political party, was described. Again, the memorandum is classified, and I cannot therefore describe it in detail.

But I can tell you that the language in Mr. Wallach's memorandum that has given rise to this speculation consists of 10 words in one of two long documents that he provided to me on the same day, to fill me in on what had transpired in the pipeline matter.

Mr. Wallach was in habit of giving me lengthy memoranda on many subjects. I rarely had time to read them thoroughly, particularly when they dealt, as these two did, with subjects outside my responsibilities as attorney general.

I do not recall having read the specific words that have now mushroomed into importance, but I certainly did not receive from the memorandum any impression of illegality whatsoever.

Indeed, as I look at the full memorandum containing those 10 words today, I do not believe that it fairly implies that a violation of law was committed or contemplated in connection with the pipeline. It contains no reference to bribes or payoffs.

There were simply no grounds in the memorandum for questioning the legality of the project. In fact, the memorandum itself was produced many months ago by my office, in response to the independent counsel's request for all documents pertaining to Mr. Wallach.

In October of 1985, the Justice Department was asked by the Overseas Private Investment Corp. for a legal opinion. That request was considered by the Office of Legal Counsel, where it had been properly referred.

That was the sum and substance of my limited involvement with the Aqaba pipeline project. I had no personal or financial stake in it. I responded to inquiries regarding it by referring the matter to the National Security Council staff, where it belonged.

I regret that independent counsel McKay's investigation has been disrupted by the improper leak of classified information, reportedly from government sources.

Whoever is responsible for the leak has not only violated the law but has subverted a process that is designed to find the truth while protecting the innocent against false charges.

In addition, the reason why an independent counsel is appointed in these cases is to insulate the process from political or external pressures and to permit the government official whose conduct is being examined to continue with effective service to the nation while the truth behind any questions is determined.

I remain fully confident that, on a fair evaluation of the facts in the law, the independent counsel and his staff will conclude that my limited contact with the Aqaba pipeline project was entirely lawful, proper and responsible.

Now for the reason I've stated earlier, because of the independent counsel inquiry, I cannot publicly discuss these matters in any further detail than I have given today. However, when the inquiry is completed, I plan to answer all questions that may be raised.

I appreciate your understanding of why I cannot take questions today.