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Ex-Defense Aide Admits Lying in SEC Stock Probe

March 04, 1985|United Press International

WASHINGTON — Former Deputy Defense Secretary Paul Thayer and Dallas stockbroker Billy Bob Harris pleaded guilty today in federal court to charges of giving false testimony and obstructing justice.

U.S. District Judge Charles Richey accepted their pleas and set sentencing for April 18.

Assistant U.S. Atty. Charles Roistacher told the judge that he will recommend a small prison term for both men on the charges that each carry up to five years imprisonment and a fine of $5,000.

'Insider' Information

Thayer was accused of passing "insider" information to his friend Harris while Thayer held a number of high corporate positions prior to his Pentagon job. Thayer was chairman of the board of directors and the chief executive officer of the LTV Corp. in Dallas and a member of the boards of Anheuser-Busch Co. of St. Louis and the Allied Corp. of Morristown, N.J.

During the summer of 1982, the charges say, Thayer passed information concerning the prospective acquisition by Busch of Campbell-Taggart Inc., and in September he passed information about Allied's possible merger with Bendix Corp.

Harris bought large quantities of Campbell-Taggart and Bendix stock for himself and several of their friends.

The charges, formally contained in an "information" that was sent to the judge without a grand jury, say that Thayer "improperly disclosed" information on potential stock deals both to Harris and to Sandra Ryno, with whom, the charges say, Thayer "maintained a private personal relationship."

The tips given by Thayer permitted Harris, Ryno and others to sell stock on Sept. 27, 1982, "realizing profits well in excess of $1 million," the charges say.

Thayer, 65, served as the deputy defense chief for one year, resigning Jan. 12, 1984, because of the pending legal action. As deputy chief, he was in charge of the day-to-day business of the Pentagon.

Sworn Testimony

The Securities and Exchange Commission began investigating in February, 1983. During the investigation Thayer, while he was deputy secretary of defense, and Harris gave sworn testimony.

It was during this testimony that both men obstructed the SEC's investigation by giving false testimony for the purpose of concealing and causing to be concealed from the SEC the true sources and nature of information, the information said.

The SEC filed a civil suit against Thayer, Harris and others in January, 1984--about the time Thayer resigned--alleging that insider trading had occurred. That civil suit is pending in Texas.

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