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Nofziger Faces Inquiry on Lobbying : Former Reagan Aide Allegedly Intervened to Help Get Contract

November 05, 1986|ROBERT L. JACKSON | Times Staff Writer

WASHINGTON — Lyn Nofziger, a Washington public relations executive and former top political aide to President Reagan, is under federal scrutiny for allegedly lobbying his former White House colleagues in violation of conflict-of-interest laws, government officials said Tuesday.

The investigation, being conducted by U.S. Atty. Rudolph W. Giuliani of New York, centers on allegations that Nofziger, who left the White House in January, 1982, intervened at the White House four months later to help obtain a $31-million Army engine contract for Wedtech Corp. of New York. Nofziger allegedly received stock from Wedtech valued at several hundred thousand dollars, authorities said.

The Nofziger inquiry, according to sources familiar with the case, is similar to a continuing investigation involving former presidential aide Michael K. Deaver that is being conducted by a court-appointed independent counsel. Under the law involved in both cases, the 1978 Ethics in Government Act, a former high government official may not approach his old agency for a one-year period with the intent of influencing officials on behalf of a client.

Lifetime Prohibition

Federal law contains a lifetime prohibition on intervention in matters on which a former official had participated "personally and substantially" while in government.

One of the sources, all of whom declined to be identified, said that the Nofziger matter "is a classic case for a special prosecutor to look into," even though Giuliani has been investigating the matter. Under the law, the U.S. attorney may spend up to 90 days examining the allegations before Justice Department officials decide whether to refer them to an independent counsel.

Nofziger, in the wake of newspaper reports about the investigation, said Tuesday in a statement that he would have no comment on the advice of counsel. He was quoted by the New York Times on Tuesday as acknowledging that he had written a letter in May, 1982, to the then-deputy White House counselor, James E. Jenkins, asking help in getting a minority business contract for Wedtech, which was founded by John Mariotta, who is Latino.

The Army was seeking a manufacturer of small engines that have a variety of military uses, and federal law allows minority-owned firms to receive such contracts without submitting competitive bids.

Letter of Intent

Nofziger's letter referred to a meeting the previous week of company executives and Army and White House officials at which a pitch was made for the relatively small contract, the New York Times reported. The letter reportedly said that the firm was facing a deadline in applying for a "federal urban development action grant" and needed a letter of intent from the Army.

The Nofziger letter told Jenkins that "your assistance in securing an appropriate letter of intent in a timely manner will be greatly appreciated," the newspaper said. Jenkins, who has since left the White House, could not be reached for comment Tuesday.

It was not known whether Wedtech received the letter of intent, but it later did get the contract.

An authority on federal ethics, who declined use of his name, said that Nofziger's request could constitute a conflict-of-interest violation "if the intent was to influence a government official."

Received 22,500 Shares

Investigative sources said that Nofziger and his business partner, Mark A. Bragg, each received 22,500 shares of stock from Wedtech in 1983. They said that Wedtech made a practice of transferring similar stock packages to politically well-connected law firms and lawyers who helped the fledgling company progress in business. The firm has received more than $250 million since 1982 in defense-related contracts through the U.S. Small Business Administration.

There were no apparent violations of federal securities laws involved in these stock transfers, authorities said. Giuliani declined comment on the investigation Tuesday. Officials of Wedtech referred inquiries to its attorney, who did not return phone calls.

Like Deaver, Nofziger's association with Reagan dates back 20 years to the President's days as California governor. At the White House, he was Reagan's first political director and later served as a consultant in the President's 1984 reelection campaign.

Deaver Inquiry

Deaver has been under investigation since May by independent counsel Whitney North Seymour Jr. for possible violations of federal conflict-of-interest and perjury statutes. A Washington consultant, Deaver allegedly contacted White House officials on behalf of foreign and domestic clients less than one year after leaving his job as deputy White House chief of staff in 1985.

Deaver also was accused by a House investigating subcommittee of lying in testimony about his lobbying activities. Seymour has not indicated when his inquiry will conclude.

Conflict-of-interest violations carry a maximum punishment of two years imprisonment. Perjury is punishable by up to five years in prison.

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