WASHINGTON — An independent counsel launched a criminal investigation today of Atty. Gen. Edwin Meese III's involvement with scandal-plagued Wedtech Corp. and Meese said he would sever business ties with his investment manager, who sat on Wedtech's board of directors.
Meese became the first federal official to become the subject of two independent counsels' investigations. In the first investigation, involving whether Meese had rewarded friends with government jobs in exchange for financial favors, an independent counsel found Meese had not violated any laws.
Meese, who acknowledged last month that he interceded in support of efforts by Wedtech, a South Bronx defense contractor, to get a $32-million Army contract when he was White House counselor in May, 1982, asked this morning that an independent counsel conduct a criminal investigation.
Three hours later, Deputy Atty. Gen. Arnold Burns, one of Meese's subordinates, asked independent counsel James C. McKay to conduct the inquiry because "public confidence in the administration of justice will be better served" by an investigation conducted outside the Justice Department.
Will Widen Inquiry
McKay then issued a statement saying "the investigation of the matters concerning Mr. Meese will commence immediately."
McKay since Feb. 2 has been investigating former White House aide Lyn Nofziger's lobbying efforts on behalf of Wedtech and now will expand the scope of his work to determine whether the attorney general violated federal conflict-of-interest provisions or other laws.
The attorney general disclosed today that he hired a Washington attorney, Nathan Lewin, last Friday to represent him in any criminal investigation of his ties to Wedtech.
McKay agreed with Burns that the investigation should include Meese's dealings with his investment manager, W. Franklyn Chinn, Nofziger and E. Robert Wallach, a longtime associate who introduced Meese to Chinn in 1985 and who wrote Meese a series of memos in 1981 and 1982 on behalf of Wedtech. Nofziger and Wallach both received Wedtech stock.
Meese wants McKay to look into the Wedtech matter in order to "allay any and all concerns" regarding the attorney general's conduct, said Terry Eastland, a Justice Department spokesman.
"The attorney general desires that this matter be resolved as promptly as possible, and in a forum that will prevent partisan political exploitation," Eastland said. Chairmen of three congressional committees or subcommittees have either launched inquiries into Wedtech and Meese or have written letters questioning the attorney general's activities.
Will End Partnership
In addition, Meese disclosed that he asked Chinn in a letter last week to terminate a financial partnership in which the attorney general invested $60,000 two years ago. A month ago, it was disclosed that Chinn had sat on Wedtech's board from 1985 until February.
Meese is pulling his money out of the partnership because "to the degree that people have raised questions about it . . . (the attorney general's) relationship with Mr. Chinn, he wants to end that," Eastland told reporters.
"In case anybody asks me what's he going to do with his money now, I just simply don't know," Eastland said.
Under the terms of the "blind" partnership, Meese does not know if Chinn invested any of his money in Wedtech and the money cannot be pulled out until June 30.
In an interview, Lewin said that "when I do get an answer" on whether Meese's money was invested in Wedtech, he will discuss with his client whether to "make some public disclosure."