WASHINGTON — E. Robert Wallach, a former consultant to scandal-plagued Wedtech Corp. and a close friend of Atty. Gen. Edwin Meese III, boasted about influence with the Reagan Administration in memos to Wedtech officers that were made public Tuesday.
Wallach's internal memoranda were disclosed by the Senate Governmental Affairs subcommittee on oversight of government management in connection with an inquiry into how the small Bronx, N.Y., firm was able to obtain large U.S. defense contracts before winding up in bankruptcy last December.
16 Face Charges
So far, at least 16 people associated with Wedtech have been charged with bribery or conspiracy, including four who have pleaded guilty. Wallach, who has denied any wrongdoing, is known to be under scrutiny by a court-appointed independent counsel here who already has obtained indictments against former presidential adviser Lyn Nofziger and an associate, Mark A. Bragg, in the Wedtech scandal.
Subcommittee Chairman Carl Levin (D-Mich.) said that Wallach supplied the memos in connection with the panel's examination of a $134-million Navy pontoon contract obtained by Wedtech without competitive bidding in 1984 under the Small Business Administration's minority enterprise program. Wallach received $1.3 million in stock and legal fees from Wedtech from 1982 to 1985.
The memos do not suggest any criminal violations by Wallach or others. But they provide detailed behind-the-scenes insights into the San Francisco lawyer's key role as a high-powered lobbyist and political strategist for Wedtech. Moreover, the memos show that Wallach displayed a kind of brashness conspicuous even in the Washington corporate-political sphere as he touted his valuable connections to the fledgling defense contractor.
In one memo, for example, Wallach--a former law school classmate of Meese--reminded Wedtech executives that he was personally representing Meese at his Senate confirmation hearings in 1984 while also lobbying on Wedtech's behalf. Meese, then White House counselor, was undergoing months of hearings and an investigation of his financial affairs by a court-appointed special counsel in connection with his nomination as attorney general.
Meese and his wife, Ursula, invested $55,000 in a trust fund the next year with W. Franklyn Chinn, a Wedtech director who was a friend of Wallach. Meese withdrew his investment from Chinn's control last June after learning that the businessman was under criminal investigation in the Wedtech case.
In a memo dated March 2, 1984, Wallach told Wedtech executives that they and Meese were "my two major East Coast clients." In referring to the Navy contract, then about to be signed, Wallach continued: "I see much more than our victory . . . . I see a whole new attitude and philosophy for the company emerging.
"As with Ed, our only refrain during the course of his excellent performance during yesterday's hearing was to urge him: 'Don't get cocky--stay humble.' The same advice applies to us (Wedtech)."
In a memo to Meese in October, 1984, a copy of which was sent to Wedtech, Wallach suggested that President Reagan "make an appropriate campaign stop" at Wedtech's plant in the economically depressed South Bronx, as he later did, and furnished Meese the personal phone number of Mario Moreno, then the firm's executive vice president. Meese was still a White House adviser at the time.
A month later, according to the documents, Wallach advised Wedtech representatives to suggest that they had friends in Washington when negotiating for a contract extension with a Navy official referred to only as "Captain D."
"He should be aware of Wedtech's general ally structure," Wallach wrote. "He doesn't have to know it in detail. The fact that we have it, and his awareness of it, ought to be gently indicated . . . ."
Capt. David de Vicq, a former Navy program manager for the pontoon contract, testified at the hearing that he was "Captain D." He said Wedtech exhibited "shoddy workmanship" but apparently had the support of higher Navy officials.
Previous hearings by the subcommittee have shown that Wedtech obtained a $32-million Army engine contract under the SBA minority program in 1982 after the White House pressured the agency to select Wedtech, then controlled by Latino businessman John Mariotta. Wallach and Nofziger had lobbied for this award.