WASHINGTON — The scandal-scarred Wedtech Corp. won multimillion-dollar contract extensions from the Navy in 1985 and 1986 over the objections of Navy contract officers after the company hired politically connected lobbyists for fees ranging from $150,000 to $400,000, a Senate subcommittee was told Wednesday.
Mario E. Moreno, a former Wedtech executive vice president who has pleaded guilty to bribery and conspiracy charges for his role in the bankrupt firm's activities, said in an affidavit to the subcommittee that he had agreed to pay San Francisco lawyer and consultant E. Robert Wallach $150,000 to help Wedtech obtain and extend a Navy pontoon contract. Wallach was a close friend of Atty. Gen. Edwin Meese III.
Moreno said also that he had offered a maximum fee of $400,000 in connection with the Navy project to Mark A. Bragg, a partner in a public relations company with former White House political director Lyn Nofziger.
"Mr. Wallach reported that he had spoken to 'his friend' and kept 'his friend' informed of Wedtech's efforts to obtain the pontoon contract," Moreno said in his sworn statement. Moreno added that, "in the context of prior conversations with Mr. Wallach, I took his friend to mean Edwin Meese III," who was White House counselor before he became attorney general in early 1985.
Moreno said that Wallach later "indicated to me that 'his friend' had communicated with Mr. (Caspar W.) Weinberger," the secretary of defense, about Wedtech's Navy work. Wedtech contracts with the Navy eventually totaled $134 million.
"I did not ask Mr. Wallach for any more details about this conversation," Moreno added.
The Senate Governmental Affairs subcommittee on oversight of government management released the affidavit Wednesday as part of its inquiry into military procurement practices in light of the Wedtech scandal. The bankrupt New York defense contracting firm is the target of both federal and state investigations into influence buying in the solicitation of contracts.
Bragg and Nofziger have been indicted on ethics law violations for allegedly contacting Reagan Administration officials on behalf of Wedtech and other clients.
A subcommittee official said that the panel has no independent evidence that Weinberger or Meese intervened to help Wedtech in the Navy contract.
Meese has acknowledged that, after receiving several notes from Wallach about Wedtech in 1982, he instructed White House aides to make certain Wedtech got "a fair hearing" on a no-bid $32-million Army engine contract that the firm ultimately obtained. Meese has said that that was his only contact with Wedtech's government work.
Wallach, who has denied any wrongdoing, now is under scrutiny in the Wedtech scandal by a court-appointed independent counsel in Washington. Besides Moreno, Nofziger and Bragg, 13 persons so far have been indicted or have pleaded guilty in the widening investigation.
L. Wayne Arny, a former deputy assistant secretary of the Navy, told the subcommittee that he ignored Navy contract officers' harsh criticism of Wedtech's work after he was lobbied extensively by Bragg.
However, Arny insisted that Bragg's lobbying did not affect his decision. Rather, he said he agreed to give Wedtech more work in constructing pontoons, or portable bridges, after an independent evaluation by an outside Navy officer concluded that Wedtech could improve its work and probably could meet future delivery schedules.
Fee of Up to $400,000
Subcommittee Chairman Carl Levin (D-Mich.) charged that Arny's enlistment of an outside officer's opinion was highly irregular and challenged him to cite another example of such a procedure. Arny said he could not.
Moreno, in his affidavit, said of discussions with Bragg: "We agreed that he would get $400,000 from Wedtech if the options (contract extensions) were awarded without price negotiations and $200,000 if they were awarded after price negotiations."
Sen. William S. Cohen (R-Me.), a subcommittee member, asked Arny: "Did Mr. Bragg ever offer you a portion of his fee?"
"No, sir. He did not," Arny replied. The extension was granted after negotiations that reduced the price.