WASHINGTON — The Justice Department has turned over information about Atty. Gen. Edwin Meese III's involvement in telephone industry issues to independent counsel James C. McKay after department lawyers uncovered evidence that Meese's actions may have violated federal conflict-of-interest laws, according to sources familiar with the inquiry.
The sources said that among the material Deputy Atty. Gen. Arnold I. Burns gave McKay last month, after an investigation by criminal division lawyers into Meese's actions while he held legal title to telephone company stock, was information that Meese associate E. Robert Wallach helped set up one meeting between Meese and telephone industry officials.
The Justice Department review was triggered by a request several months earlier by McKay, although McKay's office was not actively investigating the "Baby Bell" issue until Burns transmitted the information shortly before Christmas, sources said.
Wallach, a close friend of Meese and his former lawyer, was indicted in New York last month on racketeering charges alleging that he and W. Franklyn Chinn, Meese's former investment adviser, took payoffs from the Wedtech Corp., a bankrupt defense contractor, to influence Meese and other officials.