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Meese Ally Wallach Gets 6 Years in Wedtech Case

October 16, 1989|From Associated Press

NEW YORK — E. Robert Wallach, a close associate of former Atty. Gen. Edwin Meese III, was sentenced today to six years in prison for his racketeering conviction in the Wedtech Corp. scandal.

U.S. District Judge Richard Owen said Wallach used his influence to gain access "to the back steps of the White House" and made almost half a million dollars as a result.

Wallach, 55, a prominent personal injury lawyer from San Francisco, was found to have illegally received $425,000 from the now-defunct South Bronx defense contractor to influence Meese and other government officials as part of Wedtech's efforts to gain government business.

He was convicted Aug. 8 by a jury in Manhattan federal court of racketeering, fraud and conspiracy to defraud the U.S. government.

His co-defendants--R. Kent London and W. Franklyn Chinn--were convicted at the same trial of racketeering, racketeering conspiracy and fraud charges stemming from payments they received from Wedtech. They were to be sentenced later in the day.

In a statement to the judge before sentencing, Wallach said there was a maxim that went, "Too much success can bring failure."

"I am the epitome of that, and I am paying for it," he said.

The judge denied defense motions to throw out the verdict based on the dismissal of a juror who called in sick and based on defense arguments that the law Wallach was convicted of breaking was unconstitutionally vague.

Wallach, who was hired by Wedtech as a consultant, was found to have defrauded the company and its shareholders of a $125,000 payment in 1983, which he billed as work for the company's public stock offering but was actually for his efforts to influence Meese and others to secure an Army contract for Wedtech.

He also was convicted of illegally receiving $300,000 from Wedtech officials, purportedly for helping the company acquire shipyards and a Michigan tug-barge system.

The jury found that the money was actually a payment in anticipation of Wallach's employment at the Justice Department where he could influence Meese and other officials. Wallach was hired by the Justice Department.

Wedtech, once a small machine shop, grew into a $100-million government contractor through a Small Business Administration program that set aside contracts without competitive bidding for minority-controlled companies.

Meese was never charged in the Wedtech scandal although his ethics were questioned by a special prosecutor in Washington who said Messe could have been hit with tax and conflict of interest charges.

Meese testified for Wallach and said Wallach had never asked him to do anything improper for Wedtech.

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