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Panel Backs Rules on Consulting, Policy

May 10, 2003|Ken Silverstein | Times Staff Writer

The Senate Armed Services Committee has approved a measure to prevent members of an influential Pentagon advisory board from profiting from their access to classified information.

The amendment, sponsored by Sen. Jack Reed (D-R.I.), was approved unanimously by a voice vote Thursday. It would require the secretary of Defense to create financial rules of conduct for members of the Defense Policy Board, a group of outside advisors to the Pentagon.

"The public needs to have confidence that the motivation for people to serve on these boards is patriotism, not profit," Reed said.

The vote came after news reports over the last few months revealed potential conflicts of interest involving Richard N. Perle, a member of the Policy Board and its chairman until March 27.

On Wednesday, the Los Angeles Times reported that Perle had addressed an investment seminar on how to profit from possible military action with Iraq and North Korea soon after receiving classified briefings on the two countries.

The 30-member Policy Board consults regularly with Secretary of Defense Donald H. Rumsfeld. Its meetings are classified and members are allowed access to top-secret intelligence reports.

Board members are not paid but are subject to government ethics prohibitions. The amendment calls for limitations on Policy Board members' use of classified material for personal gain and full disclosure to the Pentagon of financial information that could present a conflict of interest.

"You want eminent people on these boards so the rules shouldn't be so onerous that no one wants to join," Reed said. "But you also need to ensure that people that have access to [classified] information can't use it for profit making."

Reed's amendment was attached to the full Defense Authorization bill, which Congress is expected to vote on this summer. Reed said he hoped that Rumsfeld would implement steps called for by the amendment before then.

"My sense today is that there are no rules, it's up to the individual," Reed said. "There need to be specific guidelines in place so no one can say, 'I didn't know what the rules were.' "

Perle, one of the nation's most prominent defense thinkers and a leading advocate of the war in Iraq, has a broad range of business interests. He sits on the boards of several defense contractors and is part of the management team of Trireme Partners, a venture capital fund that looks to invest in companies involved in defense and homeland security.

The New Yorker first reported on potential conflicts of interest involving Perle's role on the Policy Board and his private business interests.

According to the magazine, last January Perle solicited money for Trireme Partners from a Saudi businessman who hoped to get the Bush administration to back down from invading Iraq.

The New York Times later reported that the bankrupt telecommunications firm Global Crossing Ltd. had retained Perle to help win Pentagon approval for its controversial sale to two Asian companies.

The Los Angeles Times reported on classified briefings that Perle and the board received that related to his business dealings, such as the issues involving North Korea and Iraq. The Times story also said that Trireme Partners has been considering investments in high-tech military communications systems, another area that the Policy Board was recently briefed about. Perle did not return a phone call seeking comment. He denied any wrongdoing in a letter to Rumsfeld in March when he relinquished the chairmanship of the Policy Board.

Charles Lewis, director of the Washington-based Center for Public Integrity, said he was "dumbfounded" that Perle had not been dismissed from the board altogether.

"There's an impression here that there's a tango between his role on the board and his private interests," Lewis said. "It's not unusual for people in Washington to try to make money but they're usually a little more subtle about it."

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