Not Quite a "Beacon"

By Ed Magnuson

The question sounded facetious. "Was there anybody who had either given loans or financial aid to you or your family who wasn't subsequently given a federal job?" asked Vermont's Democratic Senator Patrick Leahy. Laughter rippled through the crowded Senate Judiciary Committee hearing room. Presidential Counsellor Edwin Meese grinned. But Leahy said he was serious. Meese hesitated, then came up with a name: James Schmidt, a senior vice president of California's Great American First Savings Bank, which had loaned Meese $423,000 in mortgages and loans secured by houses in California and Virginia. Leahy tartly reminded Meese that four other officials of this bank had received federal appointments.

Last week's committee hearings on Meese's nomination as Attorney General turned out to be bumpier than expected. Judiciary Chairman Strom Thurmond, a Republican, had scheduled only one day of testimony. But Meese annoyed some Senators by refusing to concede that his personal business dealings with men who later went to work for the Government had been wrong in any way. More seriously, an internal memo from two lawyers in the Office of Government Ethics claiming that Meese had violated rules governing the conduct of federal employees was disclosed by the Wall Street Journal. As a result, the hearings continued for three full days as Meese underwent another uncomfortable grilling about the same issues raised in his confirmation hearings last March, which were suspended after Meese requested that a special prosecutor be appointed to look into the matters.

The 385-page report of the special counsel, Washington Lawyer Jacob Stein, cleared Meese of any criminal acts but did not pass judgment on the ethics of his conduct. Common Cause, a nonpartisan public interest lobby, claimed that the findings showed Meese's actions to be unethical. The Common Cause complaint, in turn, prompted David Martin, director of the ethics office, to ask his staff to examine the case. Two civil service attorneys, F. Gary Davis and Nancy Feathers, wrote a memo last month that cited three "ethics violations" by Meese and one incident that presented an "appearance problem."

Questioned by the committee last week, Martin explained that he had advised Fred Fielding, the White House counsel, about the staff's concern. Fielding informed Meese's lawyers, and one of them, Leonard Garment, discussed the matter with Martin. At the hearings, the two staff lawyers explained that after re-examining the matter with their boss, all three agreed that Meese had been guilty only of creating "the appearance" of a possible conflict of interest. While Davis urged that Meese be "counseled" about this conduct, Martin decided that it was sufficient merely to advise Fielding that the "appearance" matter still troubled the ethics office. Martin, who earned his political appointment by helping organize Reagan's 1980 election campaign in Maryland's Montgomery County, insisted that no one had pressured him to change his staff's position. Even so, the agency's turnabout did not satisfy some of the Senators.

What most troubled Martin's office, as well as some Senators, was Meese's presence at two informal White House meetings at which John McKean, Meese's personal accountant, was approved for appointment to the U.S. Postal Service board of governors. Meese did not tell the other participants at the meetings that McKean had helped him get some $60,000 in unsecured loans. Davis said that he finally concluded this was not an ethics violation by Meese because the money actually came not from McKean but from a fund controlled by one of his partners. Meese, however, had dealt only with McKean and had cited him as the source of the loans on his financial-disclosure form.

Meese testified that he had not excused himself from these meetings because that had not been the custom at the White House. Beyond that, he said, the meetings were merely to "review" appointments and McKean's name had been first mentioned at them by Michael Deaver, another presidential aide. Asked about a written agenda prepared by McKean in which he noted that he wanted to talk to Meese about both his appointment and the repayment of the personal loans, Meese conceded only that his attendance at the meetings had been "inopportune."

Archibald Cox, chairman of Common Cause, told the committee that he found the ethics office's reasoning "incredible," "unbelievable" and . "frightening." Said Cox about Meese: "I still don't think he understands the appropriate moral standards." Still, it was Delaware Democrat Joseph Biden, once considered a possible Meese ally in the Senate committee, whose words most sharply stung the nominee. Declared Biden: "The Attorney General of the United States is supposed to be a beacon, a citadel of what young lawyers should aspire to. This office requires a higher standard, and you have demonstrated to me in your responses that you're not willing or able to step up to it." Meese flinched under the barrage. His wife Ursula wiped a tear from her cheek.

Meese's former colleague in the White House upper echelon, James Baker, was handily confirmed as Treasury Secretary last week by a 95-to-0 vote, and another former presidential aide, Richard Darman, was confirmed as Deputy Treasury Secretary. Meese is having a considerably tougher time, but despite his long ordeal, he is expected to win the committee's approval this week and Senate confirmation some time this month.

With reporting by David Beckwith/Washington