More Trouble for Meese

By Ed Magnuson

On its face, the idea was ludicrous. Why would anyone send the Attorney General of the U.S. a memo suggesting, in effect, that a crime should be committed? Yet reports surfaced last week that such a note had been sent to Edwin Meese in 1985, shortly after he became the nation's top law enforcement officer. The suggestion allegedly came from E. Robert Wallach, a Meese friend and his former personal attorney. The purported proposal: that a bribe be paid to an Israeli official, perhaps Prime Minister Shimon Peres or his Labor Party, to ensure that Israel would not sabotage a proposed pipeline that would carry Iraqi oil through Jordan to the Red Sea, bypassing the perilous Persian Gulf.

First published in the Los Angeles Times, the reports contended that Meese "did nothing" after receiving the memo. The Times also stated that the alleged note had become the "primary focus" of an investigation by Independent Counsel James McKay into possible criminal activity by Meese. The Foreign Corrupt Practices Act forbids any U.S. citizen or firm from bribing a foreign official for business purposes.

When asked about the reports, McKay said cryptically that "we have been investigating this matter for some time." But he refused to confirm whether he had the alleged memo. Nathan Lewin, an attorney representing Meese in the ongoing probe, termed the allegation "reprehensible" and "false in important respects." Lewin declared that "no actual or potential violation of law was brought to Mr. Meese's attention during his limited participation in discussions regarding the project." He too declined to say whether there was such a memo.

Israel denied that any payments were offered to government officials or political parties. Peres, who is now Foreign Minister, called the proposed bribe "nothing but a fantasy. Meese's lawyer, perhaps, wanted to put the money in his own pocket and made up this story."

A high-ranking Israeli official told TIME last week that in late 1984 Israel was approached, first by Jordan, then by Iraq, for assurances that the ) pipeline would not be attacked. After high-level government discussion in late 1984 or early 1985, the official said, "we told them, go ahead, and have never heard a word about the project since."

The California-based Bechtel Group has confirmed that it actively sought the billion-dollar construction job, which was to have been privately financed. Bechtel sources say Wallach was involved in the deal as legal counsel for Bruce Rappaport, a Geneva-based international oilman, who was to handle the pipeline oil sales. Citing his closeness to Meese, Wallach contacted several Administration officials to see if money earmarked for Israel by Congress could be used to insure the pipeline against an Israeli attack. The project was abandoned when proposed lenders asked for guarantees of repayment even if the line was damaged. No one could, or would, provide them.

Wallach, a former president of the Bar Association of San Francisco, had often boasted of his influence in Washington, claiming that "I'm Meese's boy." He was indicted on various charges, including fraud, in December by a federal grand jury in Manhattan. One accusation: he took illegal payments for trying to influence Meese in winning military contracts for Wedtech, the bankrupt New York manufacturing firm. That was trouble enough for the beleaguered Attorney General, who has appeared five times before McKay's grand jury. On Friday McKay visited the White House to tell senior officials that his investigation of Meese had grown more serious.

With reporting by Anne Constable/Washington