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Former SBA Official Says Meese Aide Swayed Wedtech Loan

January 30, 1988

WASHINGTON (AP) _ The Small Business Administration helped Wedtech Corp. finance a defense contract only because of interest expressed by a top aide to presidential counselor Edwin Meese, the agency’s former No. 2 official testified Friday.

Donald R. Templeman, testifying at former White House aide Lyn Nofziger’s conflict-of-interest trial, said SBA officials put aside earlier skepticism and helped Wedtech finance the $32 million contract to build Army engines following inquiries by James E. Jenkins, deputy presidential counselor.

″Frankly we would not have gone along with the contract had it not been for Mr. Jenkins’ interest,″ said the SBA’s former deputy administrator.

Templeman said Jenkins called him three or four times in April and May 1982 to inquire about the progress of negotiations between SBA and the Army on financing the no-bid contract that had been set aside for minority businesses.

Jenkins expressed his interest in fulfilling President Reagan’s 1980 campaign promise to help bring jobs to the South Bronx, the economically devastated New York City neighborhood where Wedtech was located, Templeman said.

During these conversations, Templeman said he told Jenkins SBA ″had some serious doubts″ about giving Wedtech large amounts of government money to finance the project.

But at a May 19, 1982 White House meeting convened by Jenkins, Templeman said he pledged that the SBA would provide $5 million in financing to help Wedtech get the contract.

Templeman said Jenkins called him on June 15, 1982 to find out why Wedtech had not received a formal commitment of the SBA financing. ″He asked me to look into it and see what was holding it up.″

″I expedited it and got it signed,″ Templeman said.

″Mr. Jenkins didn’t strong-arm anybody at the meeting?″ asked defense lawyer E. Lawrence Barcella.

″No, he didn’t,″ Templeman acknowledged.

Nofziger, former White House political director, is charged with four counts of improperly lobbying former colleagues on President Reagan’s staff in 1982 on behalf of Wedtech and two other clients.

His partner, Mark A. Bragg, is accused of aiding and abetting an alleged contact by Nofziger with Jenkins. Each of the charges carries a two-year sentence and a $10,000 fine.

One of the contacts at issue is an April 8, 1982 memo Nofziger wrote to Meese, who was then at the White House, saying ″it would be a blunder″ not to give Wedtech the contract.

Templeman said agency officials had rejected a November 1981 proposal by Wedtech to obtain $10 million in SBA money to finance the difference between the company’s price and what the Army was willing to pay.

″It required too much support from SBA,″ Templeman said. ″I was skeptical of it,″ he said.

In other testimony, a Pentagon official said the Army decided to go ahead with an 1981 audit of Wedtech’s $39 million offer after an unpaid member of Nofziger’s White House staff expressed his interest in the company.

Robert J. Stohlman testified that up until the Aug. 28, 1981 meeting with volunteer Pier F. Talenti, the Army had refused to audit Wedtech’s bid because it was so much higher than the Pentagon’s $19 million cost estimate.

At the meeting, Talenti said ″he felt they could perform the contract and he didn’t understand why we wouldn’t procceed to award the contract to them,″ Stohlman said.

Stohlman said he then recommended conducting the audit because of Talenti’s ″strong views as to the capability of this company.″

The Army also audited its own $19 million cost estimate and raised its offer to $24 million, Stohlman said.

During cross-examination, Stohlman acknowledged that a number of congessmen had also asked the Army to review the contract but insisted that the meeting with Talenti was ″the final inquiry that influenced us.″

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