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Meese Says Wallach Did Not Ask for Preferential Treatment

July 10, 1989

NEW YORK (AP) _ Former U.S. Attorney General Edwin Meese III testified Monday that his longtime friend and former lawyer E. Robert Wallach never sought preferential treatment for the Wedtech Corp.

Meese also testified at Wallach’s racketeering trial that Wallach never asked him to intervene in the investigation of the now-defunct military contractor.

Wallach was Meese’s personal attorney during confirmation hearings for the attorney general’s post.

″Did Mr. Wallach ask you to intervene in any way, shape or form in the Wedtech investigation?″ asked Wallach’s attorney, Gary Neftalis.

″No, absolutely not,″ Meese said.

″Did you intervene in any way in the Wedtech investigation?″ Neftalis asked.

″No, I did not in any way,″ he replied.

Wedtech, once a small machine shop in New York City’s South Bronx, grew into a $100 million government contractor through a special Small Business Administration program that set aside no-bid contracts for minority-controlled companies.

Evidence at earlier trials has shown that Wedtech received contracts through bribery even after its ceased to be a minority-owned company.

Wallach; W. Franklyn Chinn, 47, a former Wedtech board member and one-time Meese financial adviser; and a business associate of theirs, R. Kent London, are charged in a racketeering indictment with extracting almost $2 million in illegal payoffs and payments from Wedtech, including some $525,000 in alleged bribes to Wallach, to influence Meese and other government officials.

Meese, who resigned as attorney general in July 1988, was faulted in a Justice Department report in January for his efforts to help Wallach in an ill-fated, Mideast oil pipeline proposal and to assist him with Wedtech. The department’s Office of Professional Responsibility found Meese violated departmental standards of conduct and an executive order on ethics.

Meese has never been charged in connection with the Wedtech scandal.

In testimony in federal court, Meese said Wallach, 55, told him in 1981 - when Meese was a high-ranking adviser to President Reagan - that he was very impressed by the Wedtech Corp. because it employed minorities in the slums of the South Bronx.

He testified that Wallach had suggested it would be a good company for the administration to spotlight in its proposals for urban enterprise zones.

Wallach also told him about the company’s efforts in 1981 to secure an Army contract to build small engines, Meese said. Wallach said that company officials felt they were not being treated fairly by the Army and that he believed it would be advantageous if the company received the contract, Meese said.

Meese said he passed on the problem to his staff, which referred the matter to the Office of Cabinet Affairs at the White House. He said he had received ″probably dozens″ of similar complaints during his time at the White House.

″After that I don’t think I did anything further,″ Meese said. He answered no when Neftalis asked him if Wallach had asked him to give preferential treatment to Wedtech.

Cross-examination by Assistant U.S. Attorney Baruch Weiss was put off until Thursday after Weiss complained to U.S. District Judge Richard Owen that he was not informed about Meese’s appearance until late Sunday and needed more time to prepare.

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