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Officials Refusing To Approve Meese’s Financial Disclosure Form

January 8, 1988

WASHINGTON (AP) _ Justice Department officials are refusing to approve Attorney General Edwin Meese III’s financial disclosure form because of a possible conflict of interest involving his ownership of regional Bell telephone company stocks.

Meese and his wife, Ursula, held telephone stock worth $9,600 a year ago when Meese approved Justice Department recommendations to lift some restrictions on the businesses in which the regional Bell companies could engage.

The Bell stocks recently turned up on Meese’s much-revised financial disclosure form, which was reviewed last month by Janis Sposato, a career Justice Department attorney. She spotted a possible conflict and contacted independent counsel James McKay’s office, said federal law enforcement officials.

At that time, McKay told the department that for some time he had been investigating Meese’s ownership of the Bell stocks and official action concerning the companies, said the officials, speaking on condition of anonymity.

Meese has been under criminal investigation by McKay’s office since May 11 for his involvement with Wedtech Corp., a now-bankrupt Bronx, N.Y., defense contractor.

A Justice Department spokesman, Terry Eastland, said Thursday night that Meese’s ethics form ″has yet to be officially approved.″ Eastland said that the signing by Associate Attorney General Stephen Trott, the designated official for Meese’s ethics forms, won’t be forthcoming until McKay concludes his criminal investigation of Meese.

The spot for Trott’s signature is adjacent to a box on the disclosure form which states: ″The information contained in this report discloses no conflict of interest under applicable laws and regulations.″

Meese has refused to remove himself from the Justice Department’s efforts to supervise the breakup of American Telephone & Telegraph Co.

One of Meese’s attorneys, James Rocap, predicted McKay’s inquiry will conclude there was nothing improper about Meese’s actions on behalf of the regional Bell companies at a time when he owned stock in them.

Last Jan. 20, Meese obtained a waiver from the White House allowing him to remain involved in Justice Department decisions regarding the Bell companies, despite his investments in them.

However, the waiver by then-White House counsel Peter Wallison was based on Meese’s assertion that he already had sold the stock and that in any event the holdings were too small to pose a conflict.

But, in fact, as Meese’s recently released financial disclosure form shows, the attorney general never sold the stock because he and his wife lost the stock certificates and haven’t gotten replacements.

Last February, Meese approved Justice Department recommendations which generally supported seven regional phone companies’ requests that they be permitted to offer long-distance phone service in certain areas. Meese also said the regional Bell companies should be permitted to manufacture telephone equipment and provide electronic information services such as home banking.

The federal judge overseeing the breakup of AT&T, however, refused to allow the so-called Baby Bells into manufacturing or long-distance service. He did allow them to transmit information services but said they could not provide the information itself.

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