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SBA Official Says White House Interest Influenced Wedtech Decision

January 30, 1988

WASHINGTON (AP) _ A former Small Business Administration official says the agency would not have helped Wedtech Corp. finance a defense contract except for interest expressed by an aide to then-presidential counselor Edwin Meese III.

Donald R. Templeman, former deputy adminstrator of SBA, said the agency ″had some serious doubts″ about giving Wedtech large amounts of business development funds to help finance the Army contract.

But Templeman, testifying at the conflict-of-interest trial of former White House aide Lyn Nofziger, said SBA set aside its concerns after deputy presidential counselor James E. Jenkins began making inquiries in April 1982.

″Frankly, we would not have gone along with the contract had it not been for Mr. Jenkins’ interest,″ Templeman told a U.S. District Court jury on Friday.

Templeman said Jenkins called three or four times to inquire about protracted negotiations between SBA and the Army over the contract that had been set aside for minority businesses.

Jenkins said he was interested in helping President Reagan keep his 1980 campaign pledge to bring jobs to the South Bronx, a poverty stricken section of New York City where Wedtech is located, Templeman said.

Templeman said that despite SBA’s reservations, he attended a May 19, 1982, meeting convened at the White House and he pledged the agency would give Wedtech $5 million in financing assistance.

On June 15, 1982, Jenkins called to find out why Wedtech had not received a commitment for the money, Templeman said.

″He asked me to look into it and see what was holding it up,″ the former SBA official said. ″I expedited it and got it signed.″

″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 Reagan’s staff in 1982 for Wedtech and two other clients.

Mark A. Bragg, 42, Nofziger’s partner, is charged with aiding and abetting one of the contacts. Each charge carries a two-year sentence and a $10,000 fine.

Among other things, Nofziger is accused of sending Jenkins a May 28, 1982, note on Wedtech’s need for a statement of the Army’s intent to award the contract in order to secure SBA financing.

Also at issue in the trial is an April 8, 1982, memo Nofziger sent to Meese, now attorney general, saying ″it would be a blunder″ not to give Wedtech the contract.

Wedtech was awarded the $32 million engine contract in September 1982. The bankrupt defense contractor has since become the focus of a widening influence-peddling scandal.

Templeman said that in 1981, SBA officials rejected Wedtech’s proposal to use $10 million to finance the Army contract.

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

An Army procurement official, meanwhile, testified that the Army reversed itself and conducted a 1981 audit of Wedtech’s $39 million proposal following a meeting with a member of Nofziger’s White House staff.

Robert J. Stohlman testified that Pier F. Talenti, a volunteer on Nofziger’s staff, called the Aug. 28, 1981, meeting to say ″he didn’t understand why we wouldn’t proceed to award the contract to them.″

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