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There is no evidence that Weinberger or Shultz knew of any improper payments, if such were ever made. At the Pentagon, Spokesman Michael Burch issued a terse statement: "We consider the story to be complete nonsense." Shultz said simply, "This is a Bechtel matter and any statements made about it would appropriately be made by the Bechtel Co." At Bechtel, the chairman ended his memo by writing that both Weinberger and Shultz "are men of very high principle who would never associate themselves with any activity that they believed improper."
The Bechtel case nonetheless puts the Reagan Administration in an awkward position. Since it took power, it has been trying to weaken the Foreign Corrupt Practices Act, which was passed in the wake of the scandal concerning Lockheed's alleged payments to top government officials around the world. The Administration has argued that the law, which states that a corporation is guilty if it has "reason to know" that its agents are making illegal payments, is too vague.
Since the Bechtel case became public two weeks ago, the Administration has appeared to back away from its plans to revise the act. —By Robert T. Grieves. Reported by Robert Buderi/San Francisco and K.C. Hwang/Seoul