After spending 14 months and $1.7 million investigating Edwin Meese, Independent Counsel James McKay last week offered the outgoing Attorney General one small consolation: he will not be prosecuted for violating any of the laws he had been entrusted to enforce. But far from the "vindication" that Meese had confidently predicted, McKay's 830-page report asserts that Ronald Reagan's longtime friend "willfully" filed a false tax return and "probably" violated conflict-of-interest laws. If Meese's legal troubles are behind him, his ethical behavior remains troubling.
Meese was outraged that McKay would accuse him of unlawful conduct without giving him his day in court to rebut the charges. Meese termed McKay's tactics "absolutely at odds with every principle of our system of justice" and said he would fire any prosecutor in his department who promoted such "a false implication of wrongdoing."
McKay explained, however, that unlike other prosecutors, he was required by the 1978 independent-counsel law to explain his findings publicly, including his reasons for not indicting. Most people who break a law, he said, are not prosecuted unless they have a clear criminal intent. McKay said he had found none in the case of the Attorney General, and although he considered the deterrent value of such a highly visible indictment, he had decided not to treat Meese as a special case. Said McKay: "It was a real tough decision -- what message is this going to send out to the public?" McKay's major findings:
Taxes. Meese failed to report his capital gains from the June 1985 sale of $54,581 in stocks. When Meese could not locate the records to figure the capital gain, his accountant filed a tax return without disclosing the sale. Last February Meese finally filed an amended return, citing a profit of $14,606 (understating it by more than $6,000, according to McKay). Meese "probably" broke two tax laws by filing a false return and "failing to pay his income tax when due."
Baby Bells. Meese also "probably" violated conflict-of-interest laws by taking part in Justice Department decisions that could have enhanced the value of the stock he held in regional Bell Telephone companies. Although Meese had tried to transfer the shares to a financial adviser, he did not actually sell them and continued to get dividend checks. But he did not cash them, and McKay found no evidence that Meese sought to profit from the Justice Department deliberations.
The Iraqi pipeline. At the instigation of his friend and attorney E. Robert Wallach, Meese helped promote U.S. and Israeli guarantees for a proposed pipeline that would allow Iraqi oil to bypass the Persian Gulf. Wallach told Meese the plan included a proposal to pay off Israel's Labor Party so that Israel would not sabotage the project. "If an illegal bribery scheme actually was afoot, Mr. Meese's actions would have furthered the scheme," said McKay. But some participants refused to be questioned, and there was insufficient evidence that a bribe plot existed. Thus McKay did not charge Meese with aiding it.