Prosecutor Chosen In Deaver Probe

Posted: May 30, 1986

WASHINGTON — Whitney North Seymour Jr., a former U.S. attorney who has long been a member of New York City's social and political establishment, yesterday was appointed to head an independent investigation of conflict-of-interest allegations against former White House aide Michael K. Deaver.

A special three-judge federal court appointed Seymour, 62, a Republican, as an independent counsel - commonly known as a special prosecutor - to determine whether Deaver violated any criminal laws in lobbying on behalf of clients after he left the White House slightly more than a year ago.

Seymour, U.S. attorney in New York City from 1969 to 1973, said his job was to "let the chips fall where they may." He was a partner in Simpson, Thatcher & Bartlett, one of the largest law firms in New York, until three years ago, when he joined an old friend, Peter Margaree Brown, in forming what he called an old-fashioned "country lawyer" practice.

A spokeswoman for Deaver said yesterday that he would furnish Seymour with ''all information that he requests," that he expected a "thorough and impartial investigation" and that he would be "fully exonerated of any wrongdoing."

Deputy Attorney General D. Lowell Jensen, in a May 22 letter requesting that the court order an independent investigation under the Ethics in Government Act, focused attention on Deaver's representation of the governments of Puerto Rico and Canada, according to a Justice Department document made public yesterday.

The FBI learned, the document said, that two or three months after Deaver had left his job as White House deputy chief of staff in May 1985 to become a highly paid lobbyist for governments and corporations, he called White House national security adviser Robert C. McFarlane.

As a representative of Puerto Rico, Deaver told McFarlane of his client's objections to a proposal to revoke a tax code provision that gave tax breaks to American businesses investing in Puerto Rico, Jensen wrote the three judges. The subsidy was worth $600 million a year to the island's economy.

At the time, McFarlane was one of a group of officials assigned to examine whether the provision should be revoked, Jensen said.

Under a federal criminal law, Deaver was prohibited from lobbying White House officials for one year after leaving his government job.

Deaver's spokeswoman said Jensen incorrectly stated that Deaver represented Puerto Rico. Sources told the Washington Post that Deaver was representing a U.S. corporation that does business in Puerto Rico.

Deaver's work on behalf of the Canadian government may have violated two other laws, according to Jensen's assessment of the case. Those laws barred Deaver from lobbying on an issue in which he had participated "personally and substantially" as a federal official.

Jensen said that the FBI's investigation suggested that from February to mid-March in 1985, Deaver "made recommendations, gave advice and otherwise participated substantially" in a dispute between Canada and the United States over acid rain.

At the time, Canada sought to persuade the United States to take strong measures to reduce acid rain, which is blamed for damaging lakes, forests and wildlife in eastern Canada and the northeastern United States.

On Oct. 25, 1985, five months after leaving the White House, Deaver, then a $105,000-a-year consultant to the Canadian government, attended a meeting at which Drew Lewis, U.S. envoy on acid rain, was present.

Deaver "spoke out in the meeting, as Canada's consultant," Jensen wrote.

Deaver has said that he did not participate in any substantive White House discussions about acid rain and does not know what acid rain is.

Jensen said that Seymour also should look into allegations involving Deaver's negotiations on behalf of the Daewoo Corp., a large South Korean steel firm, over alleged violations of U.S. import restrictions.

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