Meese Records Show Big Profits, But None From Wedtech

Posted: July 07, 1987

WASHINGTON — Attorney General Edwin Meese 3d, facing a criminal investigation in the Wedtech scandal, yesterday released extensive financial information showing that although he made substantial profits on securities investments since 1985, none of them were in Wedtech Corp.

According to the documents, Meese made his money in a succession of 23 quick trades, with stocks purchased and sold on the same day.

The trades were handled by W. Franklyn Chinn, a California financial consultant who, until February, was a director of Wedtech, a bankrupt New York military contractor.

The documents show that Meese made profits of $14,392 in 1985 and $11,812 in 1986. In 1987, Meese earned $12,571 on one stock investment.

Meese is the subject of a criminal investigation by an independent counsel probing whether high-level Reagan administration officials and former officials benefited financially in exchange for helping Wedtech secure more than $200 million in Army and Navy contracts between 1981 and 1986.

Meese has said that while he was White House counsel he interceded for Wedtech at the request of E. Robert Wallach, a friend and a paid consultant to Wedtech.

In 1985, when Meese became attorney general, Wallach introduced Meese to Chinn, who established a trust for the new attorney general and his wife, Ursula, in the form of a partnership.

Chinn was working for Wedetch as a consultant in 1985 and later became a director.

Chinn is a subject of a criminal investigation concerning Wedtech.

For several months, Meese was increasingly pressured by members of Congress to detail his investments with Chinn.

Last week, the Office of Government Ethics said in a letter to Congress that it had not approved Meese's partnership with Chinn.

In the report released yesterday, Meese's lawyers sharply criticized the ethics office, saying it never questioned the partnership during discussions with Meese, choosing instead to complain to Congress.

The report said that ethics office's letter raised subsequent questions in the media about Meese's investments.

The report said Meese placed his family's liquid assets - approximately $60,000 - in the blind trust with Chinn to avoid "any actual or apparent conflict of interest" while serving as attorney general.

"The history of these efforts demonstrates that Mr. Meese was acting lawfully and properly at every stage of the events relating to this investment," the report said.

The report said that due to the nature of the agreement between the Meeses and Chinn, Meese did not know where or how his money was invested.

"Mr. Chinn's investment strategy was to buy stocks in the morning and sell them in the afternoon," the report said. "Usually this produced a profit, although at times there were losses."

Due to this quick movement of money, the Meeses' money was invested only for 19 of the 760 days the partnership existed, according to the report.

For the remainder of the time, the money was held at the Imperial Trust Company in San Francisco and at an account at the Bear Stearns investment house.

Meese ended the partnership agreement on June 30 "in light of the publicity surrounding the Wedtech investigation, and Mr. Chinn's identification as a possible subject of that investigation," the report said.

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