No conflict, Navy boss replies
Navy Secretary John Lehman Monday denied allegations that there are financial conflicts between his Pentagon post and his former work as a consultant to major defense contractors.Skip to next paragraph
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Monday Mr. Lehman summoned reporters to refute a New York Times article suggesting that the secretary ''did not sever all his connections with the company.'' Mr. Lehman's firm, the Abington Corporation, had provided advice to such companies as the Northrup Corporation, manufacturer of the F-18 aircraft.
Following his appointment as Navy secretary, Mr. Lehman sold the right to use the company's name overseas to a British peer, Lord Chalfont, a former minister of state for foreign affairs. It is charged that Mr. Lehman was not paid for this transaction until nine months after he joined the Reagan administration, and that the firm's domestic operation was not converted to a holding company (as Mr. Lehman had claimed) but legally continued as a management-consulting company.
Mr. Lehman told reporters a legally binding, interest-bearing note had been provided by Lord Chalfont when the agreement was reached - and that this was obtained before the legal limit for government officials to divest themselves of certain financial interests. He added that his wife (also an officer of the company) had neglected to change the description of the company on file with the District of Columbia, but that ''Abington Corporation has operated as a holding company only.''
The Navy secretary said federal conflict-of-interest laws are quite strict regarding the use of privileged information and position to reap financial gain once an official has left government. But he acknowledged that there is a ''revolving door'' between government and industry, and that appointees must avoid the appearance as well as the fact of conflicting interests.
Sparked by the controversy, the Office of Government Ethics said it would review the Lehman case.