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US defense consultants benefit foreign contractors. Investigators ignore evidence of sensitive data going overseas

By Barbara BradleyStaff writer of The Christian Science Monitor / August 30, 1988


Pentagon probers may be overlooking a critical area in their investigation, say former Defense Department investigators, congressional sources, and others involved in the defense procurement process. For nearly two years, investigators have been gathering evidence suggesting that defense consultants obtain sensitive information from Pentagon officials and pass it on to their clients, American defense contractors.

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What investigators are ignoring is the international flip side, some critics say, in which consultants may have passed sensitive information about United States defense plans, budgets, or weaponry specifications to foreign clients or countries.

Search warrants and affidavits that have been released show that consultants had contact with foreign embassies and clients. For example, when Federal Bureau of Investigation agents searched the office of defense consultant Melvyn Paisley on June 14, one of the many items they sought was documentation relating to Mr. Paisley and an Israeli company called Mazlat. The Israeli company has a contract to supply the Navy with an unmanned surveillance aircraft. In other searches as well, agents were specifically seeking documents relating to foreign embassies and officials.

Justice Department sources have told the Monitor that the international aspect is ``not a major factor'' in the probe.

The reason, say congressional and Justice sources who have knowledge of the probe, is not because there is no evidence of international information-passing, but because the domestic side of the probe is so big that investigators have had to winnow down their case.

Consequently, prosecutors are concentrating on two forms of possible corruption: whether consultants bribed Pentagon officials to get information for US companies, and whether they bribed congressmen to get favorable treatment on Capitol Hill.

But in narrowing their focus to the alleged domestic corruption, investigators may be closing avenues that impinge most directly on national security, congressional and defense sources say.

``The kind of information-passing evident in this investigation has totally broken down all the controls the government has instituted to insure that sensitive, highly classified information does not fall into foreign hands,'' says a former Pentagon investigator. ``Nobody knows what damage has been done. That's what worries me most.''

The former Pentagon investigator worries that the government will let evidence of international information-passing disappear into a black hole - a replay of a similar case he investigated in the early 1980s.

History repeating itself?

In that case, which was eventually filed in 1985, defense consultant Bernie Zettl was charged with passing classified budget documents to a defense contractor, GTE Government Systems. GTE pleaded guilty to receiving the documents. Mr. Zettl's case is ongoing.

``We knew that many consultants - not just Zettl - were meeting with members of foreign governments,'' the investigator says. ``And we had very solid evidence that information was passed,'' including taped conversations.

He alleges that Zettl met with Belgian officials ``all the time,'' as well as members of an Asian government, which the investigator would not specify. That evidence was turned over to the Defense Procurement Fraud Unit, a special arm of the Justice Department.