War on Poverty

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Meese's property and paper

Thanks to his remarks about soup-kitchen cheats and the undocumented hungry, Presidential Counsellor Edwin Meese has earned a reputation as a man who does not like to see people abusing the system. But Senator Howard Metzenbaum, an Ohio Democrat, tried to show last week that President Reagan's nominee to replace the resigning William French Smith as Attorney General may in fact be guilty of just that. As the Judiciary Committee wrapped up its confirmation hearings, troubling questions lingered about Meese's personal past insolvency and his role in getting Administration jobs for those who gave him a financial hand.

When Meese went to Washington in 1981, he put his five-bedroom house in La Mesa, near San Diego, up for sale and bought another home in McLean, a fashionable Virginia suburb. But even though Meese lowered the price from $319,000 to $298,000, the California house stood empty for 20 months. As a result, Meese fell behind in his mortgage payments on both the old and the new residences— 15 months on the La Mesa property and four on the McLean home. His bankers did not attempt to foreclose. In the meantime, White House Personnel Director E. Pendleton James phoned his longtime friend California Real Estate Developer Thomas Barrack and told him of Meese's predicament. Within weeks Barrack had found a buyer and arranged for bank financing. The final price, including an adjacent lot: $307,500.

Perhaps more remarkable than the quick sale was the fact that Barrack had effectively contributed $70,000 of his own money to the deal. The listed purchasers were Santa Ynez Contractor Irv Howard, who made a down payment of $70,000, and the Great American Federal Savings Bank in San Diego, which had, at Barrack's behest, arranged a $240,000 mortgage for Howard at a favorable 11% interest rate. (Great American had already lent $423,000 to Meese at the time.) But last week Barrack testified that he had actually lent $70,000 to Ted Elkin, a former employee and a Bulgarian refugee, who immediately took over the property in partnership with Howard's son. Elkin and the younger Howard ended up selling the house nine months later for only $275,000. Barrack forgave the loan and thus swallowed the loss.

That charitable attitude, charged Metzenbaum, might have been related to Barrack's December 1982 appointment as a Deputy Under Secretary at the Interior Department. He asked, "If a person were interested in getting a good position in Washington, would it be a good move on his part to help the White House Counsellor get rid of his home?" Barrack countered: "Did [my help] have anything to do with my going to Washington? Absolutely not."

Metzenbaum released a sheaf of memos that indicated Meese had been given information from internal documents of President Carter's campaign. One was an outline of Carter's strategy for farm and rural voters. Attached was a cover note from Reagan Campaign Aide Max Hugel, telling Meese that Campaign Chairman William Casey, now CIA director, wanted his thoughts on how to "counteract this effort." Another memo, written by Republican Consultant Thelma Duggin, concerned Carter's plans to win the black vote. At the top, Campaign Aide William Timmons had scribbled, "Ed Meese—Ideas how to counter??"