Secret memo, on oil deal

Press, 24 February 1988, Page 11

Secret memo, on oil deal

NZPA-Reuter Washington A secret 1985 memorandum to the United States Attorney-General, Edwin Meese, described a deal with the former Prime Minister, Shimon Peres, for Israel to receive up to SUS7OO million over 10 years from an Iraqi oil pipeline project. “A portion of those funds will go directly to Labour (Israel’s Labour Party)...,” according to the memorandum released yesterday by lawyers for Mr Meese. Mr Meese, under investigation to see if he

broke laws in the pipeline deal in connection with payments to foreign officials, told a news conference earlier this month that he did not remember reading the reference to money going directly to the Israeli Labour Party. Mr Peres, now Israel’s Foreign Minister, has denied money was offered or received. The memorandum, written by Mr Meese’s long-time associate and close friend, E. Robert Wallach, and the key document in a special prosecutor’s probe of the AttorneyGeneral, showed

precisely what had been proposed to Mr Meese and revealed how much Israel would have received from the pipeline deal. Although the document did not appear to contain any new damaging evidence against Mr Meese, it clearly implicated Mr Peres and could prove embarrassing to Israel. Under the Foreign Corrupt Practices Law, payments to foreign political parties are prohibited. The law specifically says the Attorney-General may take legal action to stop a violation when it appears the law may be

broken. The State Department had argued that the diplomatically sensitive memorandum should be kept secret, but the White House concluded it should be released. Mr Wallach was representing a wealthy Swiss oilman, Bruce Rappaport, who had been assured Israel would not bomb the pipeline while it was being constructed, according to the memorandum. The deal later collapsed and the pipeline was abandoned. “He (Rappaport) confirmed the arrangement with Mr Peres to the

effect that Israel will receive somewhere between SUS6S and SUS7O million a year for 10 years out of the conclusion of the project,” according to the memorandum. “What was also indicated to me, and which would be denied everywhere, is that a portion of those funds will go directly to Labour,” according to the memorandum that was marked for Mr Meese’s eyes only. The memorandum did not say who would make the payments to Israel.