Atty. Gen. Meese Resigns : Says He’s Been Cleared and Leaves With Clean Name : Acts After Prosecutor Files Report

SACRAMENTO —  U.S. Atty. Gen. Edwin Meese III announced today that he will resign at the end of July or in early August.

He told a news conference that an independent prosecutor investigating his personal financial affairs had found no grounds for legal action against him and therefore he could leave the Reagan Administration with a clear name.

“I have stated that I would not resign under a cloud or until I was completely vindicated,” Meese said, adding that the filing of a report by independent counsel James McKay--rather than an indictment--”fully vindicates me.”

Meese’s tenure at the Justice Department has been marked by repeated controversy surrounding his conduct and marred by resignations by senior personnel.

Won’t Be ‘Hounded’

Explaining why he had now decided to resign, Meese, who has always maintained his innocence, declared, “to allow myself to be hounded out of office by false accusations or allegations, unjust political attacks and media clamor would undermine the integrity of our system of justice which I have championed. . . . “

He said: “I have informed the President that I will be leaving the Administration towards the end of July or early in August.”

Earlier today, McKay ended his investigation of Meese without bringing criminal charges, but filed a report that raised questions about Meese’s ethics.

Sources close to the nearly 14-month-old probe said the secret report, totaling more than 800 pages, referred certain matters on Meese’s ethical behavior to the Justice Department for further review.

The department’s Office of Professional Responsibility, the agency’s internal ethics unit, is expected to review whether Meese violated federal ethics rules that prohibit actions that create the appearance of impropriety.

Allegations Detailed

McKay, who previously said he had insufficient evidence to indict Meese on most key matters under scrutiny, detailed in the report his probe into various conflict-of-interest charges against the attorney general.

It was filed under seal with a special panel of three federal appeals court judges. After Meese’s defense attorneys comment on the report, the judges will decide when to release it.

Meese, the nation’s top law enforcement officer who had President Reagan’s continued support throughout the inquiry, has denied any wrongdoing.

Most of McKay’s investigation centered on action Meese took as a government official that benefited his longtime friend and former lawyer, E. Robert Wallach, and on assistance that Wallach extended to Meese.

Wallach has been indicted on charges of attempting to illegally influence Meese and other government officials in helping win lucrative government contracts for the scandal-plagued Wedtech Corp., a defense contractor.

The most serious charge against Meese involved his role in a failed Iraqi oil pipeline deal that allegedly called for payoffs of as much as $700 million over 10 years to Israel and the Israeli Labor Party.

Meese received a secret 1985 memo from Wallach, who represented one of the project’s promoters, outlining the alleged payoff plan in return for an Israeli commitment not to attack the pipeline.

Meese then helped set up a meeting between a top White House national security adviser and former Israeli Prime Minister Shimon Peres to discuss the project.

Telephone Contacts Probed

McKay also investigated Meese’s meetings with regional Bell Telephone company executives while holding $14,000 in phone stock.