Pentagon Adviser Is Also Advising Global Crossing
"Mr. Perle, who as chairman of the Defense Policy Board
has been a leading advocate of the United States' invasion of Iraq,
spoke on Wednesday in a conference call sponsored by Goldman Sachs,
in which he advised participants on possible investment opportunities
arising from the war. The conference's title was "Implications of an Imminent War:
Iraq Now. North Korea Next?"
The New York Times
March 21, 2003
nytimes.com
By STEPHEN LABATON
WASHINGTON, March 20 - Even as he advises the
Pentagon on war matters, Richard N. Perle, chairman of the influential Defense Policy
Board, has been retained by the telecommunications
Company Global Crossing to help overcome Defense
Department resistance to its proposed sale to a foreign firm,
Mr. Perle and lawyers involved in the case said today.
Mr. Perle, an assistant defense secretary
in the Reagan administration, is close
to many senior officials, including Defense Secretary Donald H.
Rumsfeld, who appointed him to lead the policy board in 2001.
Though the board does not pay its
members and is technically not a government agency,
it wields tremendous influence in policy circles.
And its chairman is considered a "special government
employee," subject to federal ethics rules, including
one that bars anyone from using public office for private gain.
Mr. Perle and his lawyer said yesterday that his involvement
with Global Crossing did not violate the ethics rules.
According to lawyers involved in the review and a legal notice
that Global Crossing is preparing to file soon in bankruptcy court,
Mr. Perle is to be paid $725,000 by the company, including $600,000
if the government approves the sale of the company to
a joint venture of Hutchison Whampoa, controlled by the Hong Kong
billionaire Li Ka-shing, and Singapore Technologies Telemedia,
a phone company controlled by the government of Singapore.
Lawyers said today that Mr. Perle had
been helping Global Crossing for several weeks.
They said he was brought in as a prominent Republican with
close ties to the current officials.
He has taken on a particularly important role, they said,
since the company recently pulled back its request for the
government to clear the sale in the face of opposition from
the Defense Department and the Federal Bureau of Investigation.
Those agencies have said that the proposed deal presents national
security and law enforcement problems, because it would put Global Crossing's worldwide fiber
optics network - one used by the United States government - under Chinese ownership.
Mr. Perle and his lawyers were preparing to file
an affidavit dated March 7 and a legal notice dated today,
March 20, that said he was uniquely
qualified to advise the company on the matter
because of his job as head of the Defense Policy Board.
But after a reporter raised questions today about whether
Mr. Perle was using his job at the Defense Policy Board
for the benefit of a client, they
said the references to his job should not have been
in the legal papers and would be deleted before
they were filed in the bankruptcy proceeding.
In the March 7 affidavit, Mr. Perle said,
"As the chairman of the Defense Policy Board,
I have a unique perspective on and intimate knowledge of the national
defense and security issues that will be raised by the CFIUS review
process that is not and could not be available to the other CFIUS
professionals." The company used similar language in its legal notice.
CFIUS refers to the Committee on Foreign Investment in the United States,
a government group that includes representatives from the Defense Department
and other agencies. It has been considering the deal and has the power
to block it. "CFIUS professionals" refers to the other lawyers
and lobbyists who have been trying to get the committee to approve the deal.
Mr. Perle, in an interview late this afternoon, said that he had not noticed
the language in the affidavit and that it was an erroneous reference
because the Defense Policy Board has nothing to do with reviewing
the sale of American companies to foreign investors.
"It was drafted by the lawyers, and I frankly didn't notice it," he said.
Shortly after that interview, Mr. Perle called back and said
that he remembered that the language concerning the Defense Review Board had
appeared in an earlier draft of the affidavit and that he had struck it out
because it was incorrect.
"You have a draft that I never signed," he said.
After consulting with a company lawyer, Mr. Perle called back
and in a third conversation said that he had taken the phrase out of the affidavit
"because it seemed inappropriate and irrelevant" but that someone
put it back in the document and he signed it without noticing it.
"This was a clerical error, and not my clerical error," he said.
An adviser involved with one of the parties in the case
said tonight that Mr. Perle had not read the affidavit closely
and that he had, in fact, signed it but that it would be changed before it was filed.
Mr. Perle said he did not seek an ethics opinion as
to whether he could work on the Global Crossing matter, because he said it posed no legal
problems.
"I've abided by the rules," he said. "The question, I should think,
is have I recommended anything to the secretary or discussed this with the
secretary, and I haven't," he said, referring to Mr. Rumsfeld. "The
alternative is if you are on the board, you can't have any action before
the Defense Department. That isn't the rule. If that were the rule,
I'd have to make a choice between being on an unpaid advisory board and my business."
Mr. Perle said that he was not engaged in lobbying with
senior officials at the Defense Department and that his role was to advise Global Crossing
on the process of gaining approval. He said his sole discussions
with Pentagon officials had been over what assurances they
would need to satisfy themselves that a deal would not pose any national security problems.
"I'm not using public office for private gain because the
Defense Policy Board has nothing to do with the CFIUS process," he said.
But other lawyers and advisers to the companies involved in the deal
said that Mr. Perle had been brought in precisely because
he has access to top officials. They noted that Mr. Perle's fee
was largely contingent on the deal's being approved, an
unusual arrangement in Washington legal circles.
And they noted that he was retained after Global Crossing,
which has a history of using well-connected lobbyists, had realized that many of the
other lawyers and lobbyists had strong Democratic ties but no solid Republican ones.
Among others who have been retained to gain approval of
the proposed deal are Thomas F. McLarty III, the former Clinton
chief of staff; Stuart E. Eizenstat, a former deputy Treasury secretary,
and lawyers at Skadden, Arps, Slate, Meagher & Flom and Dewey Ballantine.
Mr. Perle, who as chairman of the Defense Policy Board has been
a leading advocate of the United States' invasion of Iraq, spoke on Wednesday
in a conference call sponsored by Goldman Sachs, in which he advised
participants on possible investment opportunities arising from the war.
The conference's title was "Implications of an Imminent War: Iraq Now.
North Korea Next?"
nytimes.com
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