Counsel Cites Court Order : McKay Says Meese Report Was Leaked, Vows Inquiry

WASHINGTON — Independent counsel James C. McKay said Friday that the court order prohibiting any leak of his report on Atty. Gen. Edwin Meese III had been violated and that he would investigate and seek sanctions against those responsible.

Sources who declined to be identified said that a portion of the 830-page report had been leaked to the New York Times. Executives of the newspaper in New York and Washington refused to immediately comment on the matter.

One source said that the paper had acquired the portions of the report made available to Meese’s former lawyer and confidant, E. Robert Wallach. Wallach and his attorney did not immediately return telephone calls.

‘Extremely Serious’

McKay, who did not identify the source of the leak, said he “regards this as an extremely serious development and intends to investigate this matter and seek sanctions against the person or persons responsible for this violation.”

The special three-judge court that appointed McKay authorized him to give portions of his report to individuals who were mentioned in it, so they could have an opportunity to submit rebuttal comments before the report is released by the court. They were given until Thursday of next week to submit such comments.

McKay’s office said those portions were released under a court order requiring that the portions be kept confidential. Any violation of such an order would subject the violator to potential contempt of court penalties, to be determined by the three-judge court, McKay’s office said.

Asked about the possibility of contempt proceedings, appeals court Judge George MacKinnon, head of the panel that appointed McKay, said: “We’d have to evaluate it when the situation developed. . . . Obviously, with the great number of people that are named (in the report), it’s not a great discovery to find that something might have leaked.”

MacKinnon said the panel will proceed with its schedule, which calls for comments to be submitted by people, corporations or foundations named in the report by Thursday. Until at least then, the panel will not release the report publicly, MacKinnon said.

McKay also provided full copies to Meese’s attorneys and to Solicitor General Charles Fried, who for the purposes of this matter is acting attorney general.

Decides Against Prosecution

Earlier Friday, it was reported that McKay concluded that Meese could have been charged in connection with his holdings of $14,000 in regional Bell telephone stock, but he decided against prosecution.

National Public Radio quoted unidentified sources as saying that Meese’s lawyers were told toward the end of the 14-month investigation that, at least technically, McKay determined that Meese could have been charged with two felonies. NPR said it could not determine what McKay’s reasons were for not proceeding with a criminal case.

Nathan Lewin and James Rocap, Meese’s attorneys, declined to discuss the NPR report, saying in a written statement that McKay’s decision not to prosecute Meese “is, in every real sense, a vindication” of the attorney general.