Taint in the Justice Department

ASSISTANT Attorney General Will Wilson boasts a distinguished 25-year career fighting crime and corruption. He first made his mark as a district attorney in Dallas, then rode his rackets-smashing reputation to two terms as Texas attorney general. There he burnished his image as a tough prosecutor and in 1960 was chosen the nation's outstanding state attorney general by his peers. When President Nixon appointed Wilson to head the Justice Department's Criminal Division, the choice of the Texas Democrat-turned-Republican was considered a natural one. In 21 years at the Justice Department, Wilson has lived up to his reputation, launching unparalleled attacks on organized crime and political corruption. But now an episode from the past threatens to end his public career.

During six years spent in a law firm in Austin, Wilson was the principal attorney of Banker-Land Developer Frank Sharp. Sharp pleaded guilty earlier this year to federal fraud charges and, in testimony before Securities and Exchange Commission investigators, implicated Wilson in some of the business deals that preceded his downfall. The massive swindle masterminded by Sharp is the biggest Texas fraud case since Billie Sol Estes' capers of a decade ago. Sharp's manipulations have cost a Jesuit preparatory school $6,000,000, pushed two insurance companies into receivership, and led to the first bank failure in Houston's history.

Twisted Affairs. Wilson issued a statement last week explaining his relationship with Sharp and denying any wrongdoing. But new information has come to light that could have more serious repercussions. TIME has learned that Wilson paid for the installation of eavesdropping devices used against federal and state bank examiners investigating irregularities in the Sharp-controlled Sharpstown State Bank.

The incident occurred in late 1967 when bank examiners were beginning to delve into Sharp's twisted financial affairs. The electronic bugs were concealed in offices used by the examiners poring over the Sharpstown State Bank's books. They were installed for a $2,500 fee by an electronics expert hired by Sharp. Wilson was then called by Joe Novotny, president of the bank, and told to pay the fee through his law firm. A memorandum Wilson wrote and initialed for his records on Nov. 6, 1967, detailed the transaction: "I received a telephone call from Joe Novotny and he said they had a bill for some construction work that they did not want to run through the books and that he preferred not to tell me why but that it was all right. They wanted me to send them a statement and they would send me $2,500 as a fee and for me to pay the bill. I told him I would."

Paid for Bugs. Wilson received a bill for $2,500 on the letterhead of Construction Consultants, Inc.; the charge was described as a "consulting fee." The bill was paid, and Wilson billed Sharp for $2,500 in "legal services." In an interview with TIME Correspondent Dean Fischer, Wilson said that he had no idea that the fee was for the bugging devices. Wilson did not question the request from Novotny: "I trusted those people. As it turned out, I was a patsy." Technically, Wilson did not break the law when he paid for the bugging. Texas has no law against eavesdropping, and the incident took place before passage of the 1968 federal Omnibus Crime

Control Act made eavesdropping by private individuals illegal. Nonetheless, Wilson did play a part in breaching the security of official investigations.

According to Sharp, who was given a $5,000 fine and put on probation in exchange for testifying against his cronies -many of whom are key Democratic politicians-Wilson was involved in other Sharp deals. Sharp says that Wilson advised him to circumvent state banking regulations that set a limit on the amount an individual can borrow. Wilson denies it.

At Sharp's urging, Wilson also bought 1,000 shares of stock in another Sharp corporation for the wife of a bank examiner involved in the investigation of the Sharpstown State Bank. Since the examiner did not have a stock broker, Sharp asked Wilson to make the purchase through his Austin broker; Wilson complied. He says that he did not know who Sharp's client was. Why he did not recommend a broker or why Sharp did not handle the roundabout transaction, Wilson has not explained.

Records at the Sharpstown State Bank show that since 1964 Wilson has borrowed $297,100 from the now-defunct bank. The most recent financial transaction between Wilson and the bank took place 1 1/2 years after Wilson became Assistant Attorney General. A year ago, Wilson received a $30,000 unsecured loan. He has enjoyed a line of credit at the bank ranging from $50,000 in 1964 to a high of $200,000 in 1967, though that is not unusual for a man of Wilson's assets ($1.3 million).

Although the disclosures in the Texas scandal have not yet uncovered any illegal behavior on Wilson's part, it is unlikely that he can continue as head of the nation's most prestigious crime-fighting body. The White House has expressed confidence in Wilson in the past, but in the wake of the eavesdropping revelations, he is likely to resign.

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