"I Made a Big Mistake"

A student uncovers some notes on the Donovan case

For more than two years, Labor Secretary Raymond Donovan and White House aides have denied that they had any contacts with private investigators hired by Schiavone Construction Co. to spy on those who were investigating Donovan's alleged ties to organized crime. The Labor Secretary is a major stockholder and former vice president of the New Jersey firm. Allegations against Donovan have been investigated by a special prosecutor, a Senate committee and a Brooklyn grand jury, none of which accused him of having committed any crime. However, papers found in the files of the construction company's chief investigator raise serious doubts about the denials of any cooperation between Administration officials and Schiavone's private eyes.

The documents, which were examined by TIME, are among the papers obtained from the Schiavone company by Frank Smist Jr., 31, a University of Oklahoma student who is writing a doctoral dissertation on congressional investigations. Smist's air of naivete apparently persuaded Ronald Schiavone, the company's chairman, and Theodore Geiser, its chief counsel, that Smist would consider the Donovan probes an example of investigative abuse. Accordingly, they asked the company's top detective, Robert Shortley, to turn his records over to Smist. Upon reading the papers, the graduate student was appalled by the company's espionage. Smist turned over the documents to the FBI, which has launched a new probe into the activities of the Schiavone detectives.

Shortley admitted to TIME that he did not realize that some confidential memos were stashed among the papers he gave Smist. Among them: a note to Geiser on June 1, 1982, in which Shortley reported, "I met with Ed Hickey on Sunday for several hours. One of the things we talked about was your 'If I were President letter.' " Hickey is a presidential assistant. In that letter Geiser explained that he wanted to advise Reagan what to say when asked about the Donovan case at press conferences. In another note to Schiavone, Shortley proposed "lunch with Ed Hickey, assistant to the President [to] meet with me and him [Geiser] in D.C. to discuss strategy." Hickey refused a request to discuss whether the meetings took place.

The Shortley papers indicate that Donovan, despite his denials of knowing about the work of the Schiavone detectives, apparently had been in touch with the company's top investigator. Shortley noted that he had been assigned to "check out names Ray gave me and be prepared to discuss [at] dinner meeting on 3/22 or thereabouts." Donovan told TIME, through a spokesman, that he has never met Shortley, and did not give him any names of people to be checked out.

The papers obtained by Smist show that one Schiavone detective, Robert Bermingham, was concerned about the legality of the company's snooping into grand jury proceedings. A memo to Shortley from Bermingham, dated June 21, 1982, warned that "a source in New York reported that Schiavone investigators in the New York area are risking becoming involved in obstruction of justice charges."

Shown copies of his papers by TIME last week, Shortley said, "Isn't that awful? I made a big mistake. I feel bad about it." He conceded that "I have lunch with Hickey all the time," but insisted, despite his notes to the contrary, "I never talked about strategy with him." qed