Final Accounts

Transition books are opened

The details of two funds were surrounded by mystery for more than three years. It gradually became known that they had raised and spent roughly $1 million, mostly in money from private donors, to smooth the transition from the Carter to the Reagan Administration. But the General Accounting Office, an arm of Congress, was refused access to the books. Leaks about who got how much from the funds appeared; White House aides reportedly quarreled among themselves about how much to disclose and when Jacob Stein, the special prosecutor who is looking into the financial affairs of Presidential Counsellor Edwin Meese, asked for a copy of an audit by the accounting firm of Arthur Andersen & Co., and the funds' lawyers finally released it last week. It pointed to no apparent illegalities. The audit, however, did present some intriguing bits of information that might inspire some new questions at any further Senate hearings on the nomination of Meese for Attorney General.

The two operations were the Presidential Transition Foundation, which spent $939,667, and the Presidential Transition Trust, which laid out $192,198. Those expenditures supplemented the $2 million that the Government made available to finance the transition. Donations for both funds were collected largely by Daniel J. Terra, a major Republican money raiser who is now President Reagan's Ambassador-at-Large for Cultural Affairs. Terra told prospective donors in one letter that the money would be used partly to pay expenses of transition workers that would not be reimbursable from the federal treasury but would be considered proper in private business.

The audit disclosed that the stubs of five checks issued by the trust had been altered. The checks apparently were written initially to cover "moving expenses," but that notation was blacked out and changed to "consulting fees." The recipients: Meese, Deputy White House Chief of Staff Michael Deaver and Administration Personnel Director E. Pendleton James, who got $10,000 each; Interior Secretary William Clark, who got $9,942; and Helene von Damm, Ambassador to Austria, who received $2,000.

Why the change? One source says that payment of moving expenses might be challenged under a law that bans any supplement to the salaries of Government employees from private sources, but payment of consulting fees raised no such problem. Other sources argue that reimbursement of moving expenses was legal, but the resources of the funds could have been strained if many other officials demanded the same perk.

Another question is why Meese did not list the trust on the financial disclosure form he filed in 1981 among the sources from which he received more than $5,000 (he did identify the foundation, which paid him $14,085). An associate says Meese, for simplicity's sake, ignored the "proliferation of names" among the many campaign and postcampaign organizations, but he did include both payments in $59,940 listed as "income from law and consulting practice." Generally, all the payments from the transition funds would be legal so long as the recipients reported them to the Internal Revenue Service and paid taxes on them.

Some other notable payments:

> The biggest single disbursement, $86,047.93, went to the law firm headed by Joseph Califano, an ardent Democrat and member of the Carter Cabinet. Califano says the payment covered his fee and expenses incurred in representing Alexander Haig, an old friend, at the Senate hearings that led to Haig's confirmation as Secretary of State.

> Deaver got $8,041 and James $5,781 from the foundation, in addition to the $10,000 that each received from the trust.

> James Baker, now White House Chief of Staff, was virtually cut out of the action: he was paid a scant $464 for "telephone reimbursement.''

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In another matter affecting Meese, Democratic Congresswoman Patricia Schroeder of Colorado charged last week that Government officials created a job for Gretchen Thomas. She is the wife of a former Meese aide who made a $15,000 loan to the Presidential Counsellor's wife that Meese failed to disclose. Thomas' employer: the San Francisco office of the Merit Systems Protection Board, which is supposed to guard against favoritism in the hiring and promotion of Government employees. Schroeder demanded that Board Chairman Herbert Ellingwood resign. qed