-Caveat Lector-
Perle Article Didn't Disclose Boeing Tie
By David S. Hilzenrath Pentagon adviser Richard N. Perle coauthored an opinion piece this summer
praising a Pentagon plan to lease tanker aircraft -- which had the potential to
steer billions of dollars to Boeing Co. -- 16 months after Boeing committed to
invest $20 million with a venture capital firm where Perle was a principal. "It takes a special government green-eyeshade mentality to miss the urgency
of the tanker requirement," Perle and a coauthor wrote in the Aug. 14 article in
the Wall Street Journal. The piece did not mention Boeing by name or Perle's
firm -- Trireme Partners -- and its business relationship with the giant defense
contractor. Perle's business interests and his position in the defense policy world have
repeatedly placed him at the center of controversy this year. Perle, an
outspoken advocate of the war in Iraq, was a Pentagon official in the Reagan
administration and has been a corporate consultant. The Wall Street Journal editor who handled the article was not available for
comment, "but normally we would rely on the contributor to tell us if they have
any financial conflicts of interest because we do like to disclose these
things," said Brigitte Trafford, a spokesman for Dow Jones & Co., which
publishes the newspaper. Boeing yesterday said the company briefed Perle on the tanker issue on July
14. Boeing said it "had no hand in writing the document nor did we assist in
placing it." In March, Perle resigned as chairman of the Defense Policy Board after press
accounts raised questions about his actions on behalf of Global Crossing and
Loral. He remains a member of the policy board, a group of former government
officials and others that advises the Pentagon. Perle also serves on the board of directors of Hollinger International Inc.,
the media company whose chief executive, Conrad Black, resigned last month after
disclosures that he and other executives collected millions of dollars payments
the company's audit committee determined were unauthorized. Hollinger disclosed last month that it has invested $2.5 million in Trireme
Associates. A special committee of Hollinger's board is examining that
investment and others involving company insiders, a source close to Hollinger
said yesterday. Perle has not responded to requests this week for an interview on his
business activities. Messages left at his office late yesterday were not
returned. His coauthor, Tom Donnelly, was traveling and could not be reached for
comment. The Financial Times last night on its Web site quoted Perle as saying "I
never discussed the tanker issue or my views on the tanker issue with anyone at
Boeing that had anything to do with Trireme." The Pentagon put the $17 billion Boeing tanker deal on hold this week while
its inspector general investigates whether the procurement process was handled
properly. The company last week fired two executives, including a former Air
Force procurement official, for allegedly violating company policies. Amid the
controversy, Boeing chief executive Philip M. Condit resigned Monday. Defense Secretary Donald H. Rumsfeld named Perle to the policy board in 2001.
Later that year, Trireme Partners, a venture fund, was set up in Delaware. Trireme Partners first sought an investment from Boeing in February 2002, and
the company decided to invest $20 million two months later, Boeing said in a
written statement this week. To date, it has advanced $2 million to the fund,
the statement said. Gerald Hillman, another principal, represented Trireme, and Perle was not
involved in the discussions to obtain the Boeing investment, Boeing said. Perle
holds an equity stake in Trireme Associates LLC, which is the general partner of
Trireme Partners and receives a share of its profits, according to documents
Hollinger filed last month with the Securities and Exchange Commission. "There's no connection between these two matters," Hillman said last night of
Boeing's investment with Trireme and Perle's op-ed piece. A memorandum Trireme gave Boeing describing the fund included brief
biographies of the principals, including Perle and Hillman, Boeing said. It
noted that Perle is "Chairman of the Defense Policy Board and a consultant to
the Department of Defense," Boeing said. Boeing "also received a letter early in the process with Trireme that also
mentioned that Richard Perle is (was) chairman of the DPB," Boeing said. Trireme's fund is one of 29 venture capital funds to which Boeing has
committed a total of about $250 million, the aerospace company said. The Defense Department's inspector general investigated several of Perle's
business activities for alleged conflict of interest or misuse of public office
and reported last month that the inquiry did not find violations of applicable
standards. The investigation found "insufficient basis to conclude that Mr.
Perle created the appearance of impropriety from the perspective of a reasonable
person," the report said. For example, the inspector general confirmed that Perle contacted a State
Department official on behalf of Loral, but found that Perle "did so in his
private capacity and did not mention or invoke" his position on the advisory
board and therefore did not misuse his position. Perle inquired about Loral's requests for licenses to deliver satellites to a
Chinese buyer, the report said. Certain restrictions did not apply to Perle because as chairman of the policy
board he served the government only about eight days a year instead of the
threshold of 60 days, the report said. Researcher Richard Drezen contributed to this report.
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