When Melvyn R. Paisley resigned from his Navy job in April 1987 and set up shop in downtown Washington as a consultant, he didn't have to wait long before some of the nation's largest defense contractors were lining up to hire him.
Paisley was selling information, a commodity much in demand among the various companies seeking any edge they could get in the high-stakes world of selling multimillion-dollar weapons to the Pentagon.Paisley has become a major target in the nationwide investigation of possible corruption involving contractors and defense officials.
Paisley, 63, has also been a key player in President Reagan's naval buildup, which was at the heart of the record defense splurge during the president's first term in office.
When Reagan took office in January 1981, he moved to keep his campaign pledge to "re-arm America," and his new Navy secretary, John Lehman, was a major figure. Lehman led the fight for large increases in the Navy budget, seeking the goal of a 600-ship Navy.
Lehman also hired Paisley away from the Boeing Co. to become assistant Navy secretary for research, engineering and systems. Paisley, a native of Portland, Ore., had worked at Boeing for 28 years and held a number of top-level management positions. Before taking the Navy job, he retired as manager of international operations for Boeing's Space and Information Division.
Paisley's appointment was controversial. His final payment from Boeing was $183,000 and critics said there was an inherent conflict of interest because Boeing is a Navy supplier.
In July 1986, the Justice Department sued Paisley and four other top Boeing officials, arguing that their severance payments created a conflict of interest.
On Feb. 17, 1987, two months before Paisley left office, U.S. District Court Judge Claude Hilton of Alexandria, Va., ruled for Paisley and the other four defendants. Paisley's comment was "it's a relief after five years of this problem . . . to get rid of it."
But the case isn't over. Hilton's decision was overturned by the 4th U.S. Circuit Court of Appeals in Richmond, Va., which declared that the Boeing payments "created the appearance of conflict of interest." Paisley and the other defendants are seeking to have the decision reconsidered.
While he was at the Pentagon, Paisley joined forces with his boss, Lehman, and Everett Pyatt, assistant Navy secretary for shipbuilding. The trio fought hard, both inside and outside the Navy, to preserve Reagan's buildup of ships.
Paisley was known outside the Pentagon as a raconteur but was a stern taskmaster inside the building. "He didn't like to be opposed, and when he was, he and Lehman didn't let many people get in their way," said one official Thursday, speaking on condition of anonymity.
Paisley's departure from the Pentagon also raised questions, according to former Navy Secretary James H. Webb Jr. Webb said Thursday that when he became Navy secretary in April 1987, he learned that Paisley had just persuaded Navy officials to give him an unusual consulting contract with the research office he was leaving.
The contract also allowed Paisley to maintain his security clearance for information on the military's most secret "black programs," Webb told The Washington Post.
Webb said he canceled the contract before any money on it was paid to Paisley.
Paisley was also involved in the March 1986 decision by Raytheon Corp. to fire former Pentagon official Lawrence Korb from his Washington job with the company, after Korb suggested in a speech that defense spending could be reduced.
Korb had been assistant defense secretary for manpower issues until leaving to join Raytheon in 1985.