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Fbi Probing Two Israeli Companies for Possible Ties with Navy Official

July 12, 1988
See Original Daily Bulletin From This Date

The Federal Burean of Investigation is probing two Israeli companies for possible ties to Melvyn Paisley, a former Navy official who has been implicated in the current U.S. military procurement scandal.

The companies, Mazlat Ltd. and Pocal Industries, were listed on a search warrant that gave the FBI authority on June 14 to seize evidence from Paisley’s home in McLean, Va. The Israeli companies are the only foreign ones among 11 cited in the warrant.

Sam Reich, president of Pocal Industries in Scranton, Pa., said in a telephone interview that he was “very surprised” that his company’s ties to Paisley are being investigated.

He said Pocal is a small company, with about 50 employees, adding that “we never, never had any commercial or any business relationship” with Paisley.

The New York Times quoted the warrant as seeking evidence that Paisley, an assistant secretary of the Navy from 1981 to 1987, has worked for Pocal or helped it obtain contracts.

Another of the 11 companies being investigated is Martin Marietta Ordinance Systems Inc., which recently placed a Pentagon bid along with Pocal and its larger Israeli affiliate, Soltam Ltd. of Haifa, to build 120mm mortars.

The U.S. Army awarded that contract to those companies April 1.

The Times said the warrant indicated that Paisley may hold a financial interest in Mazlat, an offshoot of Israel Aircraft Industries and Tadiran Ltd. An Israel Aircraft Industries official in Arlington, Va., and a Tadiran official in New York declined comment Monday.

AAI Corp. of Cockeysville, Md. was awarded a Navy contract in 1985 to build the Pioneer, a remotely piloted drone plane, and subcontracted work to Mazlat, AAI spokesman Walter Friend said Monday.

The Times said a competitor charged after the contract was awarded that the bid specifications had been tailored to favor Mazlat.

Friend said he has “heard that there is one competitor that is talking that way or did talk that way.” But he added that he could not speak for Mazlat, except to say that AAI Corp. has “had no association with Mr. Paisley.”

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