US WILL NAME PROSECUTOR IN DONOVAN CASE
A special prosecutor will be appointed to investigate allegations that Labor Secretary Raymond J. Donovan was a witness to an illegal union payoff while an executive of a New Jersey construction company, the Justice Department announced yesterday.
The prosecutor will be selected by a panel of members of the US Circuit Court of Appeals in Washington.
The announcement came a day after Donovan, denouncing his ] accuser as a "damnable and contemptible liar," publicly called on Attorney General William French Smith to name a special prosecutor.
Justice Department spokesman Tom DeCair said Smith's decision to seek a special prosecutor in the Donovan matter was made before he received Donovan's letter Tuesday asking for one.
Only a few hours before Smith acted in the Donovan case, he announced that he had found no ground for seeking a special prosecutor to investigate another high Administration official, Richard V. Allen, President Ronald Reagan's national security adviser.
Smith said that after a special prosecutor in the Donovan case has been designated, he will make public the results of the Justice Department's preliminary investigation.
In a statement read by spokesman Vernon Louviere, Donovan said yesterday, "As I said in my statement yesterday, the immediate appointment of a special prosecutor is the only way to prove the falsity of the allegations once and for all. I again pledge my full cooperation in all aspects of the inquiry."
Donovan on Tuesday angrily denied allegations from Mario Montuoro, a former officer of Local 29 of the Laborers' International Union, that he had been present when a payoff was made to keep labor peace in his construction firm.
Montuoro has told reporters that Donovan was present at Prudenti's restaurant in Long Island City, N.Y., in the fall of 1977 when an official of Schiavone Construction Co. handed an envelope containing $2000 to Louis A. Sanzo, president of the labor union local. Donovan was executive vice president and part owner of the firm.
"Not only have I never had lunch at Prudenti's restaurant with Mr. Montuoro or Mr. Sanzo, I have never been in Prudenti's in my entire life," Donovan asserted at a hastily called news conference Tuesday.
Donovan said he had no intention of resigning or taking leave while a special prosecutor conducts his investigation. Last week Reagan said at his news conference he did not think it would be necessary for Donovan to step aside if a special prosecutor were named.
Under the 1978 Ethics in Government Act a special prosecutor must be appointed if the Attorney General finds in a preliminary investigation that allegations against a high government official are not frivolous.
Questions were raised about possible ties between Donovan, his company, and organized crime and union corruption during Senate hearings on his nomination last winter, but he persuaded the committee that he was guiltless.