COURT NAMES PROSECUTOR IN DONOVAN PROBE
A three-judge court today named Leon Silverman, a New York attorney and former Justice Department official, as special prosecutor to investigate whether Labor Secretary Raymond J. Donovan sanctioned illegal payoffs as a private businessman in 1977.
Silverman, appointed by a panel composed of three US Court of Appeals judges, is the first special prosecutor to be named in the Reagan Administration . He will examine allegations that Donovan, while an executive of a New Jersey construction firm, was present when another officer of the company handed an envelope containing $2000 to the head of Local 29 of the Laborers' International Union.
The charge came from Mario Montuoro, a former official of Local 29. Donovan at the time was executive vice president of the Schiavone Construction Co. of Secaucus, N.J.
Donovan last week called a news conference to denounce Montuoro as a "damnable and contemptible liar" and disclosed he had asked Atty. Gen. William French Smith to have a special prosecutor appointed.
The department said after Donovan's statement that Smith already had decided independently to have the special prosecutor appointed under the 1978 Ethics in Government Act.
Donovan welcomed Smith's decision as a way "to prove the falsity of the allegations once and for all."
Under the act, a special prosecutor must be appointed if the Attorney General finds that allegations against a high government official are not frivolous.
In the Carter Administration, special prosecutors investigated White House staffers Hamilton Jordan and Tim Kraft on charges concerning the use of cocaine and cleared them both.
Donovan has said he would remain on the job during any investigation, and President Ronald Reagan has said he does not think it necessary for Donovan to step down.
Silverman is senior litigation partner in the firm of Fried, Frank, Harris, Shriver and Jacobson in New York City.
He was an assistant US attorney in New York from 1953 to 1956 and served as an assistant deputy US attorney general in 1958-59. He is president-elect of the American College of Trial Lawyers and is a registered independent voter, the court's announcement said.