Criminal Charges Expected Soon Against Former Reagan Aide Stockman

Mar 21, 2007 6:24pm

Securities fraud charges are expected to be made public as soon as next Monday against former Reagan White House Budget Director David Stockman, officials involved in the investigation tell ABC News. The Blotter on ABCNews.com reported last year that Stockman, famed for his role in developing what is known as Reaganomics, was under criminal investigation for alleged illegal accounting and disclosure practices at a now bankrupt Michigan auto parts company, Collins and Aikman, where he served as chairman and CEO from 2002 to 2005. Officials said Stockman is expected to surrender to federal marshals next week. Stockman’s lawyers have insisted their client had done nothing wrong. A civil lawsuit filed by investors claims Stockman and other executives made "false and misleading statements" and artificially inflated the company’s stock prices between May 2004 and March 2005.  The company filed for bankruptcy in May 2005. Click Here for Full Blotter Coverage. Stockman was one of the youngest and most outspoken members of the Reagan administration. His criticisms of Reagan’s economic policies in a 1981 interview by William Greider in "The Atlantic Monthly" magazine led Reagan to say he had taken young Stockman "to the woodshed" but did not fire him. He later wrote a controversial memoir, "The Triumph of Politics — Why the Reagan Administration Failed." After he left the government, Stockman established a private equity company, Heartland Industrial Partners, which invested in depressed Detroit companies, including Collins and Aikman. A spokesman for Collins and Aikman, which is still operating under Chapter 11 bankruptcy protection, declined to comment to ABC News. In August, the company acknowledged receipt of subpoenas from the federal grand jury and said it had turned over similar material to the SEC. The company also said it was conducting its own internal investigation.

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