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Ursula Meese, wife of Edwin Meese, insists her husband...

WASHINGTON -- Ursula Meese, wife of Edwin Meese, insists her husband has 'done nothing wrong,' is being unjustly accused and should not bow to suggestions that he withdraw his nomination as attorney general.

'I think this kind of thing happening to a man of such integrity as my husband undermines the trust that people have in government,' she said, reacting to the barrage of allegations against Meese during a taped interview with ABC's Barbara Walters on '20-20' aired Thursday evening.

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Asked whether the prolonged inquiry would hurt President Reagan, she said, 'I think it would hurt much more if, as some people have advocated, that Ed withdraws, because then you withdraw with a real question.'

'The president is going to stand by him,' she added. 'It is an act of honor to stand by someone unjustly accused in public service.'

Mrs. Meese's acceptance of a $15,000 interest-free loan from a friend who later got a political job in the administration has been one of the key questions raised about the Meeses finances because it was not listed on a financial disclosure form until Meese amended it this year.

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The Justice Department has gone along with a request from Meese, Reagan's White House counselor, that it seek a court-appointed special prosecutor to look into all allegations against him. They include questions about the loan, his financial dealings in general, his promotion in the Army reserves and his knowledge of how the 1980 Reagan campaign obtained information from the Carter camp.

It was revealed Thursday that Meese kept a pair of jade and gold cuff links valued at $375 he received from South Korea last year against federal law and also failed to report it on his financial disclosure statement.

Meese and presidential spokesman Larry Speakes both turned in pairs of the cuff links this week to White House Counsel Fred Fielding after CBS New asked questions about the jewelry, a White House aide said. Both Meese and Speakes said they were not aware the gifts exceeded the government limit of $140.

Under federal regulations, officials have 60 days to donate to the National Archives any gifts from foreign governments worth more than that amount.

In a separate interview published in today's editions of The Washington Post, Mrs. Meese, 52, said when she first heard of the cuff-links affair it was billed on an early morning broadcast as 'new revelations on Ed Meese.'

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'And you know, you wait, and I think, 'My God, he's got three wives and two other children. What is going on?''

After learning what the revelation was, Mrs. Meese said, 'He doesn't even wear cuff links. I was greatly relieved. They weren't even opened.'

Mrs. Meese also told Post, 'We're at a point now where it is important we stay here. Certainly it is important to clear the name because there is no more honorable man than Ed Meese. We are not people who run away from our problems.'

She was also critical of media coverage, of reporters and television crews camped out on her front lawn for days. 'You know, they scavenge through our garbage,' Mrs. Meese said, the Post reported, and she complained about close coverage of the Meese family going to church.

'You should never feel uncomfortable about going to church but when you have photographers there filming you when you leave ... it's not a comfortable life. Nobody should have to live that way.' The mounting allegations against Meese have stalled his confirmation in the Senate Judiciary Committee.

'We want people to believe in what we're doing and to believe in us,' Mrs. Meese said.

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Mrs. Meese, who has been recovering from grief over the death of their 19-year-old son, Scott, in a car accident in July 1982, said she and her husband have asked themselves 'time and again how this all happened.'

'We've done nothing wrong. It's difficult to know how this all happened,' she said. 'It was several small incidents that were all put together and sort of snowballed -- and separate and apart. And once the facts are known, we'll find that there was nothing wrong, nothing done that was wrong.'

The Justice Department has been investigating Meese's failure to report on his financial disclosure statement the $15,000 loan that she received in late 1980 from close friend Edwin Thomas, her husband's former deputy. She later used the money to invest in stock for her children's education.

Asked why her husband failed to report the $15,000, Mrs. Meese said, 'Well, you have to understand the circumstances. We had to do the financial statement 30 days after we arrived in the office' in January 1981. Those were hectic times.'

She said she had not solicited the loan.

'It was just an opportunity that Ed Thomas said he was doing for his kids (our children are about the same age) and he thought it was a good deal.

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'And he said, 'You should get into it,'' she recalled.

'We put it in the children's names. We never got a dividend ... you know.' The stock was eventually sold at a loss.

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