Rumsfeld, who arrived here Sunday on a two-day visit, issued a statement about the findings of the Pentagon's inspector general, saying it "confirms the integrity of the Defense Policy Board and Mr Perle's participation."

Perle stepped down as chairman of the board March 26 following allegations he had been hired by Global Crossings to win the Pentagon's approval of the sale of the bankrupt telecommunications firm to Hutchinson Whampoa, a Hong Kong firm with ties to China.

"The inspector general, after a six-month investigation, has found that Mr. Perle's activities 'complied with statutory and regulatory standards that have been estalished for indiviuals (such as the chairman and members of the Defense Policy Board) who serve as special government employees," Rumsfeld said.

"The inspector general determined that Mr. Perle's activities 'did not create ... an appearance' of 'violating conflict of interest statutes or DoD (Department of Defense) ethics regulations' within the meaning of the Joint Ethics Regulation," he said.

A senior US defense official, who asked not to be identified, said it was unlikely that Perle would be renamed to the chairmanship of the board, a post now held by former Florida congresswoman Tillie Fowler.

Although he resigned as chairman of the board, Perle has remained a member of the prestigious group, which advises Rumsfeld on defense issues.

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