may plead guilty, testify against ByBARRYKALB Washington Star-News W A S H I N G T O N _ Texas lawyer Jake Jacobsen, indicted Monday with f o r m e r Treasury Secretary John B. Connally in an alleged bribery plot, will probably plead guilty in the case and go on to testify against Connally, according to i n f o r m e d sources. The c h a r g e a g a i n s t Jacobsen, one count of IVj'xon didn't giving an illegal payment to a government official, conforms with the deal Jacobsen's lawyers tentatively struck last spring with the Watergate special prosecutor. The plea, if it takes pjace, will complete the deal. This poses a threat to Connally, since the all e g e d l y illegal transactions involved in the indictment took place between the two men, and the indictment indicates that the prosecutors are. relying heavily on Jacobsen's version of events. U.S. D i s t r i c t Judge George L. Hart Jr. has scheduled Jacobsen's arraignment for Aug. 7. C o n n a l l y , w h o w a s c h a r g e d by a special Watergate ' g r a n d j u r y with two counts of accepting an illegal payment, one count of conspiracy to commit perjury and obstruct justice and two counts of l y i n g u n d e r oath, is due to be arraigned Aug. 9. The charges resulted from the prosecutor's ongoing investigation into allegations that campaign donations by some of the nation's l a r g e s t m i l k - p r o d u c i n g cooperatives led the Nixon administra- .tion to reverse itself in March 1971 and raise the federal milk price support level. Connally, who was treasury secretary at the time, played a prominent role in that controversial decision. After the return of the . indictment Monday, Conn a l l y denied the allegations in a statement from his Houston law office. The charges involve $10,000 in caslythat Jacobsen solicited in the spring of 1971 from Bob A. Lilly, a lobbyist for the Associ- ated Milk Producers, Inc., the largest of the milk producing cooperatives. Lilly testified before the grand jury last fall that Jacobsen told him the money was to go to Connally in return for favors he had done for the milk producers. P r i o r to that transaction, on March 25, 1971, the administration had announced t h a t it was raising the federal milk price support level from $4.66 to $4.93 per hundred pounds. The price support is the f e d e r a l government's way of keeping milk prices at a given level, largely through the purchase of dried milk. At a March 23, 1971, meeting among the President and some of his lop advisers, Connally made a strong pitch for the milk producers. According to the indictment, Jacobsen gave Connally the $10,000 he had received from Lilly in two $5,000 installment?, on May M and Sept. 24,-1971. Jacobsen, who is a former J o h n s o n assistant, was charged in one count of g i v i n g Connally the $10,000. C o n n a l l y was charged w i t h two separate counts of receiving payments of $5,000 each. On Feb. 21, Jacobsen was charged in another indictment w i t h l when he said the money had been kepi in the safe deposit box. It was later learned the FBI had discovered that some of the bills in the box were not in circulation at the lime Jacobsen said they were put there. On May 3, thai indictment was dismissed on technical grounds, leaving Jacobsen free to bargain with the prosecutors.