Associates of Bush Aide Say He Helped Win Contract
The New York Times
January 25, 2002
By RICHARD L. BERKE
WASHINGTON, Jan. 24 -
Karl Rove, President
Bush's top political adviser,
recommended the Republican
strategist Ralph Reed to the
Enron Corporation
for a lucrative consulting contract
as Mr. Bush was weighing
whether to run for president,
close associates of Mr. Rove say.
The Rove associates say the
recommendation, which Enron
accepted, was intended to keep
Mr. Reed's allegiance to the Bush
campaign without putting him on
the Bush payroll. Mr. Bush, they
say, was then developing his
"compassionate conservativism"
message and did not want to be
linked too closely to Mr. Reed,
who had just stepped down as
executive director of the Christian
Coalition, an organization of
committed religious
conservatives.
At the same time, they say, the
contract discouraged Mr. Reed, a
prominent operative who was
being courted by several other campaigns, from backing
anyone other than Mr. Bush.
Enron paid Mr. Reed $10,000 to $20,000 a month, the
amount varying by year and the particular work, people
familiar with the arrangement say. He was hired in
September 1997 and worked intermittently for Enron
until the company collapsed.
In interviews today, both Mr. Rove and Mr. Reed said the
contract with Enron had had nothing to do with the Bush
campaign. But Mr. Rove said he had praised Mr. Reed's
qualifications in a conversation about the job with an
Enron lobbyist in Texas.
"I think I talked to someone before Ralph got hired," Mr.
Rove said. "But I may have talked to him afterward."
"I'm a big fan of Ralph's," Mr. Rove said, "so I'm constantly
saying positive things."
But a friend of Mr. Bush recalled a discussion in July
1997 in which Mr. Rove took credit for arranging an
Enron job for Mr. Reed. "Karl told me explicitly of his
concerns to take care of Ralph," this person said. "It was
important for Karl's power position to be the guy who put
this together for Ralph. And Bush wanted Ralph available
to him during the presidential campaign."
Mr. Rove was concerned, this person also said, that Mr.
Reed not have a prominent public role in the campaign
because "Ralph was so evangelical and hard right, and
Karl thought it sent the wrong signal." Another
Republican said: "It was basically accepted that Enron
took care of Ralph. It's a smart way to cut campaign costs
and tie people up" so they do not work for other
candidates.
Mr. Rove's involvement in Mr. Reed's hiring underscores
the close association between Enron and the Bush inner
circle.
"If Karl Rove was partly responsible for him getting the job
at Enron, it illustrates the close relations between the
Bush political world and Enron," said Trevor Potter, a
Republican who is a former chairman of the Federal
Election Commission. "If it was done for the avowed reason
to keep Reed satisfied and out of someone else's political
camp, it illustrates what everyone in the Republican world
has known for years: Enron has been an important source
of political power in the party."
Mr. Potter said Mr. Reed's hiring could have been a
violation of federal election law if it turned out that "it was
a backdoor way of getting him extra compensation for the
time he was spending on Bush activity."
Mr. Reed said he had been hired mostly to help with an
Enron campaign in Pennsylvania to win a central role in
the state's electricity market, which was being
restructured. He said he had had no idea that Mr. Rove or
anyone else had spoken on his behalf.
Mr. Reed, who is now chairman of the Georgia Republican
Party and runs a lobbying and political consulting firm
called Century Strategies, based in Atlanta, said he had
assumed he was being hired by Enron because he was a
well-known political operative. "It was in every newspaper
in America that I had started this firm," he said.
"Everybody knew my background. Heck, my name ID was
50 or 60 percent."
Mark Palmer, a spokesman for Enron, said he had been in
a meeting where company officials discussed hiring Mr.
Reed or James Carville, a prominent Democratic
strategist, for the Pennsylvania campaign. He said he had
never been called by Mr. Rove, although he added, "Karl
may very well have talked to someone else in the
organization."
Of Mr. Reed, Mr. Palmer said, "Ralph was a great help;
he's such a hard-working guy."
Mr. Carville said, and Mr. Palmer confirmed, that Mr.
Carville had been interviewed by Enron in Houston but
had turned down the job that Mr. Reed later accepted. "I
told them that it wasn't the kind of thing I do," Mr.
Carville said. "It was about a deregulation thing."
Around the time that Mr. Reed worked out his deal with
Enron, he made clear to the Bush team that he was
supporting Mr. Bush for president. Mr. Reed once recalled
that at a meeting in 1997, he told Mr. Bush, then the
governor of Texas: "I hope you go. I hope you run. And if
you run, I'll do everything I can to help get you elected."
From then on, Mr. Reed was an unpaid consultant to the
Bush organization, though after the race was well under
way his firm was paid by the campaign for direct mail and
phone banks.
Mr. Reed said today that inasmuch as he had not known
that anyone had spoken to Enron on his behalf, the
contract could not have influenced his decision to support
Mr. Bush. "I was a friend and strong supporter for the
president based on my affection and high regard for him,"
Mr. Reed said. "I was going to be supporting President
Bush regardless."
One Enron official, speaking on the condition of
anonymity, said the company had hired Mr. Reed because
it wanted a big name from politics.
Enron also hired other prominent political consultants.
An Enron official said Frank Luntz, a Republican pollster,
did polling for the company before and after the 2000
presidential campaign, gauging attitudes about
energy-market restructuring in California, among other
issues. Mr. Luntz said today that he worked for Enron in
2000 on energy policy and in 1995 on environmental
policy, but he would not be more specific.
In early 2000, Mr. Reed ran into trouble with the Bush
campaign for lobbying Mr. Bush, who was still governor,
on behalf of the Microsoft Corporation. Mr.
Reed terminated his work for Microsoft after officials from
the campaign complained about it. His firm said then that
it had been concerned about "possible misperceptions" of
the arrangement.
Mr. Rove, who sold roughly $100,000 in Enron stock last
year, months before the company's collapse, said Mr.
Reed was clearly on Mr. Bush's team prior to taking the
Enron job.
"Ralph Reed made it clear right from the beginning," Mr.
Rove said, "that he wanted to be for him, and gave sound
and solid advice in the years running up to the
president's decision to be a candidate."
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