Bush 2000 Adviser Offered To Use Clout to Help Enron
By Joe Stephens
Washington Post Staff Writer
Sunday, February 17, 2002; Page A01
Just before the last presidential election, Bush campaign adviser Ralph Reed offered to help Enron Corp. deregulate the electricity industry by working his "good friends" in Washington and by mobilizing religious leaders and pro-family groups for the cause.
For a $380,000 fee, the conservative political strategist proposed a broad lobbying strategy that included using major campaign contributors, conservative talk shows and nonprofits to press Congress for favorable legislation. Reed said he could place letters from community leaders in the opinion pages of major newspapers, producing clips that Reed would "blast fax" to Capitol Hill.
"We are a loyal member of your team and are prepared to do whatever fits your strategic plan," Reed wrote in an Oct. 23, 2000, memo obtained by The Washington Post.
"In public policy," he wrote, "it matters less who has the best arguments and more who gets heard -- and by whom."
The memo offers a glimpse into the relationship between Enron and the influential conservative, who was first recommended to the company in 1997 by Karl Rove, now a senior adviser to President Bush. Reed, head of the Atlanta-based consulting firm Century Strategies, is the former executive director of the Christian Coalition and current chairman of the Georgia Republican Party.
Reed has drawn criticism for his 1997 work on one Enron issue, a Pennsylvania deregulation matter, but Century Strategies Vice President Tim Phillips said yesterday the firm's relationship with Enron continued until October 2001, when it ended by "mutual agreement."
Phillips said Enron never finalized the specific lobbying job outlined in Reed's memo, but he declined to answer questions about what tasks Reed did carry out for the Houston company. Reed did not return phone calls.
Last month Judicial Watch, a conservative watchdog group, asked for a federal investigation into whether Rove arranged the 1997 Enron contract to avoid paying Reed from Bush campaign funds. Others have questioned whether the Bush camp had hoped to ensure Reed's allegiance during the early days of the campaign.
Enron has offered little information about its dealings with Reed, one of many prominent political figures and commentators the company cultivated ties with before it collapsed in bankruptcy late last year. Rick Shapiro, the Enron vice president to whom Reed addressed the memo, declined to comment.
Reed's influence has escalated over the last decade. He claims credit for helping Bush win several key presidential primary victories, and he has served as an adviser to members of Congress. Since 1997, when Reed opened Century Strategies, his consulting clients have included political candidates and corporations with interests in Washington. He dropped Microsoft Corp. as a client in 2000 after charges that he had lobbied Bush on behalf of the software company while Bush was governor of Texas.
The seven-page memo to Enron illustrates for the first time how Reed pitches his services to major corporations and how he draws on alliances he forged during ideological battles fought alongside conservative religious leaders. It also shows how political consultants have increasingly brought tactics once seen only in campaigns into the legislative arena.
Enlisting Reed's aid would have been in character with Enron's strategy of aligning itself with high-visibility political figures and pundits. Those who have accepted pay from Enron for their advice and other help include Bush economic adviser Lawrence B. Lindsey, Weekly Standard editor William Kristol, economist Paul Krugman, CNBC commentator Larry Kudlow, U.S. Trade Representative Robert B. Zoellick and incoming Republican National Committee chairman Marc Racicot.
Reed referenced his previous Enron work in the October 2000 memo, noting Enron had seen his "capabilities at work in the 1997 effort in Pennsylvania," where Reed helped Enron build support for electricity deregulation. "Since that time, we have built a formidable network of grass-roots operatives in 32 states," he wrote.
Reed offered to mobilize that network in an effort to deregulate the electricity market. At the time, Enron was seeking open access to the nation's power grid so it could compete with traditional utilities.
Reed's memo stresses that his firm's "long history of organizing these groups makes us ideally situated to build a broad coalition" benefiting Enron. He said Enron's arguments for deregulation were less important than commanding attention by enlisting the aid of elected officials' friends and supporters.
"There are certain people -- a friend or family member, key party person, civic or business leader, or major donor -- whose correspondence must be presented to the [elected] official for his personal reading and response," Reed wrote.
Such prominent figures could act as surrogates for Enron while pressing lawmakers to rewrite statutes, Reed said.
"We have the capacity to generate dozens of high-touch letters from an elected official's strongest supporters and the most influential opinion leaders in his district," he wrote. "Elected officials and regulators will be predisposed to favor greater market-oriented solutions if they hear from business, civic, and religious leaders in their communities."
Reed's memo said his organization had a record of harnessing the "minority community" and the "faith community" to support his clients.
Reed proposed two lobbying strategies, one costing $177,000 and the other $386,500.
"I will assume personal responsibility for the overall vision and strategy of the project," he wrote. "I have long-term friendships with many members of Congress."
Reed proposed sending 20 "facilitating letters" to each of 17 members of the congressional commerce committees that handle deregulation. Under the proposal, Enron would pay Reed's firm $170,000 for generating the letters, each signed by a third party.
Reed asked Enron to pay his firm $25,000 to generate letters to the editors of newspapers, each signed by a prominent figure. "These op-eds and letters are then blast faxed to elected officials, opinion leaders and civic activists for use in their own letters and public statements." He said his firm had recently "placed" opinion pieces in The Washington Post and the New York Times.
A $79,500 telemarketing campaign would have cold-called citizens and offered to immediately patch them through to Congress.
"For one recent client, we generated more calls to a U.S. Senate office than had been received since impeachment" of President Bill Clinton, he wrote. "The result was a major victory for the client."
Finally, Reed said he had enjoyed "great success" in using conservative news-talk programs to spread his clients' message to "faith-based activists."
"Our public relations team has extensive experience booking guests on talk radio shows, and has excellent working relationships with many hosts," he wrote, proposing a $30,000 fee.
"We look forward to working with Enron," he said.
Staff researcher Lucy Shackelford contributed to this report.