FEC ruling reveals GOP consultant would have collected over half a million dollars from Enron
By PETE YOST, Associated Press
WASHINGTON (March 10, 2003 8:01 p.m. EST) - In a controversy that touched White House political adviser Karl Rove, Enron Corp., signed contracts with GOP consultant Ralph Reed worth more than half a million dollars, the Federal Election Commission revealed in a ruling.
Enron paid Reed, the former Christian Coalition leader, about $300,000 before the energy company's collapse.
The payments came to light as part of an FEC inquiry into whether Enron's hiring of GOP consultant Reed was a sham designed to disguise an in-kind contribution from Enron to Bush's presidential effort.
In dismissing a complaint against Rove and the Bush-Cheney presidential campaign, the FEC disclosed that the Enron-Reed ties involved far more money than has previously been reported.
The FEC said that just months before Enron filed for bankruptcy in 2001 it entered into a one-year contract paying Reed $30,000 a month plus expenses. The contract was for "ongoing advice and counsel to Enron" in pushing deregulation in the energy industry. The FEC ruling says that the agreement apparently was cut short after four months as Enron careened toward bankruptcy.
Reed collected about $200,000 from two earlier Enron contracts beginning in 1997 as Bush prepared a bid for president and then ran, the FEC ruling disclosed.
The FEC ruling also revealed generous terms of the first contract Reed's firm had with Enron. Under it, the agreement for $114,000 plus expenses was to continue in full, even if Reed's firm finished the work early.
Reed spokeswoman Elizabeth Baggett declined comment Monday about the FEC ruling, which was dated Feb. 28.
The controversy stems from a New York Times story a year ago which quoted unidentified associates of Rove as saying he had told them he recommended Reed's firm to Enron in 1997 in order to keep Reed's favor for a potential Bush candidacy.
Judicial Watch, a conservative group, filed the complaint alleging violations of the Federal Election Campaign Act.
The FEC found that Reed's firm performed work for Enron in 1997, collecting thousands of signatures in Pennsylvania where state officials were crafting an electricity deregulation plan. On the other hand, the FEC noted an "apparent lack of work for the money" in 1998.
Nevertheless, the FEC said that on balance the evidence indicates that the retention of Reed's company "was bona fide" and not designed to hide a contribution to Bush.
In responding to the FEC's inquiries, Enron's lawyers stated that "the Enron employees who were involved in this process do not recall having any communication with Mr. Rove or any person who represented Mr. Bush in his capacity as a potential presidential candidate, nor do they recall being aware of any communication encouraging them to hire" Reed or his firm.
The White House confirmed a year ago that Rove recommended Reed to Enron. The New York Times article quoted Rove as saying that he thinks he talked to someone at Enron about Reed but could not remember who or when.
The FEC said that "given the passage of time, nothing is inherently incredible about the apparent failure of recollection by either Rove" or Enron's executives.