Ex-Reagan Aide Now Wealthy Lobbyist : Deaver Success Rekindles ‘Revolving Door’ Debate

WASHINGTON —  Even in the world of Washington power brokers and lobbyists, the sudden wealth of Michael K. Deaver, President Reagan’s former aide and confidant, is nothing short of stupendous.

Since he resigned 11 months ago as deputy White House chief of staff, Deaver has parlayed his access to top Administration officials into a lobbying and public relations business with more than a dozen corporate and foreign clients that pay the fledgling firm $4.5 million a year.

Indeed, Deaver--who used to complain that he had to dig into savings to make ends meet on a government salary of about $70,000 a year--has been so successful that the firm bearing his name has reached an agreement in principle to be purchased for up to $18 million by a British advertising and public relations firm. Naturally, the 47-year-old former official with the longest and closest ties to President Reagan and his wife, Nancy, would be part of the sales package.

But even as he has used his high-level government contacts on behalf of his clients, Deaver has breathed new controversy into the long-smoldering issue of the so-called “revolving door” between government and the private sector.

One critic, Sen. Strom Thurmond (R-S.C.), observes tartly: “People should seek work in the federal government as a way to serve their country and their fellow citizens--and not to gain information and access that is then used to influence the outcome of issues for the benefit of a client.”

For his part, Deaver insists that he has done nothing illegal or improper. And Reagan gave his former lieutenant a solid vote of confidence at his news conference Wednesday night, saying Deaver has been “darn successful” in his new business but “has never sought anything from me.”

Although the full story of Deaver’s activities is still unfolding, this much is known:

--The General Accounting Office, Congress’ watchdog agency, is investigating a possible conflict of interest in Deaver’s representation of the Canadian government’s campaign to solve acid-rain pollution resulting from U.S. industries.

Meeting With Miller

--Deaver also has caused concern among some White House aides by meeting with James C. Miller III, Reagan’s budget director, on behalf of Rockwell International Corp., one of his clients.

--Furthermore, last week it was disclosed that Deaver had asked presidential counsel Fred F. Fielding to consider joining his lobbying firm in March, when Fielding’s office already was scrutinizing Deaver’s activities on grounds of conflict of interest.

--And Frank Keating, the Treasury Department’s enforcement chief, told The Times he also met on two recent occasions with Deaver, who was seeking to negotiate a lower monetary penalty for two South Korean steel firms that the U.S. Customs Service charged had illegally “dumped” steel on the American market.

Besides Canada and South Korea, Deaver also represents the governments of Saudi Arabia, Mexico and Singapore. The Arab kingdom pays him $500,000 a year, the most of any foreign client, according to filings required by law with the Justice Department.

Deaver, who can now afford $1,500 bonsai trees and a chauffeur-driven Jaguar XJ6, is but the most notable of a wave of Reagan appointees who have left government to work profitably as consultants and lobbyists in the private sector.

Other Lobbyists

Among the others are Edward J. Rollins, the former White House political director who is now a lobbyist and congressional campaign consultant with the Washington firm of Russo, Watts & Rollins, and M. B. Oglesby, former director of the White House Office of Congressional Affairs, who represents the interests of corporate clients for Bill Hecht & Associates.

In addition, Charles R. Black and Paul J. Manafort, former political directors of the 1984 Reagan-Bush reelection campaign and the Republican National Convention, are now partners in a new Washington-area lobbying and political consulting business. And Robert A. McConnell, former assistant attorney general for legislative affairs, now heads CBS’s Washington corporate office.

Lucrative Work

The lucrative work of these Administration insiders takes place against a backdrop of years of unsuccessful attempts to legislate federal officials’ ethical behavior. These efforts have largely produced only a complex, gray area of law, with few effective guidelines.

Indeed, such disparate critics as Thurmond, who is chairman of the Senate Judiciary Committee, and Fred Wertheimer, president of the citizens lobby Common Cause, last week called for reforming what Thurmond dubbed the “confusing mishmash of laws” regulating those who leave government to lobby it instead.

Billy Carter’s Role

To be sure, in previous administrations people close to the President have tried to capitalize on their positions to become successful lobbyists. Billy Carter, the financially strapped younger brother of former President Jimmy Carter, was investigated by the Justice Department in 1980 for receiving payments of $220,000 from the Libyan government to help promote “good will” between the two nations.

And a decade earlier, the former law firm of then-President Richard M. Nixon and then-Atty. Gen. John N. Mitchell opened a Washington office a block from the White House, receiving a flood of corporate clients who wanted help in solving their problems with federal regulatory agencies.

But the lobbying and consulting by former Reagan appointees appears to be more extensive--and their fees much higher--than those of past officials-turned-lobbyists.

Common Cause’s Wertheimer is among those who contend that Deaver’s actions “in trading off relationships while the bodies are still warm” goes beyond what took place in earlier administrations. What is more, he asserts, “The phenomenon of influence-peddling on the part of foreign governments is a relatively new dimension and is much more widespread than we’ve seen in the past.”

Deaver Defensive

Although Deaver was reported out of the country last week and unavailable for comment, he recently defended his conduct in a televised interview on the “MacNeil/Lehrer NewsHour.”

Referring to his close ties to the President and the First Lady, he said: “I wouldn’t tread on that friendship on behalf of a client and, frankly, I’m insulted if people think that’s all I have to offer. I was in this business (public relations in California) before I got to the White House.”

In that interview, Deaver said that although he represents a wide variety of Canadian interests under a $100,000 contract, he has lobbied no one in the U.S. government on acid rain. However, while still at the White House he helped arrange Reagan’s 1985 summit meeting with Canadian Prime Minister Brian Mulroney, which culminated in the appointment of former Transportation Secretary Drew Lewis as U.S. special envoy on acid rain.

Since Deaver’s new contract, Reagan has done a 180-degree turn in expressing determination to solve the sensitive environmental issue: His endorsement last month of a multibillion-dollar government program to reduce acid rain was in sharp contrast to his 1980 campaign stance of blaming a large share of air pollution on trees.

Despite Deaver’s denial of lobbying any government official on acid rain, GAO investigators plan to question Lewis and examine White House documents on the issue.

At the same time, several White House aides who requested anonymity said they were uneasy that Deaver had met with OMB Director Miller and urged him to support the Air Force’s purchase of more B-1B bombers constructed by Rockwell at its Palmdale, Calif., plant.

Yearlong Wait

Under federal ethics laws, a senior official who leaves the government cannot lobby his former department or agency--in Deaver’s case, the White House--for a year. Deaver left last May; the meeting with Miller occurred Feb. 27.

However, Deaver’s defenders cite a ruling by the federal Office of Government Ethics that Miller’s Office of Management and Budget is not part of the White House for purposes of conflict-of-interest laws. That ruling first was requested in the final days of the Carter Administration.

Government regulations also flatly prohibit, with no time limit, lobbying by former top officials on issues in which they were personally and substantially involved while in government. But Deaver said he never worked on the B-1 issue while at the White House, although he did sit in on some National Security Council meetings at which such defense matters often are discussed.

Another meeting that has raised questions about Deaver’s conduct since leaving the White House was the one Deaver held last month with Fielding, when he asked the presidential counsel to consider joining his firm when he left government service March 31.

‘Abundance of Caution’

Fielding, citing “an abundance of caution,” said he had taken himself out of reviewing Deaver’s actions after a vice president of Deaver’s firm had contacted him in February about the meeting concerning possible employment.

Treasury enforcement chief Keating, who took office only last January, said he had not known Deaver before they met twice at Deaver’s request and that he found nothing objectionable about Deaver’s representation of the South Korean steel firms.

The customs service had sought to impose $13 million in penalties on the firms--among the largest ever assessed--but Deaver is arguing that the sums should not exceed $11 million, Keating said. Negotiations are continuing, and a decision is not expected for months.

Meanwhile, Thurmond plans to hold a Judiciary Committee hearing April 22 on a proposed sweeping overhaul of existing ethics law that would be both stronger and simpler than present statutes. Among other things, the legislation would cover all three branches of government instead of focusing on executive branch employees, as the current law does.

Complicated Set of Bans

In place of the present complicated set of bans, Thurmond’s measure would bar all federal employees from lobbying the government for one year after they left office and for two years if it was on behalf of a foreign government. A lifetime ban would prevent certain high-level federal officials from ever representing or advising foreign governments or entities.

In the interim, Deaver and his former Administration colleagues will continue to plead the cause of their foreign clients.

When asked why foreign countries hire him, Deaver said in the television interview that he has “a pretty good track record of being able to solve problems, in developing strategies, in helping clients determine what their objectives are and coordinating those efforts here in this town (Washington).”

But, retreating to the confidentiality characteristic of most top lobbyists, Deaver added: “I’m not going to talk specifically about what I do for clients.”