Bush adviser Ralph Reed offered to lobby for Enron
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WASHINGTON — Just before the last presidential election, Bush campaign adviser Ralph Reed offered to help Enron 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 nonprofit organizations 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.
The Oct. 23, 2000, memo was obtained by The Washington Post.
"In public policy," Reed 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 Bush adviser. 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 GOP.
Reed has drawn criticism for his 1997 work on a single Enron issue, a Pennsylvania deregulation matter, but Century Strategies Vice President Tim Phillips said yesterday that 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. Reed did not return phone calls.
Last month Judicial Watch, a conservative watchdog group, accused Rove of arranging 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 early in the presidential campaign.
Reed's influence has escalated over the past 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 clients have included political candidates and corporations with interests in Washington. He dropped Microsoft as a client in 2000 after charges that he had lobbied Bush on behalf of the software company while Bush was governor of Texas.
At the time of Reed's memo, Enron was pushing for open access to the nation's power grid so it could compete with traditional utilities.
"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."
Reed proposed sending 15 "facilitating letters" to each of 16 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 also proposed generating 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.
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.
Lay sold stock after warning
WASHINGTON — Former Enron Chairman Kenneth Lay sold some $70 million of his stock back to the company to repay loans last year, including $16.3 million in the 13 days after he was warned by executive Sherron Watkins of serious accounting problems, an official document shows.
Lay frequently sold blocks of shares — many worth as much as $4 million — from February through October, a period in which the company's stock tumbled from $78 a share to $15.
Some sales came at a time when Lay was touting Enron's stock and future prospects to employees, assuring them that the company's finances were sound and its books in good shape.
"Mr. Lay remained confident in Enron stock through late 2001," his spokeswoman, Kelly Kimberly, said from Houston. She noted that he was entitled to borrow money from Enron under an agreement, "and he exercised that benefit."