Ralph Reed made big bucks from Enron, FEC report unveils

Church & State, Apr 2003

Former Christian Coalition director Ralph Reed found a lucrative career once he left TV preacher Pat Robertson's political outfit: As a consultant, Reed was paid hundreds of thousands of dollars by the Enron Corporation over a five-year period until the company collapsed, a newly released Federal Election Commission (FEC) report has indicated.

The FEC looked into Reed's relationship with Enron as part of an investigation of President George W. Bush's 2000 presidential campaign. Conservative activist Larry Klayman of Judicial Watch had asserted that Bush and Vice President Dick Cheney arranged for Enron to pay Reed while Bush used Reed as a political consultant. If true, the payments would have been a type of in-kind contribution from Enron to the Bush campaign and a possible violation of federal campaign laws.

The FEC dismissed Klayman's allegations, but in the ensuing investigation found that the ex-Christian Coalition head was paid much more by Enron than had previously been disclosed. In 1997, Reed's Atlanta-based Century Strategies received $200,000 from the failed energy corporation. In 2000, he received $75,000 from Enron and by 2001 was receiving $30,000 monthly plus expenses.

Reed supposedly received the money for providing "ongoing advice and counsel to Enron" about electricity deregulation, although Reed has no background or special expertise in this area. The FEC also found that the terms Reed had with the company were extremely generous, permitting his consulting company to keep getting paid even if it finished its work early.

The New York Times reported last year that top Bush aide Karl Rove recommended that Enron hire Reed. The move was seen as a way to keep Reed in Bush's camp while at the same time avoiding having the Bush campaign hire him directly. Bush, who ran as a moderate, sought Reed's advice and valued his connections with religious conservatives but did not want to appear too close to him publicly.

Enron's collapse dominated headlines for weeks when it was revealed that the energy company paid top executives exorbitant salaries, inflated its stock values and looted employee retirement plans. Even as the company was spiraling downward, it continued paying Reed until it filed for bankruptcy late in 2001.

The FEC found that Reed did legitimate work for the company in 1997 but said in 1998 there was an "apparent lack of work for the money." Nevertheless, the FEC ruled that Reed's dealings with the company were legitimate and not an effort by the Bush campaign to hide a contribution.

Rove admits that he talked to someone at Enron about Reed but now says he cannot remember who it was or when it occurred. Enron lawyers asserted that no one at the firm recalls talking to Rove about hiring Reed.

The controversy hasn't slowed Reed's advancement. In February he announced that he was stepping down as chairman of the Republican Party of Georgia to work on Bush's reelection campaign. Reed, who oversaw the election of a Republican governor and helped Republican Saxby Chambliss defeat incumbent Democrat Max Cleland for a U.S. Senate seat, said he enjoyed his tenure, but it was time to move on.