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From The Post
When GOP Fund-Raisers Just Say No (Nov. 5)

Lobbying Role of Ex-Gore Aide Examined

By Edward Walsh
Washington Post Staff Writer
Thursday, November 6, 1997; Page A06

A House Commerce subcommittee jumped into the campaign finance controversy yesterday by examining a case Republicans said suggested the trading of government contracts for political contributions and Democrats characterized as a "witch hunt" meant to damage Vice President Gore.

The case involves Molten Metal Technology Inc., a Massachusetts firm that won a $1.2 million Energy Department research contract from the Bush administration that swelled to $33 million under the Clinton administration. During this time, the firm and some of its officers were contributing to Democratic Party committees even as it was represented in Washington by lobbyist Peter S. Knight, a former Gore chief of staff who later became chairman of the Clinton-Gore reelection committee.

Both Knight and Thomas P. Grumbly, a former assistant secretary in the Energy Department who oversaw the project for the Clinton administration, told the subcommittee on oversight and investigations that politics and campaign contributions played no role in the expansion of the firm's work for the government to develop hazardous waste cleanup technology.

In a prepared statement and in testimony last night, Knight said he had never spoken to Gore about federal contracts for any of his clients. "Political contributions played no role in Molten Metal's success story," he said. "Molten Metal supports political leaders in both parties. In the last election cycle, for example, Molten Metal gave $47,000 to Democratic Party committees while donating $34,000 to Republican committees."

Knight said he never saw a memo, produced by Republicans, in which the company said Knight would talk to an Energy Department official "to assess the commitment to plan next steps" for the contract.

Grumbly testified that he was not aware of Molten Metal's political contributions in August 1993 when he made an initial decision to set aside $9 million to continue supporting the project. He said subsequent decisions that increased the firm's government funding to $33 million were made by the Energy Department's professional staff.

"I didn't know anything about political contributions," he said. "I don't think Peter Knight got me this job [at the Energy Department]. I made these decisions on the merits."

The only concession that Grumbly made was that it was a "mistake" for him to meet several times for dinner and in other social settings with Knight and Molten Metal officials. "It was a mistake not because it was unethical but because it deflects from the question of whether this was a good technology," he said.

The House subcommittee, which has jurisdiction over the Energy Department, is the third congressional panel to hold public hearings on the campaign finance abuses of the 1996 election cycle. The Senate Governmental Affairs Committee ended its largely inconclusive investigation last week, while the House Government Reform and Oversight Committee will resume its hearings today by questioning White House officials about their compliance with subpoenas.

Yesterday's hearing was marked by the same kind of partisan divisions that have plagued the other committees. Setting out the Republican theme for the session, subcommittee Chairman Joe Barton (R-Tex.) said there appeared to be "a remarkable relationship between the timing of Molten Metal's political contributions and favorable contract actions by the department," leaving the impression that the firm was "a politically favored company."

According to a chronology by GOP staff aides, on the day that Molten Metal received its first $9 million contract expansion that was strongly supported by Grumbly, the company gave $15,000 to the Democratic National Committee. Two days earlier, according to the chronology, Molten Metal's president, William M. Haney III, gave $50,000 to the University of Tennessee to help endow an academic chair in honor of Gore's late sister.

But Democrats dismissed the timing of contributions and contract decisions as coincidental. "This is a witch hunt. That's all it is – a smear job," said Rep. Bart Stupak (D-Mich.). The Democrats also seized on an internal memo by Mark Paoletta, the committee's chief Republican counsel, in which he said public hearings would be useful to "force the key players to deny allegations of misconduct under oath" but warned that "there is no smoking gun," leaving the GOP open to charges that it was "engaging in a witch hunt or smear of Democratic officials."

Republican committee members remained openly skeptical of Grumbly's explanation of the expansion of Molten Metal's government contracts. Rep. Richard Burr (R-N.C.) produced internal Energy Department documents suggesting career employees had grave doubts about the soundness of the firm's hazardous waste technology.

Grumbly replied that not everyone in the department agreed with continued support of the firm, but that the internal disputes were typical of "disagreements one often sees in research and development projects."

© Copyright 1997 The Washington Post Company

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