Former White House deputy chief of staff Michael K. Deaver, now a lobbyist and consultant, recently met with James C. Miller III, director of the White House Office of Management and Budget, on behalf of a client, Rockwell International Corp., which is trying to persuade the administration and Congress to build more B1 bombers.
The meeting unsettled some White House officials, administration sources said, because of federal rules that prohibit a senior official who leaves the government from lobbying his former department or agency for a year. The rules also prohibit top officials from lobbying on issues in which they were personally and substantially involved while in government.
Deaver, who left the White House last May, said in a telephone interview today that he "absolutely" did not violate the rules because the budget office is separate from the White House and he did not work on the B1 issue while at the White House.
A senior White House official said that "technically" Deaver did not violate the rule because Miller, at the Office of Management and Budget, is not part of the White House Office, which is made up of top presidential aides such as chief of staff Donald T. Regan.
When Miller told other White House aides of the meeting, presidential counsel Fred F. Fielding reiterated to them the prohibitions on lobbying by former officials. Participants said Fielding did not criticize Miller or Deaver but simply repeated the rules.
Since he left the White House, Deaver has rapidly become a highly visible lobbyist for various foreign governments and corporations, some of which are seeking to influence administration decisions.
In the B1 bomber case, Rockwell is trying to persuade the administration to continue buying the bomber after the 100th is delivered in 1988. But rival Northrop Corp. is pushing the administration to stick by its current plan to stop buying B1s and instead go forward with the Stealth advanced-technology bomber.
Deaver served for nearly two decades as a top adviser to Reagan and was credited with successfully blending policy initiatives and image-making in Reagan's first term.
Deaver still retains close personal ties to the Reagans, and is sometimes invited to advise White House officials on communications strategy. For example, two White House officials said Deaver attended a meeting in February to discuss Reagan's approach to selling his defense budget to Congress and the American public.
Other public relations firms have reportedly made inquiries about purchasing Deaver's firm in Washington. Deaver said today he is "in the process of negotiation" on the sale of his firm, Michael K. Deaver & Associates, to the London-based Saatchi and Saatchi, parent company to the biggest advertising agency in Europe and the fourth largest worldwide.
Deaver would not provide details, but informed sources said the transaction, which may be completed in a matter of weeks, was valued at nearly $18 million, which Deaver would receive over several years while continuing to retain control over his office in Washington.
In 1979 and 1983, the advertising arm of the British firm, Saatchi and Saatchi Compton Worldwide, worked for the Conservative Party and Prime Minister Margaret Thatcher. Its other clients include British Petroleum, Cadbury Schweppes, British Airways, Renault automobiles, Procter & Gamble, Johnson & Johnson, and Paine Webber, according to the firm's New York office and news accounts. Saatchi and Saatchi has also acquired business-service and advertising agencies in the United States.
On the B1 issue, Deaver said his meeting with Miller was "informational" and he did not ask Miller to do anything specific. Deaver said he was "bringing him up to date on what I was doing, up front" on the B1, and also talked to Miller about other matters.
The meeting came to the attention of top Reagan aides when Miller told them about it at a senior White House staff meeting, according to several participants. Edwin L. Dale Jr., the budget office spokesman, said Miller had consulted with the agency's general counsel in advance of meeting Deaver, and was told it would be proper.
Miller, he said, told the presidential aides that he would not discuss the substance of Deaver's conversation in the White House so as not to break the rules that classify the budget office as a separate entity.
That classification was made in rules published last year by the Office of Government Ethics.
In practice, however, the budget office is part of the larger White House complex and Miller, as director, participates in many meetings of senior officials at the White House.
The ethics office also issued the rules on lobbying under the Ethics in Government Act.
One provision says that for one year a senior official who leaves government cannot seek to influence "his former department or agency or any of its offices or employes." The rule applies to "any particular government matter . . . which is pending before such department or agency or in which it has a direct or substantial interest."
Another provision prohibits former officials from lobbying on issues in which they "participated personally and substantially as a government employe." A third rule says former officials cannot lobby on matters over which they had direct responsibility in government for two years after leaving office.
David Martin, director of the Office of Government Ethics, was unavailable for comment today. Although White House aides say Deaver appears to have been within the rules, they criticized such lobbying by the former deputy chief of staff.
When Miller disclosed it, "we were all aghast," said one official whose office is in the White House West Wing, across the street from the budget office. "I guess he assumed that the White House ended here, not across the way. Some of us thought it should not have been done."