The cover of Time magazine that appeared the week of Feb. 23 showed President Reagan's longtime friend and former deputy chief of staff Michael K. Deaver looking the picture of success as he leaned against the rich burl wood inside his limousine. The phone was poised against his ear, the U.S. Capitol in the background.
But the headline, some veteran Washingtonians commented at the time, seemed to portend trouble for this relative newcomer to lobbying in the nation's capital. It said "Who's this man calling? Influence Peddling in Washington."
Less than a month later, Deaver's efforts since he left the White House last May became the subject of intense scrutiny in the news media, Congress and even inside the Reagan administration. David H. Martin, head of the Office of Government Ethics, sent a letter Friday asking the Justice Department to determine whether Deaver had violated federal conflict of interest laws.
Five Democratic senators have asked Attorney General Edwin Meese III to seek appointment of an "independent counsel" to investigate Deaver's activities on behalf of clients for his firm.
And a reported $18 million buyout of Michael K. Deaver & Associates by the British-based advertising and public relations company Saatchi and Saatchi suddenly stalled earlier this month as Deaver attracted more unflattering attention.
Why Michael K. Deaver?
Early in the Reagan administration it became apparent that Deaver found the $72,000-a-year salary at the White House inadequate to live in Washington. As he said in one interview more than four years ago, "I have no money left. We are living on our savings."
On Jan. 3, 1985, The Wall Street Journal reported that Deaver's prospects had brightened considerably since then, in large part because his wife Carolyn had become what the paper described as "an almost overnight success" as a public relations consultant for Mary Pettus & Associates Inc.
The next day, the White House announced that Deaver would be leaving to go into the public relations business.
Deaver, who retains his White House pass and who says he knows that the law allows him to socialize with former colleagues at the White House but not to lobby them for his new clients, has a friendship with the Reagans that stretches back almost two decades. After Deaver left the White House, Reagan told reporters that he felt his departure was "more in the nature of an amputation."
Since then, it was revealed last week, the president's confidential daily schedule has been made available to Deaver each morning, a tangible sign of his continuing close relationship to the White House. It also has been reported that Deaver has continued to give advice to the White House on public relations strategy.
Once outside government, Deaver quickly became a highly visible lobbyist for various corporations and foreign governments. His annual billings rose to about $2 million during his first year in business, according to news reports. His client list has included Boeing, CBS, TWA, Philip Morris, sugar-producing countries in the Caribbean, businessmen in Manila, the government of South Korea and others.
But with the new riches and the high visibility, Deaver soon began to run into difficulties; questions were raised about whether he had unfair access to the White House on behalf of his clients.
Deaver has protested that he knows the law and he has done othing wrong. But it is clear that administration officials and some members of Congress disagree on hether Deaver has a conflict of interest under the Ethics in Government Act.
The law, passed by Congress in 1978, prohibits a former federal employe from representing anyone on any matter before his former agency for one year after leaving government service. The law prohibits the former official from lobbying on any matter in which he had personally and substantially participated.
The act forbids a government official from negotiating for work with anyone affected by his or her job before resigning from that post, and it carries a penalty of up to two years in prison and a $10,000 fine for a violation.
The most serious question raised about Deaver's role as a lobbyist involves his efforts on behalf of Canada, which pays him $105,000 a year to lobby on acid rain, among other issues.
The Reagan administration had long taken a hard line against Canadians who feel that their lakes and wildlife are suffering because they are downwind from tall exhaust stacks on industries and utilities in the U.S. Midwest.
One former colleague has said that Deaver, while deputy chief of staff in early 1985, was "knee-deep" in discussions at the White House about whether Reagan should make concessions on acid rain during Reagan's meetings with Canadian Prime Minister Brian Mulroney in March 1985. Others have said that Deaver, Reagan's public relations specialist, was primarily concerned with the image question, not the substance of the issue.
At the summit, the two countries appointed special representatives on acid rain, and several sources have said that Deaver pushed to have former transportation secretary Drew Lewis as the U.S. envoy. The envoys' report in January called for a major new effort to address the acid rain problem, and Reagan, who previously resisted such proposals, endorsed it.
One key Canadian source told The Washington Post last week that Deaver discussed the possibility of representing Canada before he left the White House.
The allegation was denied vigorously by Mulroney spokesman William Fox, who said "the very first discussion about this contract" came on May 16, 1985, six days after Deaver left the White House.
The General Accounting Office has been investigating Deaver's role in the acid rain issue at the request of Rep. John D. Dingell (D-Mich.), chairman of the Energy and Commerce Committee, and it is thought to be one of the issues being reviewed by the Office of Government Ethics.
A report from the White House to the GAO reportedly says that Deaver met with a top adviser to Mulroney in February 1985 to discuss the special envoys that were appointed almost two weeks later.
One participant told The Post last week that on Oct. 25, Deaver, by then a consultant for Canada, attended a meeting at the River Club in New York when the two special envoys on acid rain and Canadian Ambassador Allan E. Gotlieb discussed their upcoming report.
Deaver has said on television and to reporters that he has done nothing wrong and that he is "confident" that the GAO will support his view that his role on acid rain was strictly part of his White House duties. One source said that at the October meeting in New York, Deaver was involved in the discussion of the timing of the report and did not seek to influence its content.
On another issue, Deaver upset some White House aides last month after he met with James C. Miller III, director of the 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.
Deaver said earlier this month that he had not violated the Ethics in Government Act because he had not worked on the B1 issue while at the White House. The Office of Government Ethics has ruled that technically, OMB is separate from the White House.
Located in the Executive Office Building next door to the White House, OMB is viewed as an arm of the president's complex, and some administration officials said they were "aghast" when they heard about the session. One said, "Some of us thought it should not have been done."
A few days after that was reported, Reagan defended his former deputy and friend at his April 9 news conference by saying "Mike has never put the arm on me or sought anything or any influence from me since he has been out of government."
The five Democratic senators who asked Meese to name an independent counsel to investigate Deaver also cited his lobbying for tax breaks for Puerto Rico and his representation of Daewoo Corp., a giant Korean conglomerate, as topics deserving investigation.
Still supporting his friend as he went to Hawaii, Reagan was asked whether an independent counsel should be appointed by Meese. His answer was a firm "No."