The Canadian government has acknowledged to a House subcommittee that a Canadian official made a "light-hearted conversational remark" to then White House deputy chief of staff Michael K. Deaver about how much Canada "could use a good man" like Deaver.
Canada's Ambassador to the United States Allan E. Gotlieb disclosed the comment in a letter sent Friday to Chairman John D. Dingell (D-Mich.) of the House Energy and Commerce subcommittee on oversight and investigations, which is probing whether Deaver violated federal conflict-of-interest laws.
One of the key issues in the inquiry is whether Deaver discussed possible employment as a consultant with future clients while he was still a top White House official. The subcommittee is trying to determine whether Deaver violated laws that prohibit officials from negotiating with future employers while taking part in policy discussions that could affect those employers.
Gotlieb, offering "supplementary information" to the House panel, again denied that Canadian officials had negotiated or made any offers to Deaver while he was working in the White House. After leaving the White House last year, Deaver signed a one-year, $105,000 contract to advise Canada on a number of issues involving relations with the United States. Among them was acid rain pollution, a topic with which he had been involved at the White House.
The Washington Post two weeks ago quoted a knowledgeable Canadian source as saying that Deaver was working at the White House when he first talked with Canadian officials about signing up Canada for his Washington lobbying and public relations firm.
Deaver left the White House May 10, 1985. Gotlieb reiterated in Friday's letter to Dingell that the first discussion with Deaver about a "possible contract" came six days later "and any suggestions to the contrary are without foundation."
However, Gotlieb said there had been an earlier remark to Deaver from "an official in Canada" whom he did not identify. He said the remark came "considerably after" Deaver's announcement Jan. 4, 1985, that he was leaving the White House. An embassy spokesman said yesterday that the remark was not made by Gotlieb but would not identify who did make it.
The Canadian official, Gotlieb said, "did make a light-hearted conversational remark to Mr. Deaver to the effect that the U.S. was indeed fortunate to have a person of Mr. Deaver's talents on its team, and how much we could use a good man like that."
"The exchange was regarded as so inconsequential by the Canadian official that he does not recall the precise time at which it was made but believes it was well after the Quebec summit" March 16-17, 1985, between President Reagan and Canadian Prime Minister Brian Mulroney.
"This was a remark made entirely as a light-hearted and jesting conversational filler, and is hardly the stuff of negotiations or offers or proposals, of which there were none," Gotlieb said. He added that "we regard this as having no importance whatever" but said he was passing it along to be "as helpful as possible" to the House panel.
Canadian officials have said that while they are willing to volunteer some information, they think that Canada's dealings with Deaver involve privileged information that will not be disclosed to congressional investigators.
At the Quebec summit both leaders announced appointment of special envoys to study the acid rain problem. Other officials have said Deaver was involved in promoting the idea of special envoys on acid rain while he was on the White House staff. After being hired by Canada, Deaver attended a meeting on the subject with Gotlieb and the special envoys to discuss the report. When it was later published, the report led to a shift in Reagan's policy on acid rain to one that was more favorable to Canada.
The General Accounting Office reported Friday to the House panel that it had found evidence Deaver may have violated federal conflict-of-interest laws, and it has referred its findings to the Justice Department. Deaver has denied any wrongdoing.
Deaver, five Democratic senators and the Office of Government Ethics have asked the Justice Department to appoint an independent counsel to investigate the allegations against Deaver, and the Federal Bureau of Investigation is conducting a preliminary inquiry.
Federal law prohibits officials who leave the government from lobbying on issues in which they were personally and substantially involved while in office. The law also bars any government official from making recommendations, rendering advice or otherwise substantially participating in decisions affecting an outside interest "with whom he is negotiating or has any arrangement concerning prospective employment." Both provisions carry criminal penalties.
In his letter to Dingell, Gotlieb also said the idea to appoint special envoys on the acid rain problem "was entirely a Canadian initiative."
"We are certainly anxious to dispose of any notion that Mr. Deaver, as opposed to the Canadian government, was responsible for generating the idea of special envoys, or had any special responsibility for it," Gotlieb wrote.
However, current and former U.S. government officials have said Deaver was responsible for actively pushing the idea in the White House before the Reagan-Mulroney summit.