While working in the White House, Michael K. Deaver was involved in at least 15 discussions with U.S. and Canadian officials on acid rain, the same issue on which he has since represented Canada as a private lobbyist, federal officials testified yesterday.
James F. Hinchman, deputy general counsel of the General Accounting Office, told a House subcommittee that the evidence suggests several ways in which Deaver may have violated federal conflict-of-interest laws by participating in these meetings and then lobbying for the Canadian government on the acid-rain issue. He said the GAO has referred its findings to the Justice Department, which has opened an investigation of Deaver.
For example, Hinchman said, Deaver actively supported a successful proposal within the Reagan administration that the United States and Canada appoint special envoys to deal with the acid-rain problem. "Mr. Deaver's participation in this particular matter appears to have been significant and thus substantial," Hinchman said, a level that would have subjected Deaver to a lifetime legal ban on representing Canada on the issue.
He said Deaver also may have violated ethics laws by "his very presence" at a meeting on acid rain last October with the U.S. special envoy, Drew Lewis, at which Deaver was representing Canada. The GAO found that Lewis should have been considered a White House official, Hinchman said, and Deaver was legally barred for one year from officially contacting anyone in the White House.
Yesterday's hearing before the House Energy and Commerce subcommittee on oversight and investigations also raised questions for the first time about whether then-White House counsel Fred F. Fielding should have disqualified himself from the Deaver probe sooner than he did because he had discussed a possible job with Deaver's multimillion-dollar consulting firm. In a subsequent interview, Fielding called this "a misunderstanding of the facts and the law."
Deaver, who was White House deputy chief of staff until last May, said in a statement yesterday that the GAO testimony "fails to demonstrate that I have violated any federal laws." He said the testimony "repeats various allegations and rumors that have been circulating in the press for weeks" and that when the investigations are over, "I will be completely exonerated of any wrongdoing."
Deaver said he looks forward to testifying in closed session Friday before the oversight subcommittee, chaired by Rep. John D. Dingell (D-Mich.), which he said will enable him "to tell my side of the story for the first time."
Deaver said the GAO had not interviewed him and that its findings were based mainly "on the recollections of three individuals, including David Stockman," the former budget director. Hinchman said the GAO did not question Deaver to avoid interfering with the Justice Department probe.
The GAO probe was limited to issues involving Deaver's $105,000-a-year contract with Canada, but the FBI is examining other issues in its preliminary investigation of Deaver. The Justice inquiry could lead to appointment of an independent counsel, as Deaver and five Democratic senators have requested, but the department must first gather its own evidence and present a report to a special three-judge panel.
While most of the hearing dealt with interpretations of conflict-of-interest laws, some lawmakers criticized Deaver's conduct as unseemly. Rep. John W. Bryant (D-Tex.) said there is "no excuse and no justification for one of the closest advisers to the president of the United States going to work for a foreign government for money."
The hearing also shed light on some of Deaver's accusers. Hinchman said that Stockman, who criticized Deaver in his recent book, had told the GAO of "rumors" that Deaver had discussed possible employment with Canadian officials before leaving the White House on May 10, 1985. "We have absolutely no evidence to substantiate those rumors," Hinchman said.
Under federal law, Deaver is permanently barred from contacting the executive branch on any "particular matter" in which he "personally and substantially" participated while working in the White House. Hinchman said the controversial process by which the Reagan administration decided to name a special envoy on acid rain should be viewed as a "particular matter," and that the evidence shows substantial involvement by Deaver.
Discussions of acid rain, a form of pollution caused in part by U.S. industrial emissions, intensified as the United States prepared for the March 1985 summit between President Reagan and Canadian Prime Minister Brian Mulroney. The appointment of special envoys was announced at the summit, and their subsequent recommendation for a five-year, $5 billion cleanup plan was endorsed by the Reagan administration.
Deaver told the GAO through his attorney that he attended a Dec. 11, 1984, White House meeting with Allan E. Gotlieb, the Canadian ambassador to Washington, at which acid rain may have been discussed. Deaver also discussed the special envoy proposal in a Feb. 28, 1985, meeting with Fred Doucet, a senior adviser to Mulroney. Deaver and Doucet met on several other occasions to plan for the summit, the GAO said.
[The Canadian government acknowledged yesterday that Doucet was the official who made what it called "a light-hearted conversational remark" during this period to Deaver about how much Canada "could use a good man" like Deaver. Canada's foreign minister made the acknowledgement in a House of Commons debate, Herbert H. Denton of The Washington Post Foreign Service reported from Ottawa. The Canadian government revealed over the weekend that such a conversation occurred, but did not initially specify what Canadian official was involved.]
On March 2, 1985, and again four days later, Deaver met with administration officials who were debating the special envoy proposal. The proposal was also regularly discussed at 8 a.m. White House senior staff meetings during this period, the GAO said.
One faction, led by Stockman's Office of Management and Budget, argued that the naming of special envoys would imply too strong a U.S. commitment; the other, led by the State Department, said it would be worthwhile. Deaver sided with proponents by "endorsing or actively supporting the special envoy approach," Hinchman said.
Deaver also confirmed through his attorney that he had discussed two possible candidates for the special envoy's post with Robert C. McFarlane, then White House national security affairs adviser. They were Lewis, former transportation secretary, and William P. Clark, former interior secretary.
On March 12, 1985, Deaver met again, this time privately, with Ambassador Gotlieb. The GAO said Deaver recalled that they "may" have discussed acid rain and the special envoy proposal.
Seven months after the summit, Deaver, then a private lobbyist, met with Lewis, then the special envoy, on acid rain. The Oct. 25, 1985, meeting at the River Club in New York was also attended by Gotlieb and Canada's special envoy, former Ontario premier William Davis.
The two sides discussed differences over the timing and content of the envoys' report, such as whether it should include a specific financial commitment by the United States, Hinchman said. He said Deaver did not participate in the substantive discussions, but did support an early release of the report.
Regardless of the extent of Deaver's comments, Hinchman said, "his very presence at that meeting appears to constitute assistance" in representing Canada and may violate the law "intended to prevent a former senior employe from making unfair use of his prior governmental position."
By meeting with Lewis, Hinchman said, Deaver also may have violated the one-year legal ban on contacts with his former employer, in this case the White House and White House Office of Policy Development. Although the official job description of the special envoy's post said it was part of the State Department, Hinchman said, Lewis' title was "special envoy of the president," he received an appointment letter from presidential assistant McFarlane, and was given a White House pass and an office across the street in the Old Executive Office Building.
In addition, Hinchman said, Lewis reported to White House officials, received technical support from the White House policy development office and had some of his expenses paid by the White House.
Lewis' status was described differently in a Feb. 28 memo by then-White House counsel Fielding to the Office of Government Ethics, which was investigating Deaver. Fielding said that Lewis "had no administrative support from the White House Office," which the GAO said was inaccurate.
Rep. Gerry E. Sikorski (D-Minn.) sharply criticized Fielding for signing the memo a day after William Sittman, vice president of Michael K. Deaver & Associates, asked Fielding over lunch to consider joining Deaver's firm. Sikorski said Fielding's finding on Lewis' status was "beneficial to Mr. Deaver" and that there was "a prima facie case" that Fielding had himself violated the ethics laws.
Fielding said yesterday that "I never seriously considered going to work for Mike Deaver. There was no job offer made on Feb. 27 or at any time." He said he disqualified himself from the Deaver probe "out of an abundance of caution" in early March, after setting up a meeting with Deaver to discuss the job feeler.
Fielding, who has joined a Washington law firm, said that his staff had looked into Lewis' status and that his Feb. 28 letter merely repeated findings from an earlier memo.