For the founding partners of Black Manafort Stone & Kelly -- movement conservatives who rose through the ranks of right-wing Republican politics to ride the crest of the Reagan revolution, securing for themselves a world of Mercedeses, Jaguars and plush offices overlooking the Potomac waterfront -- 1988 was a year to invest in their future. The lobbying firm's revenues from foreign governments and corporations had fallen from $2.1 million in 1986 to $1.2 million in 1988, but these accounts were not the principal concern of the company's six partners -- four conservative Republicans and two Democrats known for their gold-plated connections to campaign money and Capitol Hill. For the GOP arm of the partnership, 1988 was the year for stepped-up investment in an enterprise that has paid off handsomely during the firm's brief, nine-year history: presidential politics. Two of the partners, Charles Black and Roger Stone, spent most of last year as senior campaign strategists, first with Jack Kemp, then with George Bush. A third partner, Paul J. Manafort, ran the Republican National Convention in New Orleans for Bush, and another former colleague, Lee Atwater, was the overall manager of Bush's presidential campaign. "If politics has done anything for us, it's taught us to treat everything as a campaign," said Manafort. "You have to have a strategy. The reason we are successful is that we are strategists." Manafort is now a central figure in the congressional inquiry into fees paid to Republican consultants to win approval of housing subsidies from the Department of Housing and Urban Development. According to his own testimony, the firm used its political influence with appointed HUD officials to get lucrative benefits for a project in which Manafort had invested. So far, the unwelcome publicity from the HUD probe has had no discernible effect on the floodtide of new business that began to flow toward Black Manafort Stone & Kelly on Nov. 9, the day after Bush's decisive presidential election victory over Massachusetts Gov. Michael S. Dukakis. That day, the Union for National Action (UNA) -- the Philippines political party tied to Vice President Salvador Laurel -- signed a contract to pay the firm $950,000 a year to represent its interests in the United States. The government of Kenya signed up for $500,000 a year on April 1; in July, Black Manafort Stone & Kelly persuaded Zaire to sign for $1 million a year. "There are three more that are about to break," Manafort said in a recent interview. "I've got handshakes." He mentioned possible clients in Africa, Europe and South America. Together with the firm's existing $600,000-a-year contract with Jonas Savimbi and the UNITA rebels in Angola, and lesser contracts with Somalia and Peru, revenues from foreign clients this year should exceed $5 million. On the domestic front, the post-election period has produced at least six new clients for a total client base of 36. Domestic clients pay at least $10,000, and often $25,000 or more, every month according to Black. To a list of clients that by 1988 already included Allied Signal, Donald Trump, Aetna Life and Casualty, Bethlehem Steel, Johnson & Johnson, Trans World Airlines and Union Pacific, the firm has added in 1989 the Mortgage Insurance Cos. of America, the Large Public Power Council, the Air Transport Association, the Edison Electric Institute and the Circle K Corp. "I think I've got -- if you just want to call it access -- I guess I've got access to just about anybody in the government, but I don't have a personal relationship with all of them," Black said. In the Cabinet, "I think I know most of them, through the experience of campaigns and around town. I guess I know most of the people in sensitive positions in the administration." The firm's presence in Washington is pervasive, ranging from debt negotiations for Peru and Somalia with the World Bank and the International Monetary Fund to lobbying in behalf of GTECH, a Rhode Island firm, for the placement of lottery terminals with handicapped vendors on federal property; from winning extension of the SH-2F helicopter production line for Kaman Aerospace to seeking approval for Allied-Signal to import, process and export uranium from South Africa; from winning foreign trade zone status for a Chrysler-Mitsubishi plant to representing Puerto Rico, St. Lucia and the Dominican Republic during the Reagan administration's development of the Caribbean Basin Initiative. President Bush has himself taken two visible steps of key importance to Black Manafort Stone & Kelly clients. On Jan. 6, before he was inaugurated, Bush sent a letter to Savimbi pledging continued U.S. military and diplomatic support of UNITA, which now gets an estimated $50 million in covert U.S. aid, according to government sources. Last month, Bush fulfilled a campaign promise and extended import restrictions on foreign steel, an extension sought by, among others, client Bethlehem Steel -- although the 2 1/2-year extension was not as long as the four to five years sought by the industry. Asked which White House officials he had contacted in behalf of Bethlehem Steel, Black said, "I'd rather not get into that." Was it President Bush? "No." White House Chief of Staff John H. Sununu? "I'd rather not get into it . . . . I will say this, that if you look over the list of decision makers in the administration on that issue, I've probably talked to just about all of them. I've not imposed myself on the president on that." But just as the firm is moving to secure and expand a blue-chip client base, the HUD scandal may yet pose a serious test of its strategic abilities. Called to testify before the House Government Operations Committee on June 20, Manafort, by his own account, failed to fully prepare for cross examination and left out at least five projects when he was asked enumerate the HUD projects that he and his firm had worked on -- work that produced over $400,000 in consulting fees. During that same cross-examination, Manafort agreed that the firm's work on a New Jersey HUD project could be described as "influence peddling," an awkward admission that made the evening news and the next morning's front pages. Since testifying, Manafort and his partners have been forced to send a series of letters to the committee listing seven other projects for which the firm received contingency fees and naming eight other clients who pay retainer fees in part for work securing HUD contracts. "They've handled this about as well as Dukakis handled Willie Horton," a delighted Democratic strategist commented. In the acutely sensitive world of Washington lobbying, the central danger to Black Manafort Stone & Kelly is that excessive unfavorable public exposure could turn the firm's political connections from assets into liabilities. Every practitioner of the lobbying arts in Washington remembers how Michael K. Deaver and Associates became "radioactive" after Deaver was accused of lying to a congressional committee. Deaver's firm fell from the height to the nadir of power almost overnight. If the firm cannot contain adverse publicity, that failure ultimately could suggest to clients that Black Manafort Stone & Kelly has been unable to perform a lobbying firm's most basic function: to shape public perceptions through "spin control" and to truncate controversy affecting a client -- or in this case, itself. In the firm's early days -- Ronald Reagan's first term -- its strategy was relatively simple. Stone, Black and Manafort, three young veterans of intensely conservative political wars in the College Republicans and Young Republicans, all co-founders of the National Conservative Political Action Committee (NCPAC), put together a partisan political consulting firm that lobbied on the side. At the time, there was a vacuum in the lobbying community: 25 years of solid Democratic control of both houses of Congress meant that few firms were prepared to deal with the sudden, and unexpected, Republican takeover of the Senate. Even firms with good Republican connections tended to be linked to the establishment wing of the GOP, and not to the ascendant conservatives brought in by Reagan to fill positions throughout the federal apparatus. Midway through the Reagan years, after the Democrats had reestablished firm control of the House, the firm realized that it needed Democratic help. In early 1985, the firm sent a shock wave through the political-lobbying community with the announcement that it had taken on as a new partner Peter Kelly, outgoing finance chairman of the Democratic National Committee, a huge barrel of a man who boasts of "managing" the raising of over $90 million for Democrats. The announcement signaled that the Reagan revolution had staying power in the back corridors where connections translate into money. In a major acquisition drive, the firm picked up not only Kelly, but Democrat James Healey, who since 1970 had been principal political operative for House Ways and Means Committee Chairman Dan Rostenkowski (D-Ill.). In the lobbying marketplace, "Jim {Healey} was considered one of the hottest people coming off the Hill," Manafort said. According to other firms that wanted to hire Healey, Black Manafort Stone & Kelly was willing to pay a high price for him -- more than $400,000 a year to start. Just as the firm's lobbying arm was turning bipartisan, the Republican principals in 1985 added Atwater as a partner in two sister companies handling political work: Campaign Consultants Inc. and National Media. Atwater, now chairman of the Republican National Committee, remains a "passive partner" who is still listed on corporate papers as a shareholder of CCI and National Media, but gets no dividends or other payments, according to Black. The partners of Black Manafort Stone & Kelly refuse to discuss their individual incomes, although they say the lobbying firm pays each less than $400,000. Other sources familiar with the workings of the firm say the total benefits to each partner this year are expected to exceed $500,000. In any case, the investment in Healey and Kelly paid off: Black Manafort Stone & Kelly has become one of the hottest lobbying operations of the Reagan-Bush decade. "I don't think we've taken any one {client} on in the last two or three years for less than $10,000 to $12,000 a month, on an annual retainer," said Charles Black last month. "We did in the old days before Kelly came on board." Healey brought direct access to Rostenkowski, who, along with House Energy and Commerce Committee Chairman John D. Dingell (D-Mich.), is perhaps the most important member of Congress from the vantage point of corporate America. In one single action, Healey may have proved his worth to the firm when he took over responsibility to persuade Rostenkowski to get a special "transition rule" placed in the 1986 tax reform bill that saved Chrysler-Mitsubishi -- and cost federal taxpayers -- an estimated $58 million. Another of the firm's clients, Johnson & Johnson, was the beneficiary of a separate "transition rule" worth an estimated $38 million. While the partners of Black Manafort Stone & Kelly play a critical role in obtaining clients and opening administration and Capitol Hill doors, a large part of the day-to-day work of contacting congressional and agency staffers, dealing with the World Bank and International Monetary Fund bureaucracies, and sitting through committee hearings is performed by a cadre of 14 professional staffers. In the firm's foreign-agent reports to the Justice Department, for example, there are random appearances of the partners, in such contexts as Manafort hosting "a social dinner" with St. Lucia Prime Minister John Compton and M. Peter McPherson, head of the U.S. Agency for International Development; or Black setting up a dinner between former client Rupert Murdoch, the commmunications magnate, and then-Federal Communications Commission Chairman Mark Fowler. The vast preponderance of work on behalf of the clients is, however, performed by the staff. In March 1986, for example, reports filed with the Justice Department show that staff members of the firm working on behalf of the Bahamas contacted Ray Nelson, a White House aide; Diane Graham and Linda Doherty, in the international narcotics section of the State Department; Blanche Shanks and Bill Gilligan, of the Immigration and Naturalization Service; Bob Warren of the Customs Service; Kathy Chase, a staffer on House narcotics task force; Jon Bolton, at the Justice Department; Bill Smith, of the House Appropriations Committee staff; Chuck Parkinson and Bob Mills of the Senate Appropriations Committee staff; Ted Mehl, a House Government Operations Committee staffer; Maxine Champion, of the Ways and Means Committee staff; Theresa Butler, charge d'affaires at the Bahamian Embassy; and Sue Diolis, on the White House staff. On the Democratic side, the staff includes Don Sweitzer, who just left his post as the DNC's fundraising director; Scott Pastrick, who was deputy fundraising chairman for the Mondale campaign; Jonathan Keyserling, who served as tax counsel to Rep. Robert T. Matsui (D-Calif.); and David Fenig, who also specialized in trade and tax policy for Sen. Spark M. Matsunaga (D-Hawaii). Pastrick said when he came to the firm he got "the normal kidding" from Democratic friends, people who asked, "How can you? They are political; why are you doing that?" Pastrick, whose father is a four-term Democratic mayor of East Chicago, Ind., and a member of the DNC, said, "The reason I came here was I had a firm commitment from the Republican partners that it {the firm} was going to remain a corporate representation firm . . . . Corporate America deserves representation, and bipartisan representation is going to serve a client much better than partisan representation." Black contends that there are no ethical problems in lobbying public officials for whom the consulting firm has worked, or in lobbying the huge network of Bush and Reagan campaign workers who have gotten jobs in the administration. "In the administration, everybody in a presidential campaign is a prospect for getting a job in the government, but you are working with these people on a peer basis or sometimes they are your superiors. It is not like I hired {Commerce Secretary and Bush campaign finance chairman} Bob Mosbacher and gave him his start in politics so he owes me once he's in government," Black said. Instead of posing an ethical question, Black Manafort Stone & Kelly regards lobbying former campaign officials now in government and candidates elected to public office with the partners' help as opportunities to provide better service to its clients. "I think there is a great advantage in dealing with people who you personally know and trust . . . most importantly, {the question is} can they {officials} trust you {the lobbyist} to tell the truth . . . . I think there is an advantage to the client and to the person in position of authority to deal with someone they know and trust," Black said. When considering possible foreign clients, Manafort said the firm will only work for countries considered U.S. allies. In its work for corporations, the firm is not constrained by the conservative ideology of its founders. For example, it fought the Reagan administration in an unsuccessful effort to win passage of protectionist textile legislation backed by the domestic textile industry. The firm often seeks higher U.S. foreign aid for its foreign clients, a use of tax dollars disapproved of by most rank-and-file GOP activists. Partners in the firm, particularly Black, have played key roles in developing strategies to mobilize the Christian right in behalf of Reagan and other Republican candidates, but Black and his partners have no qualms about representing such gambling interests as the New Jersey Casino Association and GTECH. "I don't have any philosophical problems with that," Black said.