White House Denied Senior Aides Had Role

By Mike Allen and Dana Milbank
Washington Post Staff Writers
Thursday, July 12, 2001; Page A01

Karl Rove, President Bush's senior adviser, was the Salvation Army's first White House contact in its effort to win approval of a regulation allowing religious charities to practice anti-gay workplace bias, administration officials said yesterday.

The revelation contrasts sharply with the administration's initial insistence that senior officials were not involved with the charity's request, which was hastily rejected Tuesday evening after a news account about the proposed regulation.

An internal Salvation Army document obtained by The Washington Post said the White House had made a "firm commitment" to issue a regulation protecting religious charities from state and city efforts to prevent discrimination against gays in hiring and providing benefits. To secure this commitment, the charity proposed spending nearly $1 million on lobbyists and strategists, and those it retained included a key player in the Bush presidential campaign and one of the campaign's top fundraisers.

The White House has denied that it promised the charity anything. But a White House official involved in the matter said yesterday that there was "an implied quid pro quo." This official said that Don E. Eberly, the deputy director of the White House Office of Faith-Based and Community Initiatives, had given the Salvation Army "an implicit understanding" that the administration would seriously consider the change.

The official said that Eberly, who founded the National Fatherhood Initiative in 1994, offered assurances to the Salvation Army both because he believed the regulatory change would be good public policy, and because he was so eager to win the Salvation Army's endorsement of Bush's "faith-based initiative." The initiative would make it easier for religious organizations to obtain federal funds for social services such as homeless shelters and drug-prevention counseling.

Dan Bartlett, a deputy assistant to the president, said Rove became aware of the issue earlier this year during a phone conversation with Mark Holman, who had been retained by the Salvation Army to lobby the White House. Holman, whose law firm, Blank, Rome, Comisky & McCauley, was described in the Salvation Army report as the "direct liaison with the White House staff," was until recently chief of staff to Gov. Tom Ridge of Pennsylvania, a presidential battleground state.

The Salvation Army report describes Holman as "highly involved in the Bush/Cheney campaign." Rove and Holman have been friends for 10 years, Bartlett said.

Bartlett said Holman offered the Salvation Army's help on the faith-based initiative and then said, "We have a regulatory issue -- a federal constitutional issue. Who should we talk to?" Bartlett said Rove referred Holman to the Office of Management and Budget as well as to the Office of Faith-Based and Community Initiatives. Bartlett said Holman later "stopped by and said 'Hi' to Karl" after a meeting with the faith-based office.

"That is the extent of Karl's involvement," Bartlett said. "They had no substantive discussions about the matter." Bartlett said Rove "doesn't think he was told" the specifics of what the Salvation Army wanted. Rove's office referred a call seeking comment to the White House press office.

A White House official close to the matter disputed this account. This official said, "Rove was intimately involved in courting the Salvation Army." A second administration official close to the matter confirmed that account. Both officials said Rove knew all about the regulatory request.

"Literally nothing occurs around here without his blessing," the first official said. "He's the air traffic controller. He says, 'Here's your problem. Here's your answer.' "

Rep. John Conyers Jr. (D-Mich.), ranking member of the House Judiciary Committee, said his office plans to request an investigation by the General Accounting Office if it doesn't receive a satisfactory explanation of events from the White House by week's end. "If this allegation is true, it is an inappropriate use of taxpayer funds at best and an illegal bribe at worst," Conyers said.

In addition to Holman, the Salvation Army assembled a team of lobbyists with strong ties to the Bush White House. It hired Stephen M. Minikes, a Washington lobbyist who was an early member of the Bush campaign's "Pioneers," those who raised at least $100,000 for Bush. The Salvation Army report says he was "deeply involved with President-elect George W. Bush's election campaign." The charity said it was paying his firm, Thelen Reid & Priest, $20,000 to $25,000 per month between May 2001 and January 2002, plus some expenses.

Asked last night whether he had been in contact with White House officials, Minikes replied: "It would be inappropriate" to comment. "I'm a lawyer and I don't discuss my clients' affairs."

The cooperation between the White House's Eberly and the Salvation Army began in February, an administration official said. By June, the charity issued a statement saying that it believed there was "great value" in the House legislation based on Bush's plan. The Salvation Army had not taken a position before on such a major political issue, and supporters of Bush's plan hailed the statement as "unprecedented."

A White House official who favored the regulatory change said, "It wasn't clear to anyone here that the federal government could do this."

Officials involved in the decision to drop consideration of the regulation said it was reached at about 4 p.m. Tuesday after a strong consensus was reached among the half dozen or so officials who were reviewing the request. Bush had traveled to New York that day. The issue and the way to handle the public relations crisis were hotly debated in meetings and calls to Air Force One as Bush traveled back from New York.

As the White House worked to calm the furor over the Salvation Army flap, the House Ways and Means Committee yesterday approved a component of Bush's faith-based plan, a proposal to allow those who don't itemize their taxes to deduct charitable contributions. The committee scaled back the plan to just $6.3 billion over 10 years from the $84 billion Bush proposed.

The White House nevertheless hailed the passage by the committee as a major victory. "This legislation will stimulate more charitable giving and support faith-based and community organizations in their efforts to help those in need," Bush said in a statment. "I will continue to work on a bipartisan basis with members of the House and the Senate to implement my faith-based and community initiative."

Staff Writer Hanna Rosin contributed to this report.

© 2001 The Washington Post Company

-- Cherri (jessam6@home.com), August 21, 2001