Bloomberg.com: U.S. | Abramoff Scandal Threatens to Derail Reed's Political Ambitions

Jan. 11 (Bloomberg) -- The Washington scandal over lobbyist Jack Abramoff may claim a casualty outside the nation's capital: Ralph Reed, a former presidential-campaign adviser who once headed one of the U.S.'s largest Christian activist groups.

Disclosures that Reed once ran an anti-gambling campaign that was secretly financed by casino-owning clients of his friend Abramoff have damaged his ability to raise funds for a bid to become Georgia's next lieutenant governor, other Republicans say. That may undercut his chances of winning an office that he could use as a steppingstone to national political ambitions, they say.

Campaign-finance reports filed this week show that Reed, 44, lagged behind opponent Casey Cagle in fundraising for the July 18 Republican primary during the past six months, after collecting more than twice as much money as his rival before that. Cagle raised $667,000 from June 30 to Dec. 31 to Reed's $404,000.

``A lot of those big corporate donors are now hedging their bets,'' said Matt Towery, the 1990 Republican candidate for lieutenant governor, who was once a colleague of Reed's on Capitol Hill. ``Ralph faces a very difficult and now problematic candidacy.''

An Atlanta Journal-Constitution poll last month showed Cagle and Reed would perform about equally well against the Democrats in the November election. The poll was conducted by Zogby International before Abramoff pleaded guilty to fraud and conspiring to corrupt public officials.

For Reed, who once seemed invincible, with broad support in his party and wide name recognition, that isn't good news, said Towery, who now publishes Insider Advantage, a guide to politics.

Up the Ranks

Reed, who is making his first run for public office, climbed through the political ranks because of his connections in Christian and Republican circles. From 1989 to 1997, he ran the Christian Coalition of America, a then-powerful group founded by evangelist Pat Robertson. Reed served as a consultant to George W. Bush's 2000 presidential campaign and oversaw the Southeast region for his 2004 re-election.

Reed's fund-raising slowdown in the past six months coincided with the drumbeat of news about Abramoff and Reed's connections to him. Those ties are gaining more attention in the aftermath of Abramoff's Jan. 3 guilty plea and the widening probe into the potential bribery of lawmakers.

``There are concerns as to whether Ralph will continue to make headlines that are harmful to the party,'' said Eric Johnson, who as the Georgia Senate's president pro tem is a top Republican. Johnson said he's staying neutral in the primary election.

`Significant Doubts'

The Cagle campaign is playing off those concerns. ``The polling data we've seen as well as fund raising show how people in Georgia have significant doubts about whether they can trust Ralph,'' Cagle spokesman Brad Alexander said.

Reed is still ahead of Cagle, 39, in overall fundraising, having collected a total of $1.8 million to Cagle's $1.3 million.

``We raised more from more donors on our first report than our primary opponent has raised in two reports,'' Reed spokeswoman Lisa Baron said. ``It is not uncommon for second reports after such a strong first report to reflect the obvious, which is many donors have already contributed the maximum.''

Reed declined to comment for this article.

Tarnished Image

Reed's image as someone more interested in Christian causes than his own financial well-being has been tarnished by a stream of e-mails released by a Senate committee that investigated Abramoff's bilking of Indian-tribe clients.

``I need to start humping in corporate accounts,'' Reed wrote to Abramoff in 1998. ``I'm counting on you to help me with some contacts.''

In 2001 alone, he received more than $2.5 million from entities connected with Abramoff and partner Michael Scanlon, according to documents released by the Senate Indian Affairs Committee.

Abramoff and Scanlon used the organizations so Reed wouldn't be paid directly by their clients, who wanted to block new gambling competition. The e-mails show that Reed knew casino-owning tribes were the ultimate clients, though he says he wasn't paid with gambling proceeds.

``Had I known then what I know now, I would not have undertaken that work,'' Reed said in the text of a Dec. 9 speech to a Georgia youth group. ``On reflection and with the benefit of hindsight, it is clear it associated my longstanding opposition to gambling with those who did not share it and has caused difficulty for the faith community with whom I worked.''

Connections

Reed and Abramoff have known each other since the early 1980s, when they were leaders of the College Republicans along with another now-powerful Washington player, anti-tax activist Grover Norquist. They made an odd trio: Abramoff, an orthodox Jew who went to high school in Beverly Hills, California; Reed, a Christian southerner with boyish looks; and Norquist, a Massachusetts native with a penchant for dramatic monologues in his tax-cut crusade.

The three continued to work together until word broke that Abramoff may have defrauded his tribal clients. One, the Mississippi Band of Choctaw Indians, in 1999 donated money to Norquist's Americans for Tax Reform, which then wrote checks to Reed's anti-gambling coalition.

Cayman Islands

Reed also depended on Abramoff to help his political campaigns. In one e-mail exchange in 2001, he asked Abramoff to contribute to his successful bid to become state Republican chairman in Georgia. When Abramoff asked where to send the donation, Reed joked, ``The actual committee is `The Reed Family Retirement and Educational Foundation.' The address is 200 Bay Drive, Grand Cayman, BCI, R59876.''

Before the Abramoff scandal, Reed was the best known of the three because of his work for the Christian Coalition. By 1984, he had helped to re-elect Senator Jesse Helms in North Carolina by organizing a Christian conservative constituency that later became the foundation for Robertson's 1988 presidential bid.

The young Republicans following in Reed's footsteps -- students, budding activists and campaign managers -- now don't want him to run, said Charles Bullock, a political scientist at the University of Georgia in Athens.

``Without exception, they are hoping he's not on the ticket,'' Bullock said. One concern is ``that he gets the nomination, and then sometime in the fall the smoking gun shows up and he brings down Republicans,'' he said. ``The drumbeat is going to be playing throughout the year.''



To contact the reporters on this story:
Kristin Jensen in Washington kjensen@bloomberg.net;
Laurence Viele Davidson in Atlanta at lviele@bloomberg.net