Barking up wrong tree, again

Ralph Reed, who has condemned gambling as a cancer on the American body politic, quietly worked five years ago to kill a proposed ban on Internet wagering — on behalf of a company in the online gambling industry.

Reed, now a Republican candidate for lieutenant governor of Georgia, helped defeat the congressional proposal despite its strong support among many Republicans and conservative religious groups. Among them: the national Christian Coalition organization, which Reed had left three years earlier to become a political and corporate consultant.

A spokesman for Reed said the political consultant fought the ban as a subcontractor to Washington lobbyist Jack Abramoff's law firm. But he said Reed did not know the specific client that had hired Abramoff: eLottery Inc., a Connecticut-based company that wants to help state lotteries sell tickets online — an activity the gambling measure would have prohibited.

Reed declined to be interviewed for this article. His aides said he opposed the legislation because by exempting some types of online betting from the ban, it would have allowed online gambling to flourish. Proponents counter that even a partial ban would have been better than no restrictions at all.

Anti-gambling activists say they never knew that Reed, whom they once considered an ally, helped sink the proposal in the House of Representatives. Now some of them, who criticized other work Reed performed on behalf of Indian tribes that own casinos, say his efforts on eLottery's behalf undermine his image as a champion of public morality, which he cultivated as a leader of the religious conservative movement in the 1980s and '90s.

It flies in the face of the kinds of things the Christian Coalition supports, said the Rev. Cynthia Abrams, a United Methodist Church official in Washington who coordinates a group of gambling opponents who favored the measure. They support family values. Stopping gambling is a family concern, particularly Internet gambling.

Reed's involvement in the Internet Gambling Prohibition Act of 2000, never previously reported, comes to light as authorities in Washington scrutinize the lobbying activities of Abramoff, a longtime friend who now is the target of several federal investigations.

The eLottery episode echoes Reed's work against a lottery, video poker and casinos in Alabama, Louisiana and Texas: As a subcontractor to two law firms that employed Abramoff, Reed's anti-gambling efforts were funded by gambling interests trying to protect their business.

After his other work with Abramoff was revealed, Reed asserted that he was fighting the expansion of gambling, regardless of who was paying the bills. And he said that, at least in some cases, his fees came from the nongaming income of Abramoff's tribal clients, a point that mollified his political supporters who oppose gambling. With the eLottery work, however, Reed has not tried to draw such a distinction.

By working against the Internet measure, Reed played a part in defeating legislation that sought to control a segment of the gambling industry that went on to experience prodigious growth.

Since 2001, the year after the proposed ban failed, annual revenue for online gambling companies has increased from about $3.1 billion worldwide to an estimated $11.9 billion this year, according to Christiansen Capital Advisers, a New York firm that analyzes market data for the gambling industry.

Through a spokesman, Abramoff declined to comment last week on his work with Reed for eLottery.

Federal records show eLottery spent $1.15 million to fight the anti-gambling measure during 2000. Of that, $720,000 went to Abramoff's law firm at the time, Preston Gates Ellis & Rouvelas Meeds of Washington. According to documents filed with the secretary of the U.S. Senate, Preston Gates represented no other client on the legislation.

Reed's job, according to his campaign manager, Jared Thomas, was to produce a small run of direct mail and other small media efforts to galvanize religious conservatives against the 2000 measure. Aides declined to provide reporters with examples of Reed's work. Nor would Thomas disclose Reed's fees.

Since his days with the Christian Coalition, Reed consistently has identified himself as a gambling opponent. Speaking at a National Press Club luncheon in Washington in 1996, for instance, Reed called gambling a cancer and a scourge that was responsible for orphaning children ... [and] turning wives into widows.

But when the online gambling legislation came before Congress in 2000, Reed took no public position on the measure, aides say.

In 2004, Reed told the National Journal, a publication that covers Washington politics, that his policy was to turn down work paid for by casinos. In that interview, he did not address working for other gambling interests.

Some anti-gambling activists reject Reed's contention that he didn't know his work against the measure benefited a company that could profit from online gambling.

It slips over being disingenuous, said the Rev. Tom Grey, executive director of the National Coalition Against Legalized Gambling, who worked for the gambling ban. Jack Abramoff was known as 'Casino Jack' at the time. If Jack's doling out tickets to this feeding trough, for Ralph to say he didn't know — I don't believe that.

A well-kept secret

When U.S. Rep. Bob Goodlatte (R-Va.) first introduced the Internet gambling ban, in 1997, he named among its backers the executive director of the Christian Coalition: Ralph Reed.

In remarks published in the Congressional Record, Goodlatte said, This legislation is supported ... across the spectrum, from Ralph Reed to Ralph Nader.

But Reed's role in the ban's failure three years later was a well-kept secret, even from Goodlatte. That's in part because Reed's Duluth-based Century Strategies — a public affairs firm that avoids direct contact with members of Congress — is not subject to federal lobbying laws that would otherwise require the company to disclose its activities.

We were not aware that Reed was working against our bill, Kathryn Rexrode, a spokeswoman for Goodlatte, said last week.

Several large conservative religious organizations, with which Reed often had been aligned before leaving the Christian Coalition in 1997, joined together to support the legislation. Those groups included the Southern Baptist Convention, the United Methodist Church, Focus on the Family, the Family Research Council — and the Christian Coalition.

In addition, four prominent evangelical leaders signed a letter in May 2000 urging Congress to pass the legislation: James Dobson of Focus on the Family; Pat Robertson of the Christian Coalition; Jerry Falwell, formerly of the Moral Majority; and Charles Donovan of the Family Research Council.

Among the other supporters: the National Association of Attorneys General, Major League Baseball and the National Association of Convenience Stores, whose members are among the largest lottery ticket sellers.

Opponents, in addition to eLottery and other gambling interests, included the Clinton administration, which argued that existing federal laws were sufficient to combat the problem. In a policy statement, the administration predicted the measure would open a floodgate for other forms of illegal gambling.

To increase the measure's chances of passage, its sponsors had added provisions that would have allowed several kinds of online gambling — including horse and dog racing and jai alai — to remain legal.

Thomas, Reed's campaign manager, said in a statement last week that those exceptions amounted to an expansion of online gambling: Under the bill, a minor with access to a computer could have bet on horses and gambled at a casino online.

Thomas' statement claimed that the Southern Baptists and the Christian Coalition opposed the legislation for the same reason as Reed.

Actually, the Southern Baptist Convention lent its name to the group of religious organizations that backed the legislation. But as the measure progressed, the convention became uncomfortable with the exceptions and quietly spread the word that it was neutral, a spokesman said last week.

As for the Christian Coalition, it argued against the exceptions before the vote. But it issued an action alert two days after the ban's defeat, urging its members to call Congress and demand the legislation be reconsidered and passed.

In fact, the letter signed by the four evangelical leaders indicated a bargain had been reached with the Christian Coalition and other religious groups. In exchange for accepting minor exemptions for pari-mutuel wagering, the evangelicals got what they wanted most — a ban on lottery ticket sales over the Internet. Other anti-gambling activists say the exceptions disappointed them But they accepted the measure as an incremental approach to reining in online gambling.

We all recognized it wasn't perfect, Abrams, the Methodist official, said last week. We decided we weren't going to let the best be the enemy of the good.

Any little thing, she said in an earlier interview, would have been a victory.

Plans to expand

Founded in 1993, eLottery has provided online services to state lotteries in Idaho, Indiana and Maryland and to the national lottery in Jamaica, according to its Web site. It had plans to expand its business by facilitating online ticket sales, effectively turning every home computer with an Internet connection into a lottery terminal.

The president of eLottery's parent company, Edwin McGuinn, did not respond to recent requests for an interview. Earlier this year, he told The Washington Post that by banning online lottery ticket sales, the 2000 legislation would have put eLottery out of business. We wouldn't have been able to operate, the Post quoted McGuinn as saying.

Even with Abramoff and other lobbyists arguing against the measure, and Reed generating grass-roots opposition to it, a solid majority of House members voted for the measure in July 2000.

But that wasn't enough. House rules required a two-thirds majority for expedited passage, so the legislation died.

In addition to hiring Abramoff's firm to lobby for the measure's defeat, eLottery paid $25,000 toward a golfing trip to Scotland that Abramoff arranged for Rep. Tom DeLay (R-Texas) — then the House majority whip, later the majority leader — several weeks before the gambling measure came up for a vote, according to the Post. Another $25,000 for the trip came from the Mississippi Band of Choctaw Indians, an Abramoff client with casino interests, the Post reported. The trip, which is under review by the House Ethics Committee, was not related to DeLay's indictment on a conspiracy charge last week.

The campaign against the Internet gambling ban was one of several successful enterprises in which Abramoff and Reed worked together.

The Choctaws paid for Reed's work in 1999 and 2000 to defeat a lottery and video poker legislation in Alabama. In 2001 and 2002, another Abramoff client that operates a casino, the Coushatta Tribe of Louisiana, put up the money for Reed's efforts in Louisiana and Texas to eliminate competition from other tribes. Reed was paid about $4 million for that work.

Abramoff, once one of Washington's most influential lobbyists, now is under federal indictment in a Florida fraud case and is facing investigations by the Senate Indian Affairs Committee and the Justice Department into whether he defrauded Indian tribes he represented, including those that paid Reed's fees. Reed has not been accused of wrongdoing.

Reed and Abramoff have been friends since the early 1980s. That's when Abramoff, as chairman of the national College Republicans organization, hired Reed to be his executive director. Later, Reed introduced Abramoff to the woman he married.

In an interview last month about his consulting business, Reed declined to elaborate on his personal and professional relationships with Abramoff. At one point, Reed was asked if Abramoff had hired him to work for clients other than Indian tribes.

Reed's answer: Not that I can recall.