WASHINGTON-In the private sector, he has represented Pacific Telesis, Bell Atlantic Corp., Lockheed Martin and other high-tech corporate giants. In the world of politics, his No. 1 client is Albert Gore Jr.
The inside-outside game of Peter Knight has paid off handsomely in recent years. But at what cost, to him and the man who would be king?
Now, as Gore’s political odyssey winds its way toward a presidential run in 2000, the question is whether Knight, the embattled rainmaker, is still a valued asset in the vice president’s inner circle or has become a political liability at a time when Democratic campaign fund-raising scandals have all but erased Gore’s Boy Scout image.
“Peter Knight has become expendable for Gore. Gore needs to get rid of him,” said Dick Morris, the political strategist who before bowing out because of a sex scandal engineered Clinton’s political rehabilitation after the Republican takeover of Congress in the 1994 midterm election.
“I don’t think Peter did anything wrong,” Morris said. “I think Peter is honest. It’s unfair that he would have to leave. But life’s unfair.”
Morris described Knight as very genial, well organized and a good technician, but definitely not a strategist.
Knight has been with Gore from the start, first as an administrative assistant 20 years ago to the then-freshman Tennessee congressman. He headed Gore’s failed ’88 presidential effort, but rebounded as Gore’s point man in the successful ’92 vice-presidential run.
Four years later, Knight was campaign manager of the victorious ’96 Clinton-Gore re-election ticket.
Knight, 47, declined to be interviewed for this article, which is based on interviews with informed government and private-sector sources and on numerous news accounts.
Knight is a key figure-but not necessarily a target-in three Justice Department investigations, two of which (the 20-year, $400 million lease between the Federal Communications Commission and the Portals and the $33 million Department of Energy grants to Molten Metal Technology) grew out of House Commerce Committee probes.
Knight represents Portals developer Franklin Haney and Molten Metal, a waste management firm in Massachusetts that paid him $7,000 a month and stock options. The other Justice investigation in which Knight’s name pops up involves the Department of Interior’s rejection in 1995 of a casino license for three Wisconsin Native American tribes.
Roy Neel, a former Gore aide who heads the United States Telephone Association and joins Knight as one of Gore’s confidants, believes the investigations involving Knight are politically motivated. Whether Knight is the victim of what First Lady Hillary Rodham Clinton calls “a vast right-wing conspiracy” is unclear.
“I am confident Peter has done nothing unscrupulous, unethical or anything that would put him at risk in playing a role in the future of the vice president,” said Neel, who relies on the Wunder, Knight, Levine, Thelen & Forsey firm for legal and lobbying help in the nation’s capital.
Neel said Knight’s firm represented USTA before he left his job as a Gore aide at the White House several years ago to become head of the telephone trade association.
“The investigations have been very frustrating for Knight,” said Neel. “This is a mean-spirited town.”
Besides Knight himself, the other common thread running through all three Justice probes is Democratic campaign contributions: $230 million from Portals developer Haney; $130,000 from Molten Metal executives; and $300 million from Indian tribes in Minnesota and Wisconsin that opposed casino competition from other Wisconsin tribes.
Congressional and Justice investigators are examining whether the Clinton administration traded favors for campaign donations from businesses represented by Knight and others with close ties to the White House.
In probes involving Knight, congressional investigators, at least, do not necessarily buy the explanation that campaign contributions by those who benefited from high-level lobbying were mere coincidences.
“It’s very clear Mr. Knight played a key role in making the Portals’ deal happen,” said Ken Johnson, a spokesman for House telecommunications subcommittee Chairman Billy Tauzin (R-La.).
Johnson has been threatened with legal action by Haney’s attorney for statements made to the press on the Portals controversy.
Tauzin’s request last November to launch a criminal investigation of the Portals lease prompted the Justice Department recently to roll the matter into the larger campaign-finance investigation by the 120-person FBI task force.
“From the information we’ve received, Mr. Haney in all likelihood would not have become involved in the project without Mr. Knight’s persistent urging,” Johnson stated.
He added, “The key to figuring out the whole Portals deal is breaking down the relationship between Hundt, Haney and Knight. The footprints all lead to the vice president’s doorsteps.”
Haney, Knight and former FCC chairman Reed Hundt all are close to Gore. Gore, through a spokesperson, previously said the vice president had no involvement in the Portals lease.
Hundt, who has been criticized for pulling back his opposition to the Portals move after Knight became involved with Haney, will be questioned by House investigators this week. Hundt also has denied any wrongdoing.
In the Portals and Molten Metal cases, Knight and the role he played are constants.
Knight was the great facilitator who opened doors in official Washington to put clients together with federal officials in position to influence government contracts and policies.
Knight, for example, helped friend Robert Peck get a job in September 1994 with the Hundt FCC. Peck volunteered to work on the Portals lease because of his real-estate legal background. Peck met with Haney in Knight’s office in the summer of 1995, though this meeting was never officially accounted for by the FCC.
Later, Knight assisted Peck in finding a high-ranking position in December 1995 at the General Services Administration, the government’s real-estate agent that wants the FCC in the Portals.
Peck also declined to comment.
House investigators suspect Knight may have received an illegal $1 million kickback from Haney, a long-time Gore pal who specializes in complex, tax-free municipal-bond projects and government real-estate deals.
Ken Vest, a spokesman for Haney, insists the $1 million-which was invoiced to Haney on the same Jan. 3, 1996, date that a supplemental Portals lease was signed-covers legal work for a dozen projects.
Yet no one has explained what the other projects were that Haney paid Knight for and what legal work Knight did for Haney prior to 1995. Moreover, the one-time $1 million payment is inconsistent with the project-by-project billing arrangement between Knight and Haney.
Indeed, House investigators said Bernie Wunder, former managing partner of Wunder, Knight, Levine, Thelen & Forcey and a former House telecom counsel, could not recall anyone in his firm ever receiving a one-time performance payment as big as $1 million.
The law bans contigency fees for assistance in soliciting federal contracts.
Haney’s lawyer Stanley Brand has refused to waive attorney-client privilege to prevent House investigators from examining Knight’s notes and records relating to the Portals.
The House Commerce Committee has accused Haney of blocking the investigation, and is expected to decide soon whether to subpoena the Tennessee developer, Knight and others.
Haney, once in Knight’s hands, requested and received various concessions from GSA. While getting the FCC in the Portals was critical to Haney, the Tennessee developer needed other U.S. government breaks to lure communications law firms, retail shops and rest
aurants away from present FCC headquarters in busy downtown Washington, D.C., to bland Southwest Washington. Haney wanted a package deal.
A recent Gene
ral Accounting Office report concludes the Portals, despite its top-dollar square footage cost, is still a good deal for consolidating the FCC’S eight or nine offices.
So far, taxpayers have paid $7 million in rent for the vacant Portals II facility. The FCC will have a $14 million bill if the agency moves into the Portals in July.
Communications lawyers and at least one key FCC official have been accused of trying to thwart the FCC relocation, which remains in limbo 10 years later. An August 1994 court order forced GSA to do business with Portals, but in dispute is whether the ruling ties the FCC to the Portals.
Today, not much has changed. The FCC refuses to move into the Portals until safety concerns are addressed.
