Key Bush Reelection Aides Mix Business With Politics : Campaign: Top staffers are keeping their jobs as lobbyists, raising questions about ethics, dual loyalties.

When President Bush tried early this year to enlist public relations executive James Lake as a member of his senior staff, the answer--for then--was no.

Offered the post of White House communications director, Lake told Bush aides that he wanted to help the President in any way he could. But he said he felt an obligation to maintain his ties to corporate clients. Under federal ethics laws, he could not maintain such a dual allegiance.

It was not long, however, before Lake signed on instead as deputy manager of Bush’s reelection campaign, a position that comes with the kind of influence usually enjoyed only within the West Wing itself.

For Lake, as for others who take their places each morning at the campaign’s senior staff meeting, the unpaid job has a particular attraction. From an anonymous office building a few blocks from Pennsylvania Avenue, the advisers function in some ways as a shadow White House.

The campaign staff, however, is not governed by federal ethics standards. And Lake--like campaign Chairman Robert M. Teeter, campaign manager Frederick V. Malek and senior adviser Charles Black--remains free to serve other masters.

Within the uppermost echelon of the Bush camp, such dual loyalties have become commonplace.

Under the rules, Lake, who helps advise the White House on scheduling and other arrangements for Bush campaign appearances, also is permitted to work as chairman of Robinson, Lake, Lerer & Montgomery, a Washington public relations and consulting firm. From that position, he continues to advise corporate clients, including the Abu Dhabi investors who are the principal owners of the Bank of Credit & Commerce International and the Japanese Auto Parts Industry Assn.

Similarly, Black, who as unpaid senior adviser to the campaign functions as one of its top strategists, can continue to manage Black, Manafort, Stone & Kelly, a Washington lobbying firm. He spends about half of each day working for the campaign and the rest pursuing the interests of corporate clients, sometimes telephoning Administration officials on their behalf.

Among his business projects earlier this year was an effort to assist a coalition that represented Japanese fishing interests in a bid for wider rights in U.S. waters. Together with Lake’s work for foreign clients, that lobbying became a source of controversy when Bush’s Republican challenger, Patrick J. Buchanan, attacked the advisers as disloyal to U.S. interests. Black said he now works only on behalf of U.S. clients.

As the paid campaign chairman, Teeter attends two top-level White House strategy meetings every day and provides advice to Bush by telephone as often as several times a day, aides said. At the same time, he owns Michigan-based Coldwater Corp., which provides “strategic advice” to a wide range of U.S. corporate clients, including Ford Motor Co. He also sits on four corporate boards, including those of United Parcel Service Inc. and Ford.

Malek, the campaign manager, also is salaried. He attends the daily White House meetings and exerts an influence regarded as second only to Teeter. In joining the campaign, he resigned his position as a senior official of Northwest Airlines Inc., but he continues to hold a major financial interest in the company. Public records show that he sits on nine other corporate boards.

To guard against potential conflicts of interest, the White House and the Bush campaign have adopted rules restricting the conduct of officials who work on behalf of outside clients.

Bush aides describe the standards as perhaps the most restrictive ever adopted by a presidential campaign and sufficient to guard against even the appearance of a conflict of interest.

To minimize the danger that the outside advisers would put pressure on the Administration, for example, the rules require all contacts with the government to be processed through a “funnel” established by White House Chief of Staff Samuel K. Skinner and other senior White House officials.

Campaign advisers who have been involved with particular issues on behalf of a client within the last year are prohibited from discussing that issue with Administration officials on behalf of the campaign. But they can continue to lobby for their clients as long as they make clear that they are not wearing their campaign hats at the time.

And senior campaign officials who have dealings with the Administration on substantive policy matters are expected to disclose to the White House and the campaign counsels their financial and business interests, although those disclosures are not made public.

At least nine senior officials have filed internal disclosures acknowledging that they have outside business ties, the Bush campaign says.

Bush aides say Teeter and other campaign officials have been conscientious about recusing themselves from discussions of issues in which their clients are involved. Teeter, for example, steadfastly declined to become involved with discussions of Bush campaign trips to Michigan because the auto industry would have been certain to come up, said C. Boyden Gray, the White House counsel.

Gray said Teeter’s relationship with Ford would not necessarily bar him from such strategy sessions. But when conversation among a group of officials in a White House anteroom turned one day to the Clean Air Act, he said, Teeter got up and left the room.

In an interview, Lake resisted suggestions that the parallel work he does for clients and the campaign poses any problem. “I don’t think there’s any conflict at all,” he said. “None whatsoever. Because if there were, I wouldn’t do it.”

It was partly out of sensitivity to such charges that the White House and the campaign moved to draft the guidelines earlier this year, advisers said.

But they said they were determined that the rules permit campaign officials to maintain a level of business activity that would have been forbidden if they held top government jobs.

“It would be a sad day in American politics if we as a campaign had to exclude people with private business dealings,” said Bobby Burchfield, general counsel to the 1992 campaign of Bush and Vice President Dan Quayle.

Aides to Bush insist that his campaign advisers should be permitted to wear more than one hat because they are not directly involved in policy-making. “There’s a huge difference between being on the inside and being on the outside,” Gray said. “They are not government officials. They do not wear the color and authority of government officials.”

Black said it would be unfair to hold campaign officials to the same standards as those who work for the White House. “We don’t make policy at the campaign,” he said, “and we don’t make decisions that affect what the government does.”

But many critics--including some Republicans--regard these ongoing relationships as troubling. Politics and policy cannot help but become intertwined when the priority is reelection, they noted.

The uneasiness among GOP workers is illustrated by a nickname given to the campaign’s 15th Street headquarters. They call it “Bush Inc.”

The White House refused to list the clients represented by the campaign officials or to identify the policy areas that they have agreed to avoid under the ethics guidelines imposed this spring. And officials who continue to work on behalf of outside clients said they see no need to make such affiliations public. “What you’re doing for your client is confidential,” Black said in an interview. “Sometimes there’s even a competitive dimension.”

Lobbying records on file with Congress show that Black’s consulting and public relations firm collected fees of $597,000 from 27 clients for the first three months of this year.

The list included American Mobile Satellite Corp., which paid a three-month fee of $30,000 for the firm’s help in pursuing a Federal Communications Commission satellite license and a federal appropriation from the National Aeronautics and Space Administration for a satellite launch.

Bethlehem Steel Corp. paid $22,500 during the quarter to keep abreast of defense authorization and appropriations issues, and real estate magnate Donald Trump paid $18,000 for work in “aviation and surface transportation,” the records show.

Black’s firm also collected a three-month fee of $60,000 from the American Society of Plastic and Reconstructive Surgeons for information about “legislative oversight of the Food and Drug Administration in regard to federal regulation of breast implants.”

Links between campaign work and business consulting have become increasingly common in both parties. A new class of political consultant, expert in the task of getting politicians elected, has begun increasingly to spend off-years and off-hours dispensing guidance to better-paying corporate clients.

Michael McCurry, who was a top aide to the presidential campaign of Sen. Bob Kerrey (D-Neb.), remained at the same time a partner in Lake’s consulting firm. Ronald H. Brown, the full-time Democratic national chairman, continues to share in the profits of his law firm, Patton, Boggs & Blow.

The campaign of Arkansas Gov. Bill Clinton, the presumed Democratic challenger to Bush, also includes among its top officials two lawyers, Mickey Kantor and Bruce Lindsey, who continue to work on behalf of private clients, spokesman Jeff Eller said.

Under campaign rules, Eller said neither official is permitted to represent clients in dealings with the state of Arkansas or its agencies. But he said the guidelines do not require the attorneys to recuse themselves from discussions of particular issues.

“Campaigns, I guess, are just different than actually being in government,” he said.

That notwithstanding, even Bush aides acknowledge that the danger of dual allegiance is far greater in a reelection campaign because its advisers--in theory, at least--can exert influence over federal government policy.

Gray said his efforts to limit outside activities had met with resistance from some campaign officials on grounds that their competitors were not bound by such strictures.

“I have to point out to them that Clinton’s only a governor,” he said.

And while Democratic candidates often bring untested advisers to their political campaigns, Republicans historically have turned again and again to the same team of skilled campaign hands. And during what amounts to nearly 12 years of incumbency, many of those aides have developed lucrative private businesses.

“In 1980, some of these guys might have been ordinary political operatives,” said one senior Administration official who asked not to be identified. “But now they’ve put together good businesses, and they don’t see why they should have to quit.”

John C. White, a former Democratic chairman and a prominent lobbyist himself, was far less temperate in his criticism. “I think it is a serious mistake to give people that kind of power unless they’re willing to sever their relationships with clients,” he said. “But I think it just goes with the arrogance of being in power for so long.”

In interviews, Gray and Burchfield acknowledged that the “funneling” of campaign officials’ contacts with government through senior White House officials sometimes has been ignored by those accustomed to dealing with longtime associates on a less formal basis. They said they are confident, however, that the other procedures have ensured that campaign officials do not advance their clients’ interests under the guise of working for the campaign.

But even if such rules are obeyed, the corporate links at minimum serve as a subtle but troubling source of bias among so influential a group of advisers, critics say.

And the fact that any of the campaign advisers remain free to put pressure on the Administration under a lobbyist’s hat is a source of unease to those who believe it gives them the power to exert undue influence.

“You don’t think that when Jim Lake calls over here that people are not more responsive?” an Administration political appointee asked. “Of course they are.”

Even those who insist that the arrangements do not affect the making of policy suggest that, at minimum, those permitted to work simultaneously for businesses and presidential campaigns may see their careers benefit as a result.

“I suppose their clients like to know (that) they have somebody advising them who’s also advising the President,” a senior White House official said. “I don’t think that’s wrong or evil or a conflict of interest. But maybe that’s a narrow line.”

Times staff writer Robert L. Jackson contributed to this story.