Corporate Gala to Honor Cabinet-Designee Brown

Next Sunday, three days before the Clinton Administration takes office, Commerce Secretary-designate Ronald H. Brown will be honored at a Kennedy Center gala financed by several corporate giants that could be affected by his actions as a Cabinet member.

J. C. Penney, Anheuser Busch, Pepsico, Textron and Sony Music Entertainment have been identified by inaugural officials as comprising a group known as “Friends of Ron Brown,” which is footing the bill for the event.

Planners of the gala have refused to say how much money each sponsor has contributed or to discuss the program but one source said that companies were asked to contribute at least $10,000 each.

While no laws prohibit the expenditure of corporate funds to honor a Cabinet nominee, Democrats have been critical of past Republican commerce secretaries who took advantage of business generosity. Robert A. Mosbacher, former Bush Administration commerce secretary, for example, was widely criticized by Democrats for traveling around the country on corporate jets.

And President-elect Bill Clinton, who made denunciations of the close relationship that has often existed between special interests and Washington leaders a central theme of his campaign, has pledged the most stringent ethical standards ever for his Administration.

Ellen Miller, executive director of the Center for Responsive Politics, a bipartisan group that advocates strict ethics for government officials, said that corporate sponsorship of the Brown event creates an apparent conflict of interest because as commerce secretary, he will make decisions that could affect these companies.

“It creates the appearance of a close personal connection between business and the Democrats,” said Miller. “It has the appearance of business saying: ‘Thank you for all you’ve done for us and don’t forget us when you move up the next rung of the ladder.’ ”

A spokesman for the Clinton inaugural committee said that solicitation of corporate sponsors for the event has not created a conflict of interest because the gala was arranged before Brown was nominated to be commerce secretary.

Brown sees no conflict of interest in the sponsorship, according to Ginny Terzano of the Democratic National Committee. “I don’t see anything unusual about it.”

Terzano said that Brown, chairman of the national committee, is sensitive to possible conflict of interest issues and he has halted his fund-raising activities on behalf of the committee in an effort to avoid any conflict between his political position and his job as a member of the Clinton Cabinet.

Unlike many other appointees to government jobs, the Commerce secretary has virtually no role in regulating business enterprises. As Commerce secretary, however, Brown would be involved in many decisions that have an impact on major corporations. He would play a leading role in deciding when and how the government takes action to help American companies compete with overseas rivals. He also would advise the President on a range of policy issues relating to U.S. firms.

According to knowledgeable sources, Brown asked the President-elect’s advisers whether he should cancel the gala to eliminate any appearance of impropriety. The sources said that he was advised by transition lawyers that corporate funding of the event was consistent with the law and the President-elect’s ethical standards.

While it is not an official inaugural event, the “Friends of Ron Brown” gala has been scheduled at the same time as other inaugural activities. A spokesman for the inaugural committee said that the Kennedy Center tribute was arranged by Yolanda Carraway, a friend of Brown and a former DNC employee.

When contacted by The Times, most corporations identified as sponsors declined to discuss their roles in detail.

Richard Detwiler, director of public relations for Pepsico, acknowledged that his company was helping to sponsor the event but indicated that he did not know how much the firm had contributed. He said the company chose to sponsor it “as a way of wishing him well,” not as an effort to gain influence with the incoming commerce secretary.

J. C. Penney officials refused to discuss the matter, except to acknowledge that the company’s government relations department had purchased what one company employee described as “a little bloc of tickets.”

Richard F. Keating, vice president for national affairs at Anheuser Busch, said that his company was a sponsor and had contributed $10,000.

Martin D. Payson, who resigned last month as Time-Warner’s vice chairman, acknowledged through a spokeswoman that he also was supporting the event. He said that he agreed to contribute at the request of Clarance Avant, owner of Tabu Productions, a record company in Los Angeles. Like most other sponsors, Payson declined to say how much money he had contributed.

One company identified by the inaugural committee as a sponsor, NYNEX, the New York telephone company, said that it had no role in hosting the event.

The Kennedy Center gala is one of three tributes to Brown during inaugural festivities. Of the others, one will be hosted by Democratic Party leaders and the other by two teachers’ unions, the American Federation of Teachers and the National Education Assn.

Such events are not considered common for Cabinet members.

Invitations to the Kennedy Center event were being sent to Democratic Party luminaries, according to Democratic sources. Since the cost of the event is being shouldered by corporations, guests will not be asked to pay.

Brown’s background as a lobbyist for a wide range of businesses, including many foreign clients, has made his nomination one of Clinton’s most controversial. At his confirmation hearings last week, Brown pledged to act fairly in the interests of American business without regard to his client list.

To assure his independence, Brown said that he would terminate his business relationship with the Washington firm of Patton, Boggs & Blow. He also promised to disqualify himself for one year from participating in any matter relating to his current lobbying clients. He identified his current clients as PEBSCO Municipal Employee Security Corp., VCR Companies Coalition and Sedwick James Inc.

Members of the Senate Commerce Committee, which has been reviewing Brown’s nomination, seem satisfied by his pledge to avoid conflict of interest.

In a letter to Brown made public on Monday, however, Sen. Trent Lott (R-Miss.), a member of the Commerce Committee, asked for a copy of his severance agreement with Patton, Boggs & Blow, which will pay him $1 million.

Privately, Republicans on the Commerce Committee criticized Senate Democrats for failing to hold Brown to the same standard that they frequently demanded of his Republican predecessors. Referring to corporate sponsorship of the Kennedy Center gala, one GOP committee source observed: “It’s more a matter of hypocrisy than anything else. Democrats were critical of the Republicans when they did this sort of thing.”