Energy Secretary Keeps Job, Draws Rebuke for Press Flap

The Clinton Administration said Friday that Energy Secretary Hazel O’Leary will keep her job, although she drew a sharp rebuke for allowing her department to spend $46,500 of taxpayer money for a consulting firm to evaluate news coverage of her agency and to rank reporters.

White House Chief of Staff Leon E. Panetta issued a two-page finding that the Energy Department contract violated no laws or federal regulations and that the media evaluations did not involve investigating or spying on reporters.

“Secretary O’Leary has been an effective member of the Cabinet, and this matter should not detract from that record,” White House Press Secretary Mike McCurry said.

O’Leary, speaking at a press conference Friday in New Orleans, said she accepted full responsibility for the mistake, but said she learned about it only after the contract was issued and was never informed that the consultant was also ranking reporters. She said she now believes that the contract with the consulting firm, Carma International, was “reprehensible.”

Although O’Leary said she considers the matter closed, Republican lawmakers said the issue is far from dead and sent the White House a letter, signed by 78 House members, demanding her ouster.

Rep. Thomas J. Bliley Jr. (R-Va.), chairman of the House Commerce Committee, said he would hold hearings on the matter. The committee, which has oversight responsibility on energy matters, is expected to call O’Leary.

Attempting to head off a larger controversy, McCurry said the Administration is notifying other Cabinet officials that such media evaluations “will not be tolerated by the White House.”

The flap came at a bad time for O’Leary--on two fronts. She is trying to stave off attempts by congressional Republicans to eliminate her agency, and only a month ago, she drew congressional criticism for extravagant spending on hotels and airline trips.

It is “just another reason to turn out the lights at the Energy Department,” said Senate Majority Leader Bob Dole (R-Kan.), who showed up in the Carma International reports as an “unfavorable” source quoted by reporters.

O’Leary rejected congressional demands that she make personal restitution for the $46,500 spent on the consulting reports. The cost will be paid from Energy Department funds allocated to her headquarters, she said.

O’Leary, who returned to Washington from New Orleans late Friday, said she talked with Vice President Al Gore about the evaluations, but declined to reveal the details of the conversation.

The contract was a good-faith effort to determine whether the agency’s message was getting out, O’Leary said, and the decision to hire Carma International was made by former Energy Department Communications Director Michael Gauldin.

Gauldin, who is now press secretary for the Interior Department, could not be reached at his office Friday, which was a federal holiday. Gauldin did not return calls left at his home.

Carma International, a Washington-based firm with $4.5 million in annual revenues, has produced monthly reports for the Energy Department since last December.

The somewhat disorganized reports detailed how many stories reporters at various publications were writing and ranked the reporters on a scale of 1 to 100. Those with higher scores were thought to provide favorable coverage and vice versa. The reports also classified sources as either unfavorable or favorable to the Energy Department.

Repercussions continued to echo throughout the Washington Establishment on Friday as officials tried to comprehend the rationale behind the judgments.

The Carma International reports, for example, ranked not only Dole but President Clinton as unfavorable sources on Energy Department stories. It also included in the “unfavorable” category such environmental groups as Physicians for Social Responsibility.

Daryl Kimball of the physicians organization, a group active in nuclear waste issues, said it was “very peculiar” for his group to be ideologically lumped in with Dole. But Kimball defended O’Leary and said Republicans calling for her dismissal have an ulterior motive.

“They are taking advantage of an obvious gaffe by a Cabinet secretary and using it to advance their agenda, which is to eliminate this department,” Kimball said. “They want to cut spending on the environment and use it to finance a tax cut for the rich and increase defense spending. That explains their motives more than a principled defense of the free press.”

Indeed, O’Leary has angered not only Republicans but also many Defense Department officials by advocating big reductions in spending for nuclear weapons and increases for environmental cleanup.

Perhaps more than any other Clinton Cabinet secretary, she has been the subject of pointed personal attacks from the floors of the House and Senate, including criticism from such defense stalwarts as Sen. Strom Thurman (R-S.C.). The former public relations executive for Northern States Power Co. in Minneapolis has also angered conservatives by appointing former environmental advocates to important positions in her department.

O’Leary’s travel habits also have raised congressional ire. An investigation by The Times earlier this year disclosed that she had the richest tastes of any Cabinet secretary in her 61 domestic trips since taking office.

The trips included stays at four-star hotels and extensive use of first-class tickets on airlines. The disclosures have led to suggestions by congressional critics that she be banned from making such trips.

But O’Leary also has won support for her efforts to reveal past secrets involving human radiation experiments and in her work to improve relations with communities near nuclear weapons plants.