Investigators Focus on Ex-Gore Aide, Donor Company

In the spring of 1995, a low point in the political fortunes of President Clinton and Vice President Al Gore, longtime Gore aide and chief fund-raiser Peter S. Knight began looking for the money that was critically needed to launch the Clinton-Gore reelection campaign. Among the first he secured was a pledge from executives of a small Massachusetts hazardous-waste disposal company to raise $50,000.

“Your participation in this program will give you a special place of significance with the vice president and put you first in line,” Knight wrote Molten Metal Technology Inc. in a May 1 thank-you letter.

In fact, Molten--which at the time was paying Knight $7,000 a month plus lucrative stock options as the company’s Washington lobbyist--already had a prominent place in line with the vice president. Less than three weeks before Knight’s letter, Gore had visited Molten’s Fall River, Mass., plant to mark Earth Day 1995. Molten’s hazardous-waste cleanup technology, developed with the help of a multimillion-dollar federal contract, was “a shining example of American ingenuity, hard work and business know-how,” Gore said during the April 18 visit.

On April 25, Molten head William M. Haney III wrote to Knight, thanking him for “orchestrating” Gore’s trip. On June 6, Haney and his wife were among about 50 couples, each of whom had agreed to help raise $50,000 for Clinton-Gore, attending a dinner with Gore at the vice president’s official residence. “This effort,” according to briefing papers prepared for Gore, “was conceived by and is chaired by Peter Knight.”

This juxtaposition of events, and others since Gore first became vice president, have put Knight--and Molten--under the scrutiny of the Justice Department and at least three congressional committees investigating allegations of campaign finance abuses. Several of the principals, including Knight, Haney and former Assistant Energy Secretary Thomas P. Grumbly, a onetime Gore staff member who oversaw the granting of the government contract to Molten, have testified voluntarily under oath before investigators from the Senate Governmental Affairs Committee. The investigators are looking into Molten’s government contract, its contributions to the Democratic National Committee and the Clinton-Gore campaign, and the role Knight played in them.

All have said they did nothing wrong.

The case of Molten Metal has provided a stark picture of how business and politics often overlap, demonstrating the advantage of having friends in high places and the ways in which Washington relationships can span both years and jobs, to the benefit of all concerned.

Gore’s chief of staff through 13 years in the House and Senate, Knight ran both Gore’s failed 1988 presidential effort and his 1992 vice presidential campaign. He worked in the Clinton-Gore 1992-93 transition team, overseeing sub-Cabinet appointments, including Grumbly’s. In 1996, he headed the Clinton-Gore reelection campaign.

When he hasn’t been directly employed by the campaigns, Knight since 1991 has been a partner at the Washington law firm now called Wunder, Knight, Levine, Thelen & Forscey, where he specializes in communications, environmental and pharmaceutical matters. In addition to Molten Metal, his client list includes other companies with regulatory or contract business with the government.

Records show that Knight’s involvement with the network of Gore supporters and friends, his political connections and his own business pursuits allowed him simultaneously to make money for himself, assist his clients as they sought and won federal business, and raise funds for the Democratic National Committee, the Clinton-Gore campaign and other Gore causes.

Molten’s stock, for example, more than doubled in the months after Gore’s visit, a fact that press accounts at the time attributed to the vice president’s enthusiastic and explicit endorsement. In November 1995, Knight exercised a portion of the options he had received from the company, making more than $90,000 before taxes.

Knight declined to speak to a reporter for this article, but in a statement released by his attorneys he said: “Throughout my career, I have always acted in accordance with the highest ethical standards. No amount of baseless innuendo directed at me in this intensely partisan environment will ever diminish my pride in the work I have done for the vice president, the Democratic Party and my clients.

“First, I have never talked to the vice president about any federal contract or grant on behalf of any client. Second, any suggestion that I helped arrange a government contract or grant in exchange for any type of contribution is patently false. Third, I have asked an extremely wide range of people to support the efforts of the Democratic Party and several worthwhile charitable causes, including some past and present clients. I am proud of what I have done to help support these efforts.”

Molten had cemented its relationship to the vice president long before Knight came looking for campaign contributions. In the spring of 1994, Gore wrote to Molten president Haney to thank him for a $50,000 donation to help endow a chair in environmental studies at the University of Tennessee to be named after Gore’s sister, Nancy Gore Hunger, who died of lung cancer in 1984.

Two days after the March 22 donation, the Department of Energy announced it would expand an existing $1.2-million research contract with Molten to develop technology for hazardous-waste disposal by $9 million. As assistant secretary for environmental management, Grumbly was the senior official involved in the decision on Molten’s contract. One internal Energy memo, dated Nov. 23, 1993, noted that “this is the contract T. Grumbly wants to add $9 million to.”

Grumbly, who left the government early this year, said through his attorney Thursday that he had no knowledge of any campaign or charitable contributions involving Molten.

In February, the month before the contract expansion was announced, a written DOE “progress review” of the Molten contract noted that “no analytical data/conclusions were available to document [the project’s] results” during a late January DOE visit to the Fall River plant. The report noted that in the absence of such information, “it is difficult to reconcile and determine the appropriateness of the invoiced costs, as relates to this contract activity.”

The ties among Knight, Grumbly and Gore go back at least to 1980. Knight was then-Rep. Gore’s chief of staff when Gore hired Grumbly as staff director of the Science and Technology Committee’s investigations and oversight subcommittee, which he chaired. The relationship continued into the 1990s, after Gore published his best-selling book “Earth in the Balance.” Knight was chairman of the nonprofit Environmental Education Foundation Gore set up with some of the book royalties, and Grumbly was its secretary-treasurer.

In a statement Thursday, Gore spokeswoman Ginny Terzano said any connection drawn between Gore’s involvement in the university chair named after his sister and companies receiving government contracts “is absolutely baseless and untrue.”

Terzano described as “offensive that the Gore family memorial to the vice president’s deceased sister could be so abused through innuendo and speculation.”