Pitchman of the Power House

By Evan Thomas

How top Lobbyist Bob Gray makes friends and sells influence

There was a time when lobbyists were discreet, working their deals behind closed doors. But Robert Keith Gray is a new breed of lobbyist, preferring to enter by the front door and stay in the limelight.

The dapper, polished Gray, 62, is the founder and president of Gray & Co., an 86-member lobbying and public relations firm located in a lavishly decorated former generating plant in Georgetown immodestly named the Power House. His office is decorated with photographs of him shaking hands with every President since Dwight Eisenhower. "With appreciation and warmest friendship," says a photo inscription from Ronald Reagan, whose Inauguration ceremonies Gray helped arrange. By day he likes to be seen with his pals in high places, including CIA Director William Casey, Senator Paul Laxalt and most of the Cabinet. By night, if his friends have to work, Bachelor Gray squires their wives to so many Washington parties that he claims he wears out two tuxedos a year.

Gray cultivates his connections by hiring people on the basis of whom they know. "I only want the stars," he says. It is a policy that gets him publicity, not always welcome. Four months ago, Gray hired Alejandro Orfila, the Secretary-General of the Organization of American States and former Argentine Ambassador to the U.S., at $25,000 a month. At the time Orfila, who is an accomplished Washington socializer, was still working for the O.A.S. and collecting his $88,000-a-year salary. He continued working as both a diplomat and a member of Gray & Co. until his resignation from the O.A.S. on March 31. Last winter, a black limousine with diplomatic plates that read "OAS 8" was often seen idling outside the Power House, while Orfila worked within. Although Orfila insists that he did no lobbying while he was on both payrolls and that he was moonlighting from the O.A.S. on accumulated leave time, the O.A.S. this month rebuked him and began an investigation of his nine years in office. A few days later, Gray was back in the news for getting Ursula Meese a job running a small foundation. The wife of embattled Presidential Counsellor Edwin Meese, she has maintained that she took the $40,000-a-year job as executive director of the foundation at American University in early 1982 because her family needed the money. She still has the post.

For all his intimate connections, however, Gray is not just a political fixer. The rules of lobbying have changed since the days when the legendary Thomas ("Tommy the Cork") Corcoran could pick up the phone and deliver the goods for a client. As federal regulations have grown ever stricter in the past 15 years, the number of registered lobbyists has quadrupled. There are now about 6,500, or just over twelve for every member of Congress. But while this growing cacophony of special-interest groups is fighting to be heard, lobbying has become more open, thanks to the full-disclosure demands of the post-Watergate era.

What Gray offers is a prized Washington commodity called access. His specialty is the returned phone call. "A Bob Gray can get your case heard," says Jack Albertine, president of the American Business Conference. Declares the New Republic columnist TRB: "Gray's firm has broken new ground in the brazenness with which it presents itself as selling not legal services or even public relations, but connections pure and simple."

Gray maintains these connections by performing small favors, like getting the job for Ursula Meese or helping Nancy Thurmond, the wife of Senator Strom Thurmond, Republican of South Carolina, organize charity balls. (He once put Mrs. Thurmond on his payroll, but criticism of the potential conflict of interest caused her to resign.) Gray says he never asks for favors in return. "There was a time when booze, blonds and bribes were the persuaders," he explains. "But today's lobbyist has to be a straight shooter." Contends Staffer Frank Mankiewicz, who until last year ran National Public Radio: "He's a small-town boy, like Ronald Reagan. In a small town, you help your friends."

Gray, who was born in Hastings, Neb., is a good deal more than just a small-town boy grown big. He is a Harvard Business School graduate who since going to Washington as a low-level official in the Eisenhower Administration has had the knack for cultivating the powerful of both parties. He left the public relations firm of Hill & Knowlton Inc. in 1981 to build a company that by 1983 was earning $11 million a year. He owns 75% of Gray & Co.'s stock, and enjoyed a salary last year of $401,500.

Gray has produced results for many clients, including the government of Turkey, which has little support in Congress. The powerful Greek lobby was determined to trim back Turkey's military aid last year, but Gray sent Lobbyist Gary Hymel, a former top aide to House Speaker Tip O'Neill, to work on House leaders. Martin Gold, former counsel to Senate Majority Leader Howard Baker, was sent by Gray to deal with Republican leaders in the Senate. Turkey ended up getting more military aid out of Congress than the year before.

Such services do not come cheap. The firm often charges clients both a monthly retainer and high hourly fees. An hour of Gray's time costs $350. Says a former employee: "Suddenly, at the end of the month, the client is hit with a $40,000 or $50,000 bill. He says, 'My God, what have I gotten for this?' " Sometimes little more than a handshake. One arms dealer paid Gray $65,000 to help him make his case to the Pentagon on a foreign spare-parts deal. Gray set up a meeting for the client with Defense Secretary Caspar Weinberger, but the arms dealer did not get the contract. Nor can Gray always deliver the handshake. The National Food Processors paid him a major fee largely in the hope that he could persuade President Reagan to speak at their annual convention in early February. The President declined.

Gray insists that he will not take on just any client, and hints that he has turned away the government of Libya and the Rev. Sun Myung Moon. But how did he know, for instance, that more military aid for Turkey was in the national interest? "I always check these situations out with Bill Casey," says Gray, dropping like a brick the name of his friend the CIA director. For Bob Gray, friendships like that are not just to be made; they can be marketed.

--By Evan Thomas.

Reported by David Beckwith and Jay Branegan/Washington

With reporting by David Beckwith, Jay Branegan