• Originally published in the Los Angeles Times April 16, 2005 Copyright 2005 Los Angeles Times

By Tom Hamburger and Peter Wallsten, Times Staff Writers

A White House aide was told about potential problems with the Education Department paying a conservative commentator to promote an administration policy but did not prevent the contract from being renewed, according to a new government report.

The White House involvement, noted briefly in a report Friday by the Education Department's inspector general, appears to contradict statements by President Bush in January that the White House had no knowledge of the $240,000 contract with Armstrong Williams. The contract's existence was disclosed publicly at that time by USA Today.

After it was revealed that Williams was being paid by the administration to promote its No Child Left Behind initiative, the White House moved swiftly to condemn using government funds to pay journalists to advance its policies.

The 20-page report by the inspector general provided no indication that Bush or his senior staff knew about the contract when it was issued in late 2003 and renewed in mid-2004.

But the report said that shortly before the renewal, a midlevel White House aide received calls from Education officials concerned about the contract's cost, its effectiveness and Williams' dual role as journalist and government public relations man.

Despite those discussions, the Education Department renewed the contract.

The report did not identify the aide, but Education officials later said it was David Dunn, a former special assistant for domestic policy. An administration official said it was unrealistic to expect someone with Dunn's broad responsibilities to act on a relatively small contract.

When Bush was asked about the Williams contract in January, he criticized it and said, "We didn't know about this in the White House, and there needs to be a nice, independent relationship between the White House and the press."

The revelation that a White House official was aware of the contract received only glancing attention in the inspector general's report. The inquiry concentrated on problems in the Education Department's handling and review of the contract.

It found no violations of law, but did not examine the legal question raised most often by congressional Democrats: Whether the contract breached federal rules prohibiting the use of taxpayer funds to "covertly distribute propaganda."

The question is the subject of a separate investigation.

Education Secretary Margaret Spellings said she planned to immediately adopt the report's recommendations for improvements in contract oversight.

"It is clear from this report that there were serious lapses in judgment by senior department officials in regard to this contract that reverberated down the chain of command," she said.

Spellings, who formerly served as Bush's chief White House domestic policy advisor, became head of the Education Department in January.

The report revealed that Spellings' predecessor, Rod Paige, had been approached by Williams about providing public relations services. Paige turned over Williams' proposal to his chief of staff, the report said, which led eventually to the contract with the commentator.

Paige supported the contract's renewal, according to the report. But Paige told investigators that had he known department officials had reservations about the contract, he would have responded differently.

The contract with Williams, who is African American, was issued to fund production of advertisements promoting the No Child Left Behind Act. The contract specified that Williams would also help get Education Department personnel on television and encourage other black journalists to talk about the law.

Dunn, who now serves as Spellings' chief of staff at the Education Department, was not available for comment Friday. In his job at the White House, he also worked for Spellings.

Spellings told reporters Friday that she had not known about the contract before it was renewed last year. She also said she could not recall when she did learn about it.

She declined to be interviewed by the inspector general, citing a White House tradition of not responding to questions from inspectors general.

The unwillingness to cooperate drew complaints from congressional Democrats. They also said the report raised questions about the Bush administration.

"Every American should be outraged that concerns were raised at the highest levels of the [Education] Department and to the White House about the highly irregular nature of this contract," said Rep. George Miller (D-Martinez), who was among those who had requested the investigation. "Although White House officials had professed ignorance of the Armstrong Williams contract, this report makes it clear they were aware but failed to intervene."

White House spokeswoman Dana Perino, responding to the report, said, "The president did not know about this contract and, to the best of my knowledge, other senior-level people at the White House didn't know either."

The report details a series of bureaucratic miscues inside the Education Department and suggests Williams did not deliver all that he was paid for in his contracts for minority outreach.

"The department paid for work that most likely did not reach its intended audience and paid for deliverables that were never received," the report said. "The advertisements that were produced under the work requests appear to be of poor quality and the Department has no assurance that the ads received the airtime for which it paid."

Williams could not be reached for comment after the report was released late Friday afternoon.

In her comments Friday, Spellings said she thought the signing of the contract "was wrong, it was stupid, and it showed a lack of judgment."

Asked whether she blamed Paige, she said, "I don't think Secretary Paige was well-served by people around him.... I understand now that I am responsible [for the Education Department's activities]. Whether he felt that way or not, I do not know."

Paige declined to respond directly to the report. Instead, he referred questions to a Washington-based public relations consultant, who distributed a written statement on Paige's behalf.

"I am pleased that the report has been expedited and released quickly," Paige said in the statement. "I am disappointed that this episode occurred. The communications effort was meant to inform citizens of the merits of the No Child Left Behind Act, not deceive."

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