While Reed was being hailed in the mainstream press as a political wunderkind, the Coalition’s right-wing base was growing increasingly uneasy with Reed’s willingness to soften its positions on controversial social issues, especially abortion, in exchange for political power and a place at the Republican table. After Reed refused to criticize Colin Powell’s support for abortion rights, other right-wing leaders like James Dobson publicly lashed out at him, asking “is power the motivator of this great crusade?” and warning him not to give in to the “temptation … to bend to the pressures of pragmatism and personal ambition.” When he wrote a book in which he seemed to distance himself from calls for a “human life amendment,” he was likewise pilloried and told he “no longer represents those … who feel very strongly about family values and life.” Reed issued an “urgent statement” stating that the Coalition “opposed abortion in every case except when a mother’s life is in danger” and would “oppose with every fiber of our being any effort to include a rape and incest exception in the [Republican National Committee’s] platform.”  But the damage had been done. And when Bob Dole lost the election, much of the Coalition’s clout evaporated again.
But Reed soldiered on. In 1996, in an attempt to reach out to religious African American voters and bring them into the right wing movement, Reed announced that the Coalition was going to raise one million dollars to help rebuild black churches in the South that had been destroyed in a series of fire bombings. What had initially been planned as a one-day fundraising event ended up taking seven months. Similarly, Reed announced in 1997 the creation of the Samaritan Project, “A bold plan to break the color line and bridge the gap that separates white evangelicals and Roman Catholics from their Latino and African American brothers and sisters.” Reed pledged that the Coalition would raise $10 million for inner city churches, but less than a year later the project was abandoned after raising less than $50,000.
Around the same time, a scandal erupted within the organization over allegations by the Coalition’s chief financial officer that the organization’s direct-mail vendor, run by one of Reed’s close friends and business associates, had been routinely over-billing the organization to the tune of tens of thousands of dollars. She also alleged that Reed had turned over the Coalition’s mailing list, valued at nearly a million dollars, to the vendor free of charge. When the CFO took her concerns to the US Attorney’s office, she was suspended by the Coalition and eventually fired. Reed denied the allegations, but after his departure from the organization, the Coalition filed suit claiming that its mailing list had been fraudulently obtained and used by the vendor to solicit donations for other organizations.
After Reed’s 1997 exit, the Christian Coalition continued to deteriorate and, by 1999, found itself $2.5 million in debt, as well as facing the repayment of back taxes after having had its tax-exempt status revoked and fines for having improperly supported Newt Gingrich’s election and sharing its mailing list with right-wing Senate candidate Oliver North.
The Coalition moved its headquarters to Washington, DC in 2000 and just a few months later was sued by 10 black employees who alleged that they had been forced to eat in a segregated section and enter the office through the back door. The Coalition settled the suit for a reported $300,000 and its decline continued. Revenue shrank from a high of $26 million in 1996 to just $1.3 million in 2004 and the organization soon found itself facing lawsuits from landlords, lawyers, and clients for failure to pay its bills. In 2002, nearly broke and in shambles, the organization was forced to relocate to South Carolina, and was even sued by its moving company as it tried to collect $1,890 on an unpaid bill.
While the Christian Coalition crumbled, Reed was off raking in hefty consulting fees from some of the most successful and influential corporations in the nation.