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2006-01-04

The Biggest Congressional Scandal in Over a Century? GOP Lobbyist Jack Abramoff Pleads Guilty to Three Felony Counts

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Lobbyist Jack Abramoff admitted to defrauding at least four Native American tribes of tens of millions of dollars, bribing government officials and evading taxes. Abramoff has reportedly agreed to testify against several members of Congress who received favors or donations from him or his clients. Washington analysts say the corruption scandal could take down as many as twelve lawmakers. We speak with Peter Stone, a staff reporter for the National Journal, about the details of the case. [includes rush transcript]

Jack Abramoff became a Washington lobbyist after the Republicans won control of the House in 1994. He has ties that reach to all parts of Washington. He played a key role in what was called the K Street Project — a Republican attempt to essentially take control of the D.C. lobbying world. By 1995 he would befriend Tom Delay — who would later call Abramoff "one of his closest and dearest friends." He became a key fundraiser for President Bush and served on Bush’s transition team in 2000. His former assistant became Karl Rove’s personal assistant. He was accused of offering Congressional staffers lucrative jobs in exchange for legislative help. Abramoff ordered lobbying clients to give millions in political contributions to key lawmakers. The Wall Street Journal reports Abramoff could implicate as many as 60 lawmakers in the corrupion inquiry.

On Tuesday, Alice Fisher, the assistant attorney general of the criminal division of the Justice Department, announced Abramoff had pleaded guilty.

Alice Fisher: "Government officials and government action are not for sale. The Justice Department will aggressively investigate and prosecute these types of cases which have a devastating impact on the public’s trust of government. We will not shy away from that responsibility no matter where the trail leads. I will note that, while Abramoff engaged in the business of lobbying, his activities went far beyond lawful lobbying to the illegal practice of paying for official acts. Lawful lobbying does not include paying a public official a personal benefit with the understanding — explicit or implicit — that a certain official act will occur. That’s not lobbying; that’s a crime."

Today we will spend the hour examining the rise and fall of Jack Abramoff and examine the state of lobbying in Washington.

Later in the show we will speak with a Native American tribal leader bilked of millions of dollars from Abramoff and his business partner Michael Scanlon — the former Tom DeLay aide. We will also speak with former Colorado Senator Ben Nighthorse Campbell who chaired the Senate Committee on Indian Affairs when the Abramoff scandal first broke.

But we begin with Peter Stone a staff reporter for the National Journal. He has written extensively on Jack Abramoff over the years.

  • Peter Stone, a staff reporter for the National Journal. He has written extensively on Jack Abramoff over the years.

Transcript

This is a rush transcript. Copy may not be in its final form.

AMY GOODMAN: On Tuesday, Alice Fisher, the assistant attorney general of the criminal division of the Justice Department, announced Abramoff had pleaded guilty.

ALICE FISHER: Government officials and government action are not for sale. The Justice Department will aggressively investigate and prosecute these types of cases, which have a devastating impact on the public’s trust of government. We will not shy away from that responsibility no matter where the trail leads. I will note that, while Abramoff engaged in the business of lobbying, his activities went far beyond lawful lobbying to the illegal practice of paying for official acts. Lawful lobbying does not include paying a public official a personal benefit with the understanding — explicit or implicit — that a certain official act will occur. That’s not lobbying; that’s a crime.

AMY GOODMAN: Assistant attorney general Alice Fisher. Today we spend the hour examining the rise and fall of Jack Abramoff and examining the state of lobbying in Washington. Later in the show we’ll speak with a Native American tribal leader bilked of millions of dollars from Abramoff and his business partner Michael Scanlon, the former Tom DeLay press aide. We’ll also speak with former Colorado senator, Ben Nighthorse Campbell, who chaired the Senate Committee on Indian Affairs when the Abramoff scandal first broke. But we begin with Peter Stone, staff reporter for the National Journal. He has been writing about Jack Abramoff extensively for years. Welcome to Democracy Now!, Peter.

PETER STONE: Nice to be with you. Thanks.

AMY GOODMAN: Why don’t you start off by just laying out the scope of what Jack Abramoff, Michael Scanlon were involved with?

PETER STONE: Well, based on what we’ve learned over the last year in Senate hearings that Ben Nighthorse Campbell and Senator McCain were instrumental in starting that looked into the allegations that they bilked tribes of tens of millions of dollars, and now what’s come out in not only Abramoff’s plea bargain yesterday, but Scanlon’s plea bargain, and what are expected to be more in the near future, the scope of the fraud appears to be enormous. One of Abramoff’s former partners apparently referred to it at one point when the scandal was about to break or had just broken as potentially the Enron of lobbying, which is not a bad analogy in some ways.

The scandal has now really shaken up both the lobbying community in Washington and members and congressional staffers who were close to Jack Abramoff or even who knew him very slightly and worked with him. What we’ve seen really is a pattern of favor giving, a pattern of influence pedaling that, as Alice Fisher said, appears to go well beyond the lawful bounds of lobbying.

And Abramoff delighted in being extravagant. He delighted in excess. And the kind of influence machine that he built in Washington involved not only lawful campaign contributions, but in conjunction with lawful campaign contributions from members and staffers who he was trying to win help from, he would do just about everything imaginable in the way of currying favor, from taking good friends like Tom DeLay and Bob Ney on golfing junkets to Scotland to trips to the Marianas, another major client of Abramoff’s that goes back to the mid-1990s, when he first broke into lobbying.

These are the island territories that depend heavily on sweatshop labor, cheap immigrant labor, and Abramoff’s role was to ensure that these islands were not subject to minimum wage laws, U.S. minimum wage laws that the territory did not have to impose. And he was successful in that. And he was successful with help of key G.O.P. allies in congress, notably Mr. DeLay was the major champion of the effort to stave off minimum wage laws.

But beyond trips like these for members and staffers and, I should note, influential conservatives who he took on junkets, too, some of the junkets which, again, began in the 1990s when he was focusing on the Marianas and his first Indian client, the Choctaws, included conservatives who worked with major think tanks in Washington — the Heritage Foundation, Americans for Tax Reform, which was led by Jack’s old dear friend Grover Norquist, who he had once run College Republicans with in the early ’80s.

And there were other gifts, too. Jack went on to set up two big restaurants in Washington, one of which in 2002 became a hot spot for dining for folks from Capitol Hill. Lobbyists, lawmakers came to his restaurant Signatures, where he was well known for offering some of his best friends free food and meals. There were fundraisers there, many, many fundraisers, mostly Republican fundraisers. But Jack — the scope of what he built as an influence machine has been really unrivaled in Washington. And it now appears, based on the allegations that we’re seeing and Abramoff’s plea agreement which promises his cooperation against a wide variety of folks who he acknowledges he conspired to bribe, promises to produce a scandal that will be the biggest at least in a generation and could be bigger than that.

AMY GOODMAN: We’re talking to Peter Stone, the correspondent for National Journal. How did Jack Abramoff get his start? And what about his relationship with Tom DeLay?

PETER STONE: Well, Jack broke into lobbying in 1995, right at the point when the Republicans captured Congress for the first time in 40 years, and unlike many lobbyists who start, he did not have government background, he did not have the kind of Hill experience, either as a member or former aid, or administration experience. But he had been a key Republican activist going back to the early 1980s, when he ran College Republicans right after he got out of Brandeis. The man who helped him — ran his campaign when he went on to become chairman in the early 1980s was Grover Norquist, who he had known from the Reagan campaign in 1980, when they worked together to help Reagan capture the state of Massachusetts.

And Jack also built a close relationship with another key conservative in those years who went on to fame, and that’s Ralph Reed, who was the third of a group of conservatives, sort of a troika at College Republicans, who by 1995 had emerged as powerful allies of both Speaker Gingrich and Tom DeLay, when the Republicans captured Congress. And I think it was Norquist and Reed who in part gave him a jump-start as a lobbyist in Washington, access to members on the Hill that made his rise rather quick.

And he also had contacts through fundraising very early on with DeLay. He became a principle fundraiser. He did other things with DeLay. He started cultivating his staff who went on later to become allies of Jack. Scanlon was a press aide to DeLay in the late 1990s. And when he left Congress in 2000, he joined Jack at one firm and then a second firm, and then in a separate venture as his public relations specialist, his grassroots specialist. Jack also forged ties with two of DeLay’s top aides, Ed Buckham, who was DeLay’s chief of staff, and Tony Rudy, his deputy chief of staff, both of whom went on to be allies, as well.

So there were multiple links to DeLay that became important in Jack’s career. And, obviously, DeLay is one of the members on the Hill who was nervous about where this investigation may lead, although his press spokesman and lawyer has said he has nothing to fear and is urging people to cooperate with the investigation.

AMY GOODMAN: Peter Stone, The Wall Street Journal is reporting up to 60 lawmakers could be implicated by Jack Abramoff.

PETER STONE: I don’t think we know for sure. I think the more conservative estimates, what I’ve written and what other papers have written in the last few weeks, is maybe six or so lawmakers under close scrutiny. I think there’s a wider number that are probably being looked at. But I think the justice probe and the multi-agency task force who’s looking at this are not looking for individual cases of a campaign contribution or one gift, per se, that might link up closely with a legislative favor or some kind of action.

I think they’re focusing on people such as Bob Ney, who is referred to in the plea bargain yesterday as representative number one. He’s not named, per se, but is clearly the member who is first and foremost under scrutiny by the Justice Department now. He was referred to in Scanlon’s plea bargain, as well. And what you have here with Ney is a pattern of gifts and favors from Abramoff and Scanlon, including campaign contributions, including a golf trip, including meals, including other things, as well, that were followed by or preceded by various kinds of favors.

Ney entered two very unusual statements in the congressional record in 2000 at a time when Abramoff was seeking to buy a casino law down in Florida called SunCruz. And Ney, who’s, of course, a representative from Ohio, put statements in the record early in 2000 that sharply criticized the man who was then running the casino for some reason, didn’t seem to be totally relevant or relevant at all to his district. But he did make a statement then criticizing this fellow who Abramoff and his partners at the time were trying to buy the casino from.

And then shortly after the purchase went through, Ney went back and put another statement in the congressional record, praising one of Abramoff’s partners who had just bought the casino. And despite his rather checkered past, which included being disbarred from the practice of law in New York and a bankrupt business that he had in Washington, credited him with tremendous skills and said he would try to probably be able to turn the enterprise around.

AMY GOODMAN: Didn’t ultimately one of these men die in a gangland-style murder?

PETER STONE: The man they bought the casino from, Gus Boulis, they quickly fell into disagreement with him as when the purchase was being negotiated and consummated. Boulis was gunned down in a gangland-style slaying in Florida in February of 2001. And three men were finally arrested in that case and charged with murder several months ago. Two of these men had been hired by Abramoff’s partner, Adam Kidan, to serve as caterers and provide security to the SunCruz after the purchase went through.

Abramoff is, I believe, due in court today in Florida to enter a plea there, because he’s also faced charges there over fraudulent purchase. He and Kidan put up, reportedly, a phony $23 million note as an initial payment on SunCruz, and he was charged in August with wire fraud and mail fraud in that case, as well.

So he has got a rather long list of fraud that he’s been accused of. There were three counts in Washington yesterday, including tax evasion, fraud and conspiracy to bribe public officials, that carry a maximum penalty of 30 years. It’s been reported that he’s likely to face something on the order of ten years after sentencing guidelines are worked out. And he’s been asked to cooperate fully and provide evidence against public officials who he’s been talking to justice about now for months.

And while the only public member of Congress named in the plea bargain yesterday was Ney, it’s thought that he has talked about a number of other members who he worked with closely, probably more than half a dozen, but, once again, I suspect that they’re really focusing in on half a dozen now. It could broaden, certainly. It could include a dozen or more.

There are Hill staffers who were being looked at very, very closely. Two were identified yesterday, who later became lobbying partners of Abramoff’s. One was Ney’s chief of staff, Neil Volz, who helped as a point of access for Abramoff when he was trying to get Ney’s support ad then who turned around and went to work for Abramoff in 2002 and helped again as a lobbyist and lobbying partner for Abramoff. The other one mentioned yesterday, again not by name, these are not — Volz was not named, but only referred to as "Staffer B." Staffer A in the plea agreement was Tony Rudy, who was former deputy chief of staff to Tom DeLay. So they’re clearly looking at former aides who helped Jack when they were on the Hill, several of whom went on to become his lobbying partners, which is a fascinating and key part of the influence pedaling machine that he set up in Washington.

AMY GOODMAN: Well, Peter Stone, we have to leave it there, staff correspondent for the National Journal, has covered Abramoff’s lobbying scandal for the past years. Thanks so much for joining us.

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