The nation's political scandal du jour is a strange Republican brew with a strong Washington state flavor. Its leading characters include Rep. Tom DeLay, R-Texas, and Jack Abramoff, a former lobbyist for one of Seattle's most prestigious law firms, Preston Gates & Ellis. DeLay and Abramoff deny wrongdoing, and Abramoff has pleaded the Fifth. A third figure, Mike Scanlon, another ex-employee of Preston Gates, is ducking subpoenas (and is not to be confused with Michael F. Scanlon, no relation, who coincidentally works in the firm's D.C. office). The scandal has at least two fronts—D.C. and Texas, deep in George Bush territory— and revolves around more than $60 million in political giving and taking, mostly corporate and Indian casino money. Another front might open in the House Ethics Committee, where possible charges could be presided over by a Washingtonian— Rep. Doc Hastings, R-Pasco, the incoming chair who has received campaign money from a DeLay political action committee.
In another Evergreen State twist, it turns out that DeLay and Abramoff were introduced to each other more than a decade earlier by Seattle radio host Rabbi Daniel Lapin, a friend of both men. He hoped it would be the beginning of a long friendship. But today, DeLay, the House majority whip known as "The Hammer," and Abramoff, a board member of a Mercer Island charity Lapin runs, could face federal or state indictments.
So far, 32 indictments have been issued in Texas, including eight to corporations such as Sears and Bacardi. Two companies have agreed to turn state's evidence. The probe in the Lone Star State, led by Democrats, centers on possible illegal fund-raising by a political action committee (PAC) founded by DeLay.
In D.C., the FBI, a federal grand jury, and a Senate committee are reviewing questionable lobbying fees and influence peddling that link DeLay, Abramoff, and Scanlon and tie into the Texas probe. The questioned fees were apparently generated shortly after Abramoff, one of the capital's top lobbyists, left Preston Gates in 2001. It was at Preston that he developed his weighty reputation and first made contact with some of the Indian tribes now claiming that they were ripped off by him and Scanlon. Abramoff, according to e-mails obtained by investigators, referred to some of his clients as morons and idiots. He also worried about his cover being blown on allegedly covert deals in which he urged tribes to hire Scanlon, without revealing that he, Abramoff, was sharing in the enormous fees.
Abramoff and Scanlon, who is a former DeLay aide, aren't commenting, their attorneys say. DeLay, who was admonished for three congressional ethics violations last year alone, calls it all a Democratic plot. And a Preston Gates spokesperson last week said it is the firm's policy "that we do not comment on former employees or ongoing legal matters." The firm would not say whether its practices were being reviewed by any outside agency in connection with the probes.
Abramoff, 45, who grew up in Beverly Hills, has been one of D.C.'s highest-paid arm-twisters the past 10 years, with monthly retainers of up to $175,000. He earned his considerable repute through Preston Gates as a power broker for offshore sweatshops and for American Indian casinos in the 1990s. A self-described ultraconservative Orthodox Jew, Abramoff is a longtime pal of Bush brain Karl Rove, antitax guru Grover Nordquist, and religious-right leader Ralph Reed. He helped raise funds for Ronald Reagan and Ollie North, was the movie producer/writer of a Cold War potboiler called Red Scorpion, and founded a political group that supported the South African apartheid government.
Abramoff also was a founder and chair of Toward Tradition, the nonprofit Mercer Island faith-based, right-wing political coalition run by Lapin, who is a Seattle radio host on KTTH-AM (770), a GOP fund-raiser, and a native South African. Toward Tradition started in 1991 after Lapin moved here from California, where his then-followers included such Hollywood heavyweights as devout liberal Barbra Streisand. Paid $165,000 a year, according to a 2003 IRS filing, Lapin calls his Mercer Island organization a coalition of Jews and Christians formed to counter antireligious bigotry and preserve the social fabric. He is also co-chair of American Alliance of Jews and Christians, created with former GOP presidential also-ran Gary Bauer. Its board of advisers includes Jerry Falwell, Pat Robertson, Watergate conspirator Charles Colson, Abramoff, and Lapin's longtime friend and fellow radio talker Michael Medved. Lapin did not respond to repeated phone calls and e-mails to him and his staff the past two weeks.
Lapin's friend Abramoff was first hired as a lobbyist in 1994 by Preston Gates' D.C. office, Preston Gates Ellis & Rouvelas Meeds, where 60 of the firm's 400 attorneys work. Rather than litigate, most troll the power corridors in search of friendly legislation for such clients as Microsoft and the Port of Seattle, as well as an assortment of Indian tribes. The mid-1990s was the era of the Gingrich Revolution in Congress and the Contract With America, which subsequently crashed and burned. Abramoff's "relationship with Tom DeLay helped put him on the fast track," reported the monthly Texas Observer last fall. "In 1994 Abramoff got behind DeLay's whip race. When DeLay won . . . Abramoff was a made man. 'He's someone on our side,' said Ed Buckham, DeLay's chief of staff at the time. 'He has access to DeLay.'" Abramoff's Mercer Island nonprofit also joined in the GOP backslapping when, in December 1994, Toward Tradition ran an advertisement in The New York Times, offering a congratulatory "Mazel Tov" to Gingrich, noting, in reference to the Ten Commandments, "We know all about 10 Point Contracts."
Around that time, Abramoff cultivated sweatshop and casino clients for his Seattle firm, bringing in millions in fees over the next seven years and pushing Preston to near the top of the D.C. power-lobby list. He and associate Scanlon (who later helped DeLay clandestinely operate a war room to impeach Bill Clinton) used DeLay's connections to defend and promote $3-an-hour sweatshop operations in the Northern Mariana Islands, a U.S. protectorate. (See "The New Apparel Line," Sept. 16, 1999.) DeLay even showed up to play golf, visit the sweatshops, and dub it all "a perfect petri dish of capitalism." The strategy apparently worked. In 2001, the Marianas' public auditor determined that the island state had doled out $9.5 million in lobbying fees over eight years, and "about $6.7 million was paid to one lobbyist, Preston Gates." Most of $3.1 million of that amount was paid to Preston "without a valid contract," the auditor added.
Abramoff carved out the lucrative casino business for Preston, building on the 1988 law that created and controlled gambling on reservations, turning poor tribes into instant multimillionaires. (U.S. tribal casino revenue last year came to $18.5 billion.) Abramoff depended on the assistance of Delay, who, for example, was instrumental in killing an Indian-casino tax bill. Among Abramoff's clients back then, in the late 1990s, was the Mississippi Band of Choctaw Indians, who paid Preston Gates $7 million over several years and, at Abramoff's urging, gave an estimated $10 million in tribal contributions to conservative causes, according to a 2000 Wall Street Journal report. The Journal suggested that Abramoff was, among other things, "milking naive clients." But Preston continued to embrace him. No one seemed to mind that, as Abramoff put it, he was willing "to do whatever it takes to win."
In 2001, Abramoff got a better offer. He stunned Preston by taking his high fees and client list to rival Greenberg Traurig, a law and lobbying firm whose fortunes soared while, in tandem, Preston's billings tumbled. In the ensuing years, Abramoff and Scanlon, who left Preston to start his own consulting service, expanded their business alliance and zeroed in on the casinos. Investigators say they racked up as much as $34 million from just one tribe, the Coushatta of Louisiana, offering political muscle and connections. According to the Texas Observer, $24 million of that came out of the tribe's social budget, cutting short tribal health, education, and housing funds. In three years of paying lobbying costs to protect their gambling monopoly, the 800-member tribe outspent even corporate giant General Electric by $3 million. So much money flowed through Abramoff's accounts that he couldn't explain one $5 million transaction, according to a 2004 Senate Indian Affairs Committee review headed by Republican Sens. Ben Nighthorse Campbell and John McCain. (In an e-mail, Abramoff guessed, "I think I understand what he [Scanlon] did. We received $5 million . . . he divided the $5 million into three piles: $1M for actual expenses, and $2M for each of us.")
According to the committee, Abramoff, as the tribes' lobbyist, urged them to hire Scanlon to organize their political operations and push their agendas—work that Scanlon mostly subcontracted to other operatives, earning steep fees that he'd then share with Abramoff. At the least, Abramoff "owed the tribes he represented a duty to disclose his financial stake in the multimillion-dollar contract he was steering Michael Scanlon's way," said McCain. Some of the tribal money that flowed to Abramoff found its way into DeLay's political action committees and other Republican endeavors, including Texans for a Republican Majority. Those funds are among the money being probed by the state of Texas, the Senate, and the FBI and, perhaps, will be reviewed by Hastings' House ethics panel. Hastings, recipient of $5,930 in campaign contributions from another DeLay PAC, Americans for a Republican Majority, has not announced any hearings.
The scandal is great sport for the Democrats, especially the religion/gambling contradiction. Former Christian Coalition leader and now–GOP strategist Ralph Reed, for example, admitted he accepted $1.23 million in Indian-casino consulting fees from Scanlon's firm. Reed claims he never directly worked on behalf of a casino—therefore the fees were "consistent . . . with my beliefs" opposing gambling. Also embarrassing is the Senate revelation of e-mails from Abramoff to Reed. Said one, discussing a casino battle involving the Tigua tribe of Texas: "I wish those moronic Tiguas were smarter in their political contributions. I'd love us to get our mitts on that moolah." Another, from Abramoff to buddy Scanlon regarding their backroom wheeling-dealing, exclaimed: "That fucking idiot put my name on an e-mail list! What a fucking moron. He may have blown our cover!" (You can see these and other e-mails at www.indian.senate.gov.)
Though Abramoff was let go by his new firm, Greenberg Traurig, in 2004, that didn't keep him from working feverishly for the re-election of the president. Abramoff was one of the Bush campaign's "Pioneers," a title bestowed on those who raise at least $100,000. No matter that, in the midst of the presidential campaign last fall, Abramoff and pal Scanlon were summoned to testify before the Indian Affairs Committee. Only Abramoff showed, and he invoked the Fifth Amendment. Scanlon lay low, eluding service of a subpoena. Senate records indicate that Abramoff and Scanlon split $42 million of a boggling $66 million in fees paid by various casinos, and another $16 million went directly to Greenberg Traurig.
As the investigations continue, DeLay is sounding like he wishes he'd never met Rabbi Lapin's pal Abramoff, who, DeLay once declared, is "one of my closest and dearest friends." If Abramoff or anyone else is "trading on my name to get clients or to make money," said an indignant DeLay, "that is wrong and they should stop it immediately." He apparently didn't want to give influence peddling a bad name.