Following the Money

The Seattle-based Preston Gates Ellis law firm is attracting more attention as the Tom DeLay investigations widen.

Abramoff (right): Former Preston big gun.

The wide-ranging federal investigations into the influence peddling of D.C. lobbyist Jack Abramoff now include a Senate inquiry related to his work for Seattle’s Preston Gates Ellis law-and-lobbying firm. The Senate Finance Committee this week was awaiting a response from Abramoff to a request for records on two nonprofit groups he chaired or helped run during his Preston Gates years. The documents could shed more light on a questionable overseas trip, arranged by Abramoff for then-House Whip Tom DeLay and paid for mostly by two Preston Gates clients. Abramoff also reportedly directly billed some of DeLay’s travel costs to Preston. The trip funding and expense billing could both be violations of congressional ethics rules. DeLay denies wrongdoing, but House Minority Leader Nancy Pelosi, D-Calif., is calling for a probe of DeLay’s role in the Preston-backed trip. Should that occur, hearings would be presided over by new House ethics chair Rep. Doc Hastings, the Pasco, Wash., Republican who has received money from DeLay’s political action committee.

Additionally, an audit of work Abramoff and Preston Gates did on behalf of sweatshops in the Northern Mariana Islands—with legislative assistance from DeLay—surfaced in a national Associated Press story March 30 that noted some lobbying payments made to Preston in the late 1990s were done so illegally. In February, Seattle Weekly reported that most of $3.1 million in Preston’s Marianas fees were, the auditor said, paid “without a valid contract.” AP showed a copy of the audit to Preston Gates managing D.C. partner Jon Blank, noting that some fees were illegally charged. Blank, a former Washington state deputy atttorney general, told AP that he wouldn’t comment specifically on the audit, but said, “Looking quickly at the report, it would seem we did our job.”

Abramoff, who worked for Preston Gates from 1994 until 2001, was first introduced to DeLay by a mutual friend and fellow conservative, Seattle Rabbi Daniel Lapin. (See “The Preston Gates Mates,” Feb. 23, 2005.) A major fund-raiser for President Bush, Abramoff is also a board member of Lapin’s Mercer Island nonprofit political coalition, Toward Tradition. A Justice Department task force, led by the FBI, and at least two congressional committees are investigating up to $66 million in lobbying and consulting fees billed, or over-billed, by Abramoff and another former Preston Gates lobbyist, Mike Scanlon—most of it earned from Indian casino operators after the two left the Seattle firm. Scanlon worked with Abramoff at the Seattle law firm and is a former aide to DeLay. Authorities are also trying to determine whether any of the questioned Abramoff funds are tied to DeLay, a Texas Republican who is now the House Majority Leader, or to Republican allies. DeLay’s political action committees are under investigation by U.S. and Texas prosecutors; more than 30 PAC-related indictments have already been issued in Texas.

Preston Gates last week declined to comment further on the latest developments. But the firm might be taking new measures to avoid a repeat of such allegations. In February, Preston revised its 2003 Guide to Political and Lobbying Activities handbook, instructing its attorneys and clients on new “limitations and restrictions applicable to individuals, corporations, and corporate political action committees,” and noting: “Since violations of the ethical restrictions can lead to strained relations, adverse publicity and even civil or criminal sanctions, caution is strongly advised.” Jill Gerber, spokesperson for Senate Finance Committee chair Charles Grassley, R-Iowa, says Abramoff has not yet responded to the March 16 records request. Asked if Preston Gates was on the committee’s list of inquiry subjects, she said, “We’re not commenting on any specific connections to specific groups.”

Much of the D.C. scandal has centered on Abramoff’s lobbying for Greenberg Traurig, the Miami-based law-and-lobbying firm that lured him, his $175,000 monthly retainers, and some of his clients away from Preston Gates in 2001. Associate Scanlon is also being questioned about whether he conspired with Abramoff to defraud some of their lobbying and public relations clients after they left Preston; both have invoked the Fifth Amendment. Abramoff’s attorney, noted D.C. criminal lawyer Abbe Lowell, who has worked for Bill Clinton and Rep. Gary Condit, has said that the heat of the ongoing U.S. investigations makes “it impossible for Abramoff to defend his work in the public arena.”

Adding to that heat are the new questions about Abramoff’s 2000 work for Preston, where he mined his impressive Republican connections. During his Preston era, Abramoff teamed with DeLay to, in particular, seek favorable legislation for Marianas sweatshops and the casinos of the Mississippi Band of Choctaw Indians. Both entities were then represented by Abramoff at Preston’s D.C. lobbying office, known as Preston Gates Ellis & Rouvelas Meeds, which employs 60 of Preston’s 400 attorneys.

DeLay, at Abramoff’s beckoning, toured Marianas sweatshops in 1997 to support the protectorate’s bid to avoid a U.S. crackdown on the captive-like garment-worker conditions, 84-hour work weeks, and $3-an-hour wages. Preston, which earned $6.7 million in Marianas lobbying fees, brought dozens of congressional members and aides to visit the sunny isles and trod its white beaches. A human rights group, Global Survival Network, said the island state was a center for international human trafficking operations. But DeLay pledged to block any legislation harmful to the $1 billion garment industry, telling contractors during a dinner in Saipan, “Stand firm. Resist evil.”

Lobbying disclosure reports and news stories show that as Abramoff picked up new Preston clients, DeLay would later be involved in legislation favoring some of them. The Wall Street Journal reported in 2000: “Mr. DeLay has received more than $50,000 from Mr. Abramoff and his clients, including the Choctaw. Federal records show that Mr. DeLay . . . or members of his staff have visited the Choctaw reservation on four separate occasions and have visited most of Mr. Abramoff’s clients. Mr. Abramoff has since hired two of Mr. DeLay’s top advisers [Scanlon and ex-deputy chief of staff Bill Jarrell, who also has left Preston] to work the Choctaw account” for the Seattle firm.

The connections between Abramoff, Delay, and the Choctaws have led to the newest development in the sprawling scandal. The tribe, which paid Preston at least $1 million annually in lobbying fees, and another Abramoff/Preston client, eLottery, each quietly contributed $25,000 to a nonprofit D.C. conservative think tank, the National Center for Public Policy Research, on May 25, 2000. That same day, according to The Washington Post, Abramoff, DeLay, his wife, and four others left for a trip to Britain sponsored by the National Center. Two months later, DeLay helped kill gambling legislation opposed by eLottery and the Choctaws.

Investigators wonder if that was an improper quid pro quo. Finance Committee chair Grassley and ranking Democrat Max Baucus of Montana are now asking Abramoff for 2000–’02 documents related to his private nonprofit, Capital Athletic Foundation (CAF), which, they wrote, has “recently come to our attention.” The senators noted that Abramoff was a center board member and that the center was also his foundation’s third-largest contributor. They asked Abramoff to “Provide a detailed schedule of all transactions among CAF and [the National Center] including transactions with board members or trustees of these entities.” That request could throw more light on the May 2000 trip with DeLay, underwritten by Preston’s clients.

The Choctaw and eLottery told the Post they were induced by Abramoff to contribute to the National Center and claim they did not know the funds might be used to sponsor DeLay’s trip. House ethics rules prevent such lobbyist-arranged payments for legislators. The two $25,000 payments surfaced after the National Journal reported existence of a trip expense voucher submitted by Abramoff to Preston Gates. The voucher sought a $12,789 reimbursement from Preston that included a $4,285 tab for the DeLays at the London Four Seasons Hotel. Such payments by a lobbyist for a House member are clearly prohibited.

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