Snake Eyes for 'Casino Jack'
Lobbyist Jack Abramoff was the toast of the town. Now he's persona non grata. It's a Washington story
Some had a different view. Marc Schwartz, a Texas consultant who served as the Tiguas' point man on the deal with Abramoff, told a congressional panel it was one of "the most despicable acts of greed and fraud that I hope to never, ever see again." Today, the Tigua affair is at the heart of a complex series of deals and machinations that may, in sum, represent the biggest political lobbying scandal to hit Washington in a generation. A federal grand jury is looking into Abramoff's lucrative lobbying on behalf of several Indian tribes and examining his relationships with influential members of Congress. Along with Scanlon, Abramoff collected a staggering $87 million over five years from tribes in Louisiana, Michigan, California, Mississippi, and Alabama, congressional investigators say.
What the feds want to know now is how all that money was spent and just what, if anything, it bought. Among the allegations under investigation: that Abramoff, 46, overcharged and defrauded his Indian clients; that he used a series of nonprofit, tax-exempt organizations run by his friends to surreptitiously deliver favors to lawmakers and their staffs; and that he took unfair advantage of his relationships with tribal clients by persuading them to deliver huge campaign contributions to his political allies and make charitable donations to his pet causes. Investigators are also curious about whether Abramoff improperly steered business to Scanlon by suggesting to his tribal clients that they augment his lobbying efforts by hiring a grass-roots field organizer to build political support. The grass-roots outfit Abramoff recommended, investigators say, was none other than Scanlon's Capital Campaign Strategies, and what the tribes didn't know was that the two men were allegedly splitting the fees paid to the firm. Congressional records show that over a five-year period, Scanlon billed six Indian tribes for more than $66.3 million and Abramoff pocketed $21 million of it. That's over and above what Abramoff billed the tribes on behalf of the firms he worked for, to whom they paid monthly retainers of between $125,000 and $150,000.
Southern discomfort. That's only part of the story, however. Earlier this month, Abramoff and a former business partner were indicted on federal fraud charges related to the failed purchase of a Florida casino-boat company. The six-count indictment alleges that Abramoff and Adam Kidan falsified a wire transfer of $23 million in order to persuade two lenders to produce $60 million to finance the purchase of the firm, SunCruz Casinos, from Konstantinos "Gus" Boulis, in 2000. Boulis was killed by three gunshots to the chest in early 2001 as he drove home from a business meeting, and the crime remains unsolved. The indictment makes no mention of the killing. Through his attorney, Abramoff has denied the fraud charges.
Prosecutors often like to use criminal charges from one inquiry as leverage in another, and that may well happen with the investigation underway in Washington. But people familiar with the investigations say prosecutors aren't in a big hurry. "There is no need to rush into this thing," says a person familiar with the Washington inquiry. "It is almost a foregone conclusion that [the grand jury] could indict him anytime [it] wanted to. For now, he spent a night in jail [in relation to the Florida charges]. Let's see what his mind-set is." Prosecutors would ultimately like to secure Abramoff's cooperation, the source added. With more than 40 FBI agents assigned to the case, there is every indication that prosecutors are interested in more than just a couple of lobbyists. The source also confirmed a recent Washington Post report that Scanlon, a former press aide to House Majority Leader Tom DeLay, has been in discussions with Justice Department lawyers. Stephen Braga, a Washington lawyer representing Scanlon, did not respond to E-mail or phone messages. Andrew Blum, a spokesman for Abramoff, says his client "has been singled out and vilified with exaggerated and false allegations. The truth is that Mr. Abramoff's actual conduct was proper and constituted lobbying techniques used by almost every lobbyist in Washington, D.C., on a daily basis." As for the Tigua affair, Blum says Abramoff was initially fighting not against the tribe but against another casino just outside Houston that Abramoff felt was in direct competition with a Louisiana casino run by one of his other American Indian clients, the Louisiana Coushattas. "When work under state law to stop the Houston casino spilled over to also affect the Tiguas, which was not the goal of Mr. Abramoff or his clients," says Blum, "Mr. Abramoff then sought to help the Tiguas obtain relief under federal law."