The Man In The Hat Sings
Who else will lobbyist Jack Abramoff take down with him?
For years, Jack Abramoff had it all--money, power, friends in high places. He spread campaign cash and lavish gifts around Washington, hustled fat-cat clients, and palled around with power brokers on Capitol Hill. He could do no wrong. Now, however, he is the proverbial skunk at the garden party--scorned by his big-shot friends, frightened, and facing the prospect of perhaps 10 years or more in prison.
The fast rise and calamitous fall of Jack Abramoff is just the latest variation on an old Washington theme. The big question now, though, is not what happens to Abramoff but whom he'll bring down with him. The list of those with potential problems is long indeed and starts with Tom DeLay, the former House majority leader now facing his own legal woes for alleged campaign-finance shenanigans in Texas. After him, there's a handful of lesser congressional fry, perhaps a senator, and enough current and former congressional aides to field a baseball team.
People with knowledge of the federal investigation of Abramoff say prosecutors are focusing on Rep. Bob Ney, an Ohio Republican who aided Abramoff and accepted campaign donations, a golfing trip to Scotland, and other favors from the GOP lobbyist. A decision on a Ney indictment could come within weeks, sources say. Ney denies any wrongdoing.
Abramoff knew where the power was. "Jack was very good to the 'little people,'?"says a person familiar with the inquiry. "He didn't just take senators and congressmen on trips. He took staffers on trips and got them lucrative jobs.''
The Abramoff case has built slowly over the past two years into a major scandal, as investigators from the FBI and the Interior Department dug into the lobbyist's highflying life. Some old Washington hands believe that when the case finally fades from the headlines, it will go down as the biggest influence-peddling scheme to hit the nation's capital in decades.
For now, this much is certain: L'affaireAbramoff has so unnerved many Republican lawmakers that lobbying reforms are expected to pass this year. Among other changes, such reforms are likely to curb privately funded junkets for lawmakers and require more disclosure by lobbyists of funds spent to influence legislation. "What do you do when your back is up against the wall?'' asks William Canfield, a prominent Republican lawyer and lobbyist. "You create something to make the problem go away. I think you will see reforms by the end of the year.''
Dirty money. Abramoff's downfall was certified in two federal courts last week. In Washington, he pleaded guilty to charges of conspiracy, mail fraud, and evading federal income taxes, and agreed to cooperate with investigators. He admitted defrauding four clients, Indian tribes that owned casinos, and agreed to make restitution of $25 million. He also agreed to pay the IRS back taxes and penalties of $1.7 million. In a Miami courtroom, Abramoff also admitted defrauding two Florida lenders in a deal to acquire a fleet of casino ships.
Until he cut his deal with the Justice Department, Abramoff, 46, had maintained stoutly that he had done nothing wrong. He and a business partner, Michael Scanlon, hauled in more than $80 million in fees from their Indian clients. Abramoff shared some of the wealth. According to the nonpartisan Center for Responsive Politics, which tracks campaign donations, he and his Indian clients gave some $4.4 million in such gifts to more than 300 lawmakers, federal candidates, and political committees over the past six years. Recently, many lawmakers began giving up the tainted funds to charity. President Bush's re-election campaign decided to give the American Heart Association the $6,000 it had received from Abramoff, his wife, and an Indian tribal client.
Abramoff's plea agreement came as no surprise. Last November, reports began circulating in Washington that he was negotiating with government prosecutors. In fact, Abramoff's team of lawyers, led by Abbe Lowell, had been in discussions with federal investigators for more than a year, according to those with knowledge of the investigation. U.S.News was told that initially, Abramoff faced the prospect of being charged with crimes that could have carried a prison term of more than 100 years. His lawyers "fought very hard for over a year,'' says a source, to get him a better deal.
Now, the government is preparing to reap the benefits. Investigators "will follow this guy into Congress and into the executive branch, including Interior,''this person says. "Obviously, they will drain him dry about what he knows.''
With With Jennifer Jack
This story appears in the January 16, 2006 print edition of U.S. News & World Report.