Tales of Jack and Mike
Even by the most cynical Washington standards, the tale of the Indian tribes and the fat-cat lobbyists is a doozy. Imagine: Interested in protecting their lucrative casino gambling interests, the tribes hire some top-drawer Washington influence peddlers. Nothing unusual there--influence, or access to the influential, is peddled every day in the nation's capital. In this case, maybe it even makes some sense that your lobbyists are Jack Abramoff and Michael Scanlon, two hired guns who liked to brag about their ties to powerful Republicans. All the better, right? Never mind that the pleasure of working with the two lobbyists may have cost one tribe more than $30 million and another about half that. Big bucks, to be sure--but the tribes thought they were buying fancy grassroots and Washington lobbying services.
Think again.
Abramoff and Co., according to documents released by Senate investigators, were instead lining their pockets, setting up apparently sham tax-exempt foundations that contributed to their favorite charities: themselves. And tribal money not only wound up in their own pockets but also funded some of their pet causes. In Abramoff's case, that meant a yeshiva here and another school abroad--to train Jewish settlers to fight the Palestinian intifada. (Abramoff is an Orthodox Jew.) "I'm past anger and bitterness," Nell Rogers, who worked with the Choctaw, told a Senate committee. "But . . . it's an extraordinary story of betrayal--of deliberately building trust and then betraying it."
Nice work. The betrayal could also be criminal. That's why two congressional committees, the FBI, the IRS, and a federal grand jury are investigating what Arizona's John McCain calls a tale "about more than contempt, even more than greed." The alleged scheme was breathtaking: First, use the guise of tax-exempt groups--with appropriately vague names like the Capital Athletic Foundation. Then collect fat fees from the tribes and tell them you're working tirelessly on their behalf. Finally, use the money mostly as your own personal piggy bank.
In Washington, power is always about information and only sometimes about money. Abramoff and his pal Scanlon may well have controlled both, at least as far as the tribes were concerned. One former associate told Senate investigators that his bosses had the tribes coming and going: They would whip up opposition to the Indian casinos by setting up fake religious phone banks, then they would beat them back, convincing the tribes they had done a magnificent job representing their interests.
Too bad for these guys that they left an E-mail trail, full of instructions about how to scam the tribes and juvenile towel-snapping when their schemes worked. Here's an Abramoff E-mail to Scanlon, once a spokesman for House Majority Leader Tom DeLay, advising how to con a representative of one tribe: "I think you should call her and tell her that we have turned the corner but you are pouring it on to make sure we win. Tell her as of now you're finally willing to say we will win this, but laughingly say, 'I don't know how I'm going to get back all the money I had to dump into this.' . . . That will set her up for a discussion about payments." How clever.
But probably not as clever as the use of phony nonprofit groups they invented to funnel money to whatever suited their purposes. My personal favorite: The American International Center, a bogus global think tank apparently set up by the boys to funnel money to themselves and their favorite causes. It was, its website said, "founded under the high-powered directorship of David A. Grosh . . ." High-powered? Not quite. Turns out that Grosh is a boyhood friend of Scanlon's--and someone who has not spent a lot of time on global issues. He's a former lifeguard and a bartender, among other things. Still, that didn't stop Scanlon from calling him one day in 2001 to ask, according to Grosh, "Do you want to be head of an international corporation?" Grosh's response: "I was like, sure. . . . I asked him what I had to do, and he said 'nothing.' So that sounded pretty good to me." Nice work if you can get it.
Some tribes, which say they were bilked out of millions, are suing to get their money back. Abramoff and Scanlon, in the meantime, are out of work, pleading the Fifth before congressional committees as they plan their defense. We can't wait to hear it. Or at least read the E-mails.
This story appears in the July 4, 2005 print edition of U.S. News & World Report.