Thursday, June 23, 2005

COM: Disgust

Senators Hear of a Wink-Wink Lobbyist Move
By
ANNE E. KORNBLUT, June 23, 2005, The New York Times

WASHINGTON, June 22 - David Grosh was living the mellow life of an off-season lifeguard in Rehoboth Beach, Del., when his childhood friend Michael Scanlon called from Washington in 2001 with a proposition.

"Want to be head of an international corporation?" Mr. Grosh said Mr. Scanlon asked him, almost in jest.

"I was like, sure," Mr. Grosh said.

Collecting less than $2,500, he became director of the American International Center, which used his rental beach house as its official address. "I was not really taking it seriously."

Four years later, Mr. Grosh, 36, wearing jeans and sideburns, recounted that tale before the Senate Indian Affairs Committee, as part of its inquiry into Jack Abramoff, the high-rolling Republican lobbyist.

The Senate panel and a federal task force are investigating whether Mr. Abramoff defrauded several Indian tribes while charging them more than $80 million in fees and expenses to promote their gambling interests.

The Rehoboth center, purportedly a think tank, turned out to be one of several nonprofit groups used by Mr. Abramoff and Mr. Scanlon, his business partner, to funnel money from the tribes to themselves and to pet projects, according to documents and testimony at the hearing on Wednesday, the third on the matter.

In what they frequently referred to as their "gimme five" scheme, Mr. Abramoff and Mr. Scanlon repeatedly talked about inflating their billable hours and shifting money between groups - a move investigators think was intended to avoid taxes and hide the origins or recipients of the money - to pay for travel, personal loans and a friend's political campaigns.

Many of the exchanges were by e-mail, giving Senate investigators concrete evidence to release to the public as they continued to build a case against Mr. Abramoff that has been mounting for nearly a year.

Referring to the conservative leader Ralph Reed, Mr. Abramoff said to Mr. Scanlon: "$100K to Ralph; $25K to contributions ($5K immediately to conservative caucus); rest gimme five."

One e-mail message from Mr. Abramoff directed his assistant to "pump up Scanlon," a reference to padding their billable hours for the Choctaws to meet an artificial $150,000 monthly target that the tribe testified it had never agreed to.

In 2001 alone, the Choctaws paid $7.7 million to Mr. Abramoff and Mr. Scanlon for lobbying work. But the pair spent just $1.2 million on the designated projects, keeping the remaining $6.5 million for "gimme five" - themselves - according to the e-mail and witnesses.

The tribe ultimately paid Mr. Scanlon as much as $15 million, and he gave Mr. Abramoff $5 million in kickbacks, said Senator John McCain, Republican of Arizona and the chairman of the Senate committee.

"Mr. Abramoff betrayed a longstanding client, betrayed his colleagues, betrayed his friend," Mr. McCain said.

The notes, many dashed off on BlackBerry devices, showed examples of greed and deceit "that even by Washington standards are breathtaking," said Senator Byron L. Dorgan of North Dakota, the leading Democrat on the committee.

"I'm past anger and bitterness," Nell Rogers, the administrative planner for the Choctaws, said in her testimony on Wednesday. "It's an extraordinary story of betrayal."

Among the transactions discussed by the Senate was a $1 million payment from the Choctaws to the National Center for Public Policy Research, a nonprofit educational group that organized an overseas trip for Representative Tom DeLay of Texas, the majority leader, in 2001.

Amy Ridenour, the group's director, said she had agreed that her group would sponsor a trip to England so Mr. DeLay could meet members of Parliament, but she testified that she learned only later that a lavish golf outing in Scotland had been included. Ms. Ridenour said she had been misled by Mr. Abramoff, whom she considered a friend for nearly 20 years, as he funneled money through her organization.

Ms. Ridenour, who testified at length, said Mr. Abramoff first helped her secure the Choctaw donation and then instructed her to cut checks to a nonprofit group, the Capital Athletic Foundation, and to a company, Nurnberger & Associates, that he said would do legitimate educational work.

Neither Ms. Ridenour nor officials from the Choctaw tribe knew that the foundation was run by Mr. Abramoff, they testified, or that he owed the owner of the Nurnberger & Associates $50,000 in unpaid personal loans from his days as a filmmaker. The testimony showed in much more detail how closely Mr. Abramoff worked with Mr. Reed, the former head of the Christian Coalition, who received some money from tribes that participate in casino gambling to run a campaign to shut down rival casinos. Mr. Reed, now a candidate for lieutenant governor in Georgia, has insisted he did not know he was receiving money from Indian gambling entities.

The panel members remarked that Mr. Abramoff had routed $10,000 from the Choctaws to Mr. Reed's campaign fund for chairman of the Georgia Republican Party, without the tribe's knowledge.

Mr. Abramoff also appeared to have a closer working relationship with Grover G. Norquist, the head of Americans for Tax Reform, than had been known. The lobbyist refers more than once to payments made by the Indian tribes to Mr. Norquist's group in exchange for visits to the White House.

"Last year Grover set a meeting for certain select tribal leaders (Coushatta and Chitimach were the only ones) and the speakers of the House of several legislatures to meet with the President in a small meeting for photos, etc.," Mr. Abramoff wrote to Chris Petras, an official from another tribe he represented, the Saginaw Chippewas, on Aug. 12, 2002. "The tribes paid for the event (total cost was $100k for the entire thing, and each tribe put in $50k). Grover has asked me to line up a few tribes to do so again."

Ms. Rogers, the Choctaw official, testified that the tribe had not intended for its payments to go to Americans for Tax Reform to gain White House access, and that in fact no one from the tribe had been part of the visit. Mr. Norquist has denied any link between the donations to his group and the West Wing visits he organized.

Some of the e-mail and testimony provoked laughter in the hearing room.

"I hate to ask your help with something so silly, but I have been nominated for membership in the Cosmos Club, which is a very distinguished club in Washington, DC, comprised of Nobel Prize winners, etc.," Mr. Abramoff wrote in an e-mail message on Sept. 15, 2000, to Rabbi Daniel Lapin, a prominent social conservative who runs Toward Tradition, an alliance of Jews and evangelical Christians.

"Problem for me is that most prospective members have received awards and I have received none," Mr. Abramoff wrote. "I was wondering if you thought it possible that I could put that I have received an award from Toward Tradition with a sufficiently academic title, perhaps something like Scholar of Talmudic Studies?"

In another e-mail message , Mr. Abramoff joked about his listing in the alumni directory for Preston Gates & Ellis, his former law firm. "I'm just surprised I am not under 'dead, disgraced or in jail,' " he wrote in the message, dated June 26, 2001.

The lobbyists under scrutiny did not comment on the hearing on Wednesday. A phone call to Mr. Scanlon's lawyer was not returned. Andrew Blum, a spokesman for Mr. Abramoff, said in a statement: "With an ongoing political investigation being directed by the U.S. Senate and an investigation at the Department of Justice, Mr. Abramoff is put into the impossible position of not being able to defend himself in the public arena until the proper authorities have had a chance to review all accusations."

Mr. Grosh, now an excavator for a construction company, described the American International Center as essentially a phantom organization. After accepting the post of director to pay off a few bills, Mr. Grosh said he began to grow wary when he heard Mr. Scanlon talk about the rest of his business enterprises. Mr. Grosh quit after about five months out of a "gut feeling," he said, that if "it involved the federal government, Indian tribes and gambling, I knew that was headed down the wrong way."

Mr. Grosh testified that he did little work for the center - which paid $1.5 million to Greenberg Traurig, Mr. Abramoff's lobbying firm - other than to install some computers in his house.

"Did you have any board meetings?" Mr. McCain asked.

"Um, I recall one," Mr. Grosh replied.

"How long did that last?" Mr. McCain continued.

"Fifteen minutes," Mr. Grosh said, drawing titters from the room.

"Do you recall any business that was discussed at these meetings?" Mr. McCain said.

"Off the top of my head?" Mr. Grosh said. "No." Then, he added: "I'm sure we discussed something."

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