McCain: Indians were betrayed

By BOB KEMPER
The Atlanta Journal-Constitution

WASHINGTON — As they maneuvered to take millions of dollars from Indian tribes, Washington lobbyist Jack Abramoff and a partner betrayed longtime friends, created fake invoices and companies and shuffled money between nonprofit groups and charities to conceal their involvement and avoid paying taxes, a Senate committee charged last month.

Even though a federal grand jury, the FBI and a task force of federal agencies are already investigating Abramoff and Michael Scanlon, senators called for new investigations of the pair for possible mail and wire fraud, tax evasion and abuse of charity tax laws.

“This investigation has taken twists and turns that we had not anticipated,” said Sen. Byron Dorgan of North Dakota, the top Democrat on the Senate Indian Affairs Committee. “It has uncovered deceptions and greed that even by Washington standards are breathtaking.”

“We view this just as a gigantic scam,” said committee Chairman John McCain (R-Ariz.).

Abramoff and Scanlon represented six Indian tribes that owned casinos as they sought to support the passage of laws that would suppress competition in Alabama and Texas, dramatically overcharging them in the process, investigators contend. Hundreds of e-mails and invoices released by the committee shed new light on how the pair managed to generate and conceal millions of dollars in fees from the tribes and how their deceits ran from hugely ambitious deals to matters as small as an awards plaque.

“Today’s hearing is about more than contempt, even more than greed,” McCain said on June 22. “It is simply and sadly a tale of betrayal.”

Committee members expressed incredulity at the number and different types of organizations, many of them tied to conservative causes, that Scanlon and Abramoff used to hide their profits and to funnel gifts to leading members of Congress.

“If you dyed that money purple, there would be a lot of purple pants pockets around this town,” Dorgan said.

Friend: Abramoff lied

Evidence presented June 22 showed Abramoff and Scanlon purposely used nonprofit groups that are not required by law to disclose their donors, including Americans for Tax Reform, run by longtime Abramoff friend Grover Norquist.

Amy Ridenour testified that Abramoff, a friend for decades, had lied to her when he funneled $1 million of tribal money through her group, the National Center for Public Policy Research, and when he got the group to fund a golf outing to Scotland for House Majority Leader Tom DeLay (R-Texas) by saying it was a trip to visit the British Parliament.

“He always said it would be no problem and I believed him,” said Ridenour, whose center is barred by tax law from participating in political endeavors or lobbying. “Frankly, I’m appalled.”

David Grosh, a former yoga instructor and lifeguard in Rehoboth Beach, Del., testified that Scanlon, whom he has known since childhood, one day called and offered to make him head of the American International Center, which, unknown to Grosh, was being created to shuffle millions of dollars in secret profits.

“I asked him what I have to do and he said, ‘Nothing.’ So I said OK,” said Grosh, who was paid about $2,000 for allowing his home address to be used as the center’s.

“I got out of it when I found out it involved the federal government, Indians and gambling,” Grosh said. “I know that was headed down the wrong way.”

Senate investigators asserted that a nonprofit group Abramoff set up in Washington, the Capital Athletic Foundation, was used primarily to help Abramoff avoid paying taxes on his profits, and that while the organization provided very little money to legitimate civic groups, it did send money to a sniper instructor in Israel.

When the instructor offered to send paperwork on letterhead to make the contribution look legitimate, Abramoff balked. “I don’t want sniper letterhead,” he wrote in an e-mail.

The e-mails showed that Abramoff was deceitful in the most benign matters.

Abramoff wrote to a rabbi in 2000 saying he was being considered for admission to the exclusive Cosmos Club in Washington, but fretting that he didn’t have a lot of awards like other members.

He asked the rabbi to create an award citing him as a “Scholar of Talmudic Studies” — with the date showing it had been given years earlier.

“I just need to know what needs to be produced,” the rabbi wrote back. “Letters? Plaques? Neither?”

“Probably just a few clever titles of awards, dates and that’s it,” Abramoff responded. “Do you have any creative titles or should I dip into my bag of tricks?”

Abramoff declined to testify when he appeared before the committee in September, citing his Fifth Amendment rights against self-incrimination. Scanlon did the same at a November hearing.

After the June 22 hearing, Abramoff’s spokesman, Andrew Blum, released a statement to The Associated Press saying, “With the 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.”

Millions pocketed

Testimony and evidence presented by the committee at the June 22 hearing showed Abramoff and Scanlon charged their Indian clients millions of dollars in lobbying and public relations fees but spent only a small part of the money on such activities.

The Choctaw tribe of Mississippi paid the two men $7.7 million in 2001 alone. Scanlon spent $1.2 million on political fieldwork to help the tribe and he and Abramoff split the remaining $6.5 million.

The tribes never knew that Abramoff and Scanlon were working together.

After being hired by a tribe as a lobbyist at a relatively low cost, Abramoff would persuade the members to hire Scanlon’s company, Capitol Campaign Strategies, to do political fieldwork.

Scanlon then charged much larger fees and split the money with Abramoff.

Of the $66 million the two men had collected from the tribes since 2001, $22 million went directly to Abramoff, McCain said.

The e-mails released June 22 — a tiny portion of what one witness said were 60,000 such messages collected by Senate investigators — show that Abramoff and Scanlon were often lighthearted in their discussions about the scheme, which they called “give me five” deals.

In one e-mail, Abramoff joked about being included in an alumni directory being put together by his former employer.

“I’m just surprised I am not under ‘dead, disgraced or in jail,’” he wrote.

Bob Kemper writes for The Atlanta Journal-Constitution. E-mail: bkemper@ajc.com