Abramoff: More Trouble Ahead? - Newsweek Periscope - MSNBC.com

Newsweek


Aug. 22, 2005 issue - The justice department played hardball last week with former superlobbyist Jack Abramoff, in part because of concerns he might flee to Israel. Hours before Abramoff was indicted on fraud charges in Miami last Thursday, FBI agents tried to arrest him at his Maryland home. But he'd already left for Los Angeles. Agents tracked him down on his cell phone and ordered him to surrender to the local FBI office. When Abramoff did, later that day, he was handcuffed, thrown into jail, then released last Friday on a $2.2 million bond.

Abramoff's treatment contrasted with that given his co-defendant, Adam Kidan, who was allowed to show up in court on his own. A senior Justice official says one reason was that some of Abramoff's friends and former colleagues have moved to Israel. "There was concern he could relocate to another country," says the official, who asked not to be identified because the matter involves a pending case. Neal Sonnett, Abramoff's lawyer, called the Feds' tactics "mean-spirited," and says his client is fully ready to show up in court to refute the charges, which involve an allegedly phony $23 million wire transfer to buy a fleet of casino boats.

Another possible reason for the Feds' stance: to pressure Abramoff to cooperate in a broader, D.C.-based probe that could touch members of Congress and Bush administration officials. The probe centers on tens of millions in allegedly inflated lobbying fees Abramoff collected from Indian gaming tribes. But that's not all that's under scrutiny. A lawyer for another client, Tyco International, tells NEWSWEEK that it's turned over to Justice evidence alleging Abramoff defrauded it with a lobbying campaign against legislation to bar federal contracts to U.S. companies, like Tyco, headquartered in overseas tax havens. Tyco, based in Bermuda, paid $1.7 million to Abramoff's firm in 2003 and 2004—plus $1.5 million for a "grass roots" campaign to gin up opposition to the effort among Tyco's domestic suppliers. The Tyco official who hired Abramoff is the firm's general counsel, Tim Flanigan, a former White House lawyer nominated by President Bush for deputy attorney general. Tyco lawyer George Terwilliger says the firm "was a victim of a rip-off." Abramoff, he says, recommended the $1.5 million be paid to Grassroots Interactive, a group that allegedly did little work and later diverted funds for other purposes. Grassroots is "controlled" by Abramoff, says Nathan Lewin, a lawyer for Tyco's registered agent. Abramoff's former law firm has agreed "in principle" to repay the $1.5 million, says a source close to Tyco who declined to be identified because of the sensitivity of the matter.

Abramoff, who raised more than $100,000 for Bush's re-election, allegedly told Flanigan he'd lobby White House aide Karl Rove on behalf of Tyco, says the source close to the company. Rove, whose secretary formerly worked for Abramoff, has "never spoken to [Abramoff] about any of his clients," says a White House spokeswoman. An Abramoff spokesman and his former law firm declined to comment.

—Michael Isikoff

© 2005 Newsweek, Inc.