DallasNews.com | Lobbyist Abramoff's status, ties didn't thwart indictment

Fraud case could force him to cut deal or opt for long legal fight


08:20 PM CDT on Sunday, August 14, 2005


By ALLEN PUSEY / The Dallas Morning News


WASHINGTON – After more than a year of investigation by four federal agencies, two Senate committees and a dogged Washington press corps, Jack Abramoff – the hard-charging conservative lobbyist, best known for his access to tribal casino cash and House Majority Leader Tom DeLay – has been indicted.

Not for the $82 million he and his partner collected from Indian gambling concerns; not for his wide-ranging political influence or the well-spread campaign cash; not for the perfidy to his one-time employers nor the embarrassing e-mails that debased his clients.

Mr. Abramoff and a business partner, Adan Kidan, were indicted by a federal grand jury in Fort Lauderdale on Thursday on six counts of mail and wire fraud in connection with their September 2000 purchase of SunCruz, a company that operates a string of casino cruise ships from Florida ports.

The Florida fraud charges caught many in Washington off-guard, adding yet another element to the array of investigations into Mr. Abramoff and his activities as a major lobbyist.

Announcing the indictment, FBI Special Agent in Charge Michael S. Clemens acknowledged the political sensitivities, noting that the grand jury's action "demonstrates that regardless of position, status, wealth, or associations, fraudulent activity will not be tolerated."


Denies wrongdoing

Mr. Abramoff's Florida attorney said the former lobbyist plans to fight the fraud charges. In civil actions related to the SunCruz transactions, Mr. Abramoff has settled some of the claims against him but has denied doing anything wrong.

Experts on white-collar crime say his feisty attitude, combined with the resources for a protracted fight, could turn Mr. Abramoff's troubles into an epic legal struggle – or turn him quickly against the politicians with whom he's most closely allied.

A law professor at Wayne State University, Peter Henning, said, "If he [Mr. Abramoff] fights it, it complicates things because the D.C. investigation will not want to interfere with Miami, and that can slow things considerably."

"But it could simplify them in a hurry if he cooperates [with the government] and has anything to deal," Mr. Henning said.

Mr. Abramoff has persistently denied any intention to turn against the politicians who have helped him.


Will his partner talk?

But the Washington Post reported Friday that Michael Scanlon, Mr. Abramoff's partner in the Indian casino lobbying programs and former communications director for House Majority Leader Tom DeLay, has been negotiating with federal authorities to do just that.

Mr. Abramoff's relationship to Mr. DeLay has been a focal point.

Mr. DeLay, whom Mr. Abramoff often described as "a close personal friend," has acknowledged that the lobbyist helped arrange and fund trips to Russia, Scotland and the Northern Marianas Islands for him and members of his family. Mr. DeLay has also said that he has done nothing wrong.

A federal grand jury in Washington, spearheaded by a task force looking at allegations of tax fraud and money-laundering, is poring over evidence regarding as much as $82 million collected by Mr. Abramoff and Mr. Scanlon for lobbying on behalf of Indian-owned casinos.

Mr. Abramoff, considered a top Republican fundraiser, has acknowledged that thousands of dollars of tribal casino cash made its way, directly or indirectly, into key political organizations dear to Mr. DeLay.


Money to politicians

Thousands more were contributed to influential politicians, both Republican and Democrat.

U.S. Rep. Bob Ney, R-Ohio, is most closely identified with Mr. Abramoff's SunCruz difficulties.

In March 2000, while Mr. Abramoff and Mr. Kidan were negotiating what would become a $147.5 million purchase of SunCruz, Mr. Ney inserted into the Congressional Record, the official publication of Congress, a harsh denunciation of Florida businessman Konstantinos "Gus" Boulis.

Mr. Boulis, a Greek immigrant who founded the popular Miami Subs fast food chain as well as SunCruz, had been under pressure from federal authorities to divest his ownership in the casino ships.

In September 2000, Mr. Boulis sold SunCruz to a group that included Mr. Kidan, Mr. Abramoff and a third partner who was not named in the indictment. In order to receive $60 million in financing for the deal, Mr. Abramoff and Mr. Kidan were required by the lenders to produce $23 million in cash as a personal investment.


Wire transfer at issue

According to the indictment, Mr. Kidan and Mr. Abramoff produced a counterfeit wire transfer to Mr. Boulis – apparently with his knowledge – as evidence of a down payment. In addition, they supplied inflated personal financial statements overstating both their income and their assets.

And when Mr. Kidan took over at SunCruz, Mr. Ney returned to the Congressional Record to praise the new SunCruz management. On Oct. 26, he described Mr. Kidan, the founder of Dial-A-Mattress, as "a businessman and as a citizen" who could "easily transform SunCruz from a questionable enterprise to an upstanding establishment."

Brian Walsh, a spokesman for Mr. Ney, said the congressman had never been questioned in regard to the SunCruz investigation but blamed the remarks on Mr. Scanlon. He said Mr. Scanlon had duped the congressman to get the endorsement. When the congressman later learned of Mr. Kidan's questionable activities, "he never spoke to Mr. Scanlon again."

After Mr. Kidan took over management of SunCruz, he and Mr. Boulis had a falling out, which culminated in a highly publicized altercation during which Mr. Kidan said Mr. Boulis had threatened to kill him.


Seller shot to death

On Feb. 6, while driving away from his Fort Lauderdale offices, Mr. Boulis was shot to death. No arrest has been made in that shooting, which is not mentioned in the indictment.

SunCruz, far from thriving under Mr. Kidan, was forced to declare bankruptcy. Under an agreement, Mr. Abramoff and Mr. Kidan abandoned their ownership of SunCruz, and Boulis-era managers were allowed to regain control of the casino operation.