Washington Post | Tyco Exec: Abramoff Claimed Ties to Administration

Tyco Exec: Abramoff Claimed Ties to Administration

By R. Jeffrey Smith
Washington Post Staff Writer
Friday, September 23, 2005; A06



Republican lobbyist Jack Abramoff bragged two years ago that he was in contact with White House political aide Karl Rove on behalf of a large, Bermuda-based corporation that wanted to avoid incurring some taxes and continue receiving federal contracts, according to a written statement by President Bush's nominee to be deputy attorney general.

Timothy E. Flanigan, general counsel for conglomerate Tyco International Ltd., said in a statement to the Senate Judiciary Committee last week that Abramoff's lobbying firm initially boasted that Abramoff could help Tyco fend off a special liability tax because he "had good relationships with members of Congress," including House Majority Leader Tom DeLay (R-Tex.).

Abramoff later said "he had contact with Mr. Karl Rove" about the issue, according to the statement by Flanigan, who oversaw Tyco's dealings with Abramoff and his firm and received reports from Abramoff about progress in the lobbying campaign. Flanigan's statement is the latest indication that Abramoff promoted himself as having ready access to senior officials in the Bush administration.

A White House spokeswoman, Erin Healy, said Rove "has no recollection" of being contacted by Abramoff about Tyco's concerns.

Abramoff was indicted last month on unrelated wire fraud and conspiracy charges and has lost many of his high-stakes lobbying clients. He was hired in 2003 by Tyco when the company was in turmoil. Abramoff's firm, Greenberg Traurig, promoted him as Tyco's savior on the tax issue, according to Flanigan's statement and others familiar with the process.

Tyco -- whose executive L. Dennis Kozlowski had just departed under an ethics cloud -- was worried that the Bush administration might embrace legislation promoted by Democrats that would impose higher taxes on domestic-centered companies that had moved offshore to cut their tax bills. The legislation was motivated by popular anger over such offshore moves, and carried the additional penalty of barring such firms from receiving federal contracts.

Lobbying disclosure statements filed by Abramoff listing his work for Tyco cite the "Executive Office of the President" as one of his lobbying targets on the tax and contracts issues. Others were the Department of Commerce, the General Services Administration and Congress. Greenberg Traurig records submitted to Tyco describe specific contacts with the White House legislative office, a source familiar with the matter said yesterday.

Rove's personal assistant at the time, Susan Ralston, formerly worked as Abramoff's secretary. It could not be learned yesterday whether she was among those contacted by any of the 14-person Greenberg team recorded as working on the Tyco account.

The Bush administration was never enthusiastic about the tax penalty, but both the House and Senate approved language in 2002 denying federal contracts to companies largely based in the United States but incorporated in tax havens.

Tyco was among a raft of companies, including Ingersoll-Rand and Noble Corp., that hired an army of lobbyists to stall the legislation and ultimately kill most of it. House Republican leaders argued that corporate flight was merely a symptom of a much broader problem with the U.S. tax code that should be treated in a larger tax reform package.

Abramoff remains the focus of a lengthy investigation by a task force led by prosecutors at the Justice Department and including investigators at the Internal Revenue Service, the Interior Department and General Services Administration. The probe was initially focused on whether he bilked Native American tribes that paid him tens of millions of dollars in lobbying and other fees, but has since widened to include other matters.

Flanigan, who is still at Tyco while awaiting a committee vote on his nomination, said in his Sept. 15 written statement that he would "consult with DOJ ethics officials . . . and apply normal recusal standards" about the Justice Department's investigation of Abramoff.

Flanigan said he would recuse himself from any Abramoff investigation involving Tyco. Portions of his statement were first reported in the Los Angeles Times.

The ties between Tyco and Greenberg Traurig have already been investigated by a special counsel appointed by Greenberg to examine Abramoff's activities at the firm. According to knowledgeable sources and Flanigan's written statement, Greenberg has promised to repay three-quarters of a $2 million fee that Tyco paid, at Abramoff's direction, to a firm called Grassroots Interactive.

The fee was supposed to finance a letter-writing campaign by Tyco suppliers against the offshore tax bill, but Greenberg concluded that $1.5 million of it was "diverted to entities controlled by Mr. Abramoff" and misspent, according to Flanigan's statement.

Andrew Blum, a spokesman for Abramoff's law firm, declined to comment, as did Jill Perry, a spokeswoman for Greenberg Traurig.

Staff reporter Jonathan Weisman contributed to this report.

Bloomberg.com: U.S. | Abramoff Probe May Threaten Leading Republicans as It Expands

By Jonathan D. Salant

Sept. 22 (Bloomberg) -- The widening investigation of lobbyist Jack Abramoff is moving beyond the confines of tawdry influence-peddling to threaten leading figures in the Republican hierarchy that dominates Washington.

This week's arrest of David Safavian, the former head of procurement at the Office of Management and Budget, in connection with a land deal involving Abramoff brings the probe to the White House for the first time.

Safavian once worked with Abramoff at one lobbying firm and was a partner of Grover Norquist, a national Republican strategist with close ties to the White House, at another. Safavian traveled to Scotland in 2002 with Abramoff, Representative Robert Ney of Ohio and another top Republican organizer, Ralph Reed, southeast regional head of President George W. Bush's 2004 re-election campaign.

House Majority Leader Tom DeLay, who once called Abramoff ``one of my closest and dearest friends,'' already figures prominently in the investigation of the lobbyist's links to Republicans. The probe may singe other lawmakers with ties to Abramoff, such as Republican Senator Conrad Burns of Montana, as well as Ney.

``These people all shared transactions together,'' said former House Democratic counsel Stan Brand, now a partner in the Washington-based Brand Law Group. ``That's always something that worries defense lawyers.''

Nervous Republicans

Some Republicans acknowledge they are nervous. ``Sure there's a concern,'' said former Representative Jack Quinn of New York, who's now president of Cassidy & Associates, a Washington lobbying firm. ``But like everyone else, we have to wait and see where the investigation goes.''

Abramoff, 46, a top fund-raiser for Bush's re-election campaign, is under investigation by a government task force consisting of the Justice Department's public integrity section, the FBI, the Internal Revenue Service and the Interior Department's inspector general. The Senate Indian Affairs Committee is conducting another inquiry.

Safavian, 38, who in the 1990s worked with Abramoff at the Washington-based lobbying firm of Preston Gates Ellis & Rouvelas Meeds, was charged Sept. 19 by the Justice Department with making false statements about whether he had any dealings with the lobbyist in the course of Abramoff's attempts to obtain government land. He was also charged with obstructing an investigation. His lawyer, Barbara Van Gelder, told the Washington Post he would vigorously contest the charges.

Safavian took the Scotland trip three years ago aboard a chartered jet. Abramoff was paying for the plane, Safavian said in an e-mail to the ethics office of his employer at the time, the U.S. General Services Administration.

Abramoff's Network

Abramoff's web of connections runs deep in the Republican Party. DeLay, 58, has participated in at least three overseas trips he sponsored; Democrats have demanded that the House ethics committee investigate whether DeLay violated House rules prohibiting lawmakers from accepting trips financed by lobbyists.

One of those trips was to the Commonwealth of the Northern Mariana Islands, a U.S. territory. DeLay has opposed legislation requiring the Marianas to follow U.S. minimum wage and labor laws. Abramoff was lobbying for the Marianas at the time.

Two former DeLay aides, spokesman Michael Scanlon and deputy chief of staff William Jarrell, worked with Abramoff. Jarrell later was part of Bush's transition team focusing on the Interior Department, the parent agency for the Bureau of Indian Affairs, at a time when Abramoff was representing casino-owning tribes. The Senate Indian Affairs Committee is investigating Abramoff's and Scanlon's work for the tribes.

Diverted Funds

Abramoff diverted funds paid to him by Indian tribe clients that were supposed to be used on lobbying activities to a variety of personal projects, according to testimony and e-mails released at a Senate Indian Affairs Committee hearing. The personal projects ranged from an Orthodox Jewish academy to an Israeli sniper school; some money also went to pay off a personal debt, according to the testimony and e-mails.

Abramoff and Scanlon took in more than $66 million in fees from 2001 to 2004 from tribal clients, according to Senator John McCain, the Arizona Republican who chairs the Indian affairs panel. In one e-mail released by the Senate committee, Abramoff wrote to Scanlon, ``I have to meet with the monkeys from the Choctaw tribal counsel.''

Abramoff also has a relationship with Ney, the Ohio congressman. Ney's former chief of staff, Neil Volz, worked with Abramoff at the Miami-based law firm of Greenberg Traurig LLP.

Reopening a Casino

Ney, 51, in 2002 agreed to insert language in federal legislation to allow an Abramoff client, the Tigua Indians of El Paso, Texas, to reopen a casino closed by state authorities. The provision didn't make it into the final measure.

In 2000, Ney placed two statements in the Congressional Record in support of Abramoff's purchase of SunCruz Casino Ltd., a casino ship company. Abramoff was indicted by a federal grand jury in Fort Lauderdale, Florida, in August on wire fraud charges in connection with the purchase.

Burns, 70, who is up for re-election in 2006, has been the subject of an advertising campaign by the Montana Democratic Party criticizing him for receiving $136,500 in donations from Indian tribe clients of Abramoff and Scanlon from 2001 to 2004. Burns in 2003 pushed for a wealthy Michigan Indian tribe, one of Abramoff's clients, to receive a $3 million federal grant.

Two former aides of Burns, Will Brooke and Shawn Vasell, went to work with Abramoff at Greenberg Traurig.

Burns spokesman Grant Toomey said the request for the grant came from the Michigan congressional delegation.

An Offer to Meet

Ney spokesman Brian Walsh said, ``The congressman has sent two letters to the House ethics committee as far back as last year offering to meet with them. To date, there has been no response.'' Walsh said there have been no inquiries from the Justice Department ``on any matter related to Mr. Abramoff.''

DeLay spokesman Kevin Madden said the majority leader has asked the ethics committee ``to look into everything in order to exonerate him.''

Norquist declined through a spokesman to comment. Reed didn't respond to a request for comment.

Ed Patru, a spokesman for the National Republican Congressional Committee, said Abramoff won't be an issue in next year's mid-term congressional elections. ``No member of Congress has ever been kicked out of office because of an allegation against another member or another lobbyist,'' Patru said. ``Democrats are trying to nationalize the 2006 elections. Their approach has been to throw everything up against the wall and hope something sticks.''

Gambling in Alabama

Abramoff's links to the party go beyond lawmakers. He worked with Reed, a former director of the Republican-oriented Christian Coalition, and Norquist to kill an effort to bring legalized gambling to Alabama.

At Abramoff's behest, one of his tribal clients, whose casino could have been hurt by the competition, sent money to Norquist's anti-tax group, Americans for Tax Reform, which in turn wrote a check to help Reed's effort.

One of Norquist's former partners in another venture was Safavian. The two men worked at Janus-Merritt Strategies LLC, a Washington lobbying firm that was later sold to a Richmond, Virginia-based law firm, Williams Mullen.

``Safavian is a small fish, but in combination with Abramoff and his ties to Norquist and DeLay, it presents a very inviting target to Democrats,'' said Ross Baker, a political scientist who studies congressional politics at Rutgers University in New Brunswick, New Jersey.

Safavian was one of three former Abramoff associates who joined the Bush administration. Another was Patrick Pizzella, assistant secretary of labor for administration and management. The third was Susan Ralston, special assistant to White House deputy chief of staff Karl Rove.

Guardian Unlimited | World Latest | Abramoff Probe Moves Forward With Arrest

By MARK SHERMAN

Associated Press Writer

WASHINGTON (AP) - The arrest of a former White House official marks a new phase in the investigation of Jack Abramoff in which authorities seek to extract information about the high-powered Republican lobbyist.

David Safavian was arrested Monday and charged with making false statements and obstructing a federal investigation relating to a 2002 golf outing to Scotland with Abramoff, former Christian Coalition executive Ralph Reed, Rep. Bob Ney, R-Ohio, and others.

Safavian is the first person to face charges arising out of the probe of Abramoff, a major Republican fundraiser with close ties to GOP leaders in Congress.

Investigators frequently seek to pressure minor players in complex federal probes as they build a case against their principal target.

``You squeeze that person and hope he flips as you work your way up to the top,'' said Kirby Behre, a former prosecutor who is a partner at the Paul, Hastings, Janofsky & Walker law firm in Washington.

Abramoff is under investigation for his lobbying activities on behalf of Indian tribes and his role in paying for overseas trips for House Majority Leader Tom DeLay. The Texas Republican has denied knowing Abramoff paid the expenses.

Separately, Abramoff has pleaded innocent to a six-count federal fraud and conspiracy indictment stemming from his role in the 2000 purchase of a fleet of gambling boats in Florida.

Safavian, a former Abramoff lobbying associate, abruptly resigned last week as the Bush administration's top procurement official, three days before his arrest.

He had hid from investigators that Abramoff had business before the General Services Administration - where Safavian was chief of staff in 2002 - when they took their Scotland trip, according to federal authorities.

Safavian met with an FBI agent in May about the travel, including a round of golf at St. Andrews, and Abramoff's interest in acquiring property from GSA, according to the federal complaint filed in U.S. District Court in Washington.

Barbara Van Gelder, Safavian's lawyer, said federal authorities are attempting to pressure her client to cooperate with the Abramoff investigation. She said he would fight the charges.

Safavian accurately reported that Abramoff was not doing business with GSA at the time of the trip, Van Gelder said.

``This is a creative use of the criminal code to secure his cooperation against someone else,'' Van Gelder said in an interview Wednesday.

Federal agents arrested him at his home in Virginia, rather than allow him to turn himself in, as is often done in white-collar criminal cases. Safavian has not been indicted.

``These charges are relatively minor federal charges,'' said David Schertler, another former federal prosecutor in Washington. ``It does show they're trying to use some of the muscle of law enforcement to send a message to him but probably to others as well that this could happen to you.''

A law enforcement official speaking on condition of anonymity because the investigation is under way disputed the notion that people charged in white-collar crimes typically are allowed to turn themselves in, but acknowledged that securing Safavian's cooperation could have been one reason for the way prosecutors handled his arrest and the resulting publicity.

The Justice Department issued a news release announcing the arrest only after Safavian had been taken to federal court and released without bail. Prosecutors have made no comment since.

Safavian's next court appearance is scheduled for Oct. 7.

Bloomberg.com: Abramoff Probe May Threaten Leading Republicans as It Expands

Sept. 22 (Bloomberg) -- The widening investigation of lobbyist Jack Abramoff is moving beyond the confines of tawdry influence-peddling to threaten leading figures in the Republican hierarchy that dominates Washington.

This week's arrest of David Safavian, the former head of procurement at the Office of Management and Budget, in connection with a land deal involving Abramoff brings the probe to the White House for the first time.

Safavian once worked with Abramoff at one lobbying firm and was a partner of Grover Norquist, a national Republican strategist with close ties to the White House, at another. Safavian traveled to Scotland in 2002 with Abramoff, Representative Robert Ney of Ohio and another top Republican organizer, Ralph Reed, southeast regional head of President George W. Bush's 2004 re-election campaign.

House Majority Leader Tom DeLay, who once called Abramoff ``one of my closest and dearest friends,'' already figures prominently in the investigation of the lobbyist's links to Republicans. The probe may singe other lawmakers with ties to Abramoff, such as Republican Senator Conrad Burns of Montana, as well as Ney.

``These people all shared transactions together,'' said former House Democratic counsel Stan Brand, now a partner in the Washington-based Brand Law Group. ``That's always something that worries defense lawyers.''

Nervous Republicans

Some Republicans acknowledge they are nervous. ``Sure there's a concern,'' said former Representative Jack Quinn of New York, who's now president of Cassidy & Associates, a Washington lobbying firm. ``But like everyone else, we have to wait and see where the investigation goes.''

Abramoff, 46, a top fund-raiser for Bush's re-election campaign, is under investigation by a government task force consisting of the Justice Department's public integrity section, the FBI, the Internal Revenue Service and the Interior Department's inspector general. The Senate Indian Affairs Committee is conducting another inquiry.

Safavian, 38, who in the 1990s worked with Abramoff at the Washington-based lobbying firm of Preston Gates Ellis & Rouvelas Meeds, was charged Sept. 19 by the Justice Department with making false statements about whether he had any dealings with the lobbyist in the course of Abramoff's attempts to obtain government land. He was also charged with obstructing an investigation. His lawyer, Barbara Van Gelder, told the Washington Post he would vigorously contest the charges.

Safavian took the Scotland trip three years ago aboard a chartered jet. Abramoff was paying for the plane, Safavian said in an e-mail to the ethics office of his employer at the time, the U.S. General Services Administration.

Abramoff's Network

Abramoff's web of connections runs deep in the Republican Party. DeLay, 58, has participated in at least three overseas trips he sponsored; Democrats have demanded that the House ethics committee investigate whether DeLay violated House rules prohibiting lawmakers from accepting trips financed by lobbyists.

One of those trips was to the Commonwealth of the Northern Mariana Islands, a U.S. territory. DeLay has opposed legislation requiring the Marianas to follow U.S. minimum wage and labor laws. Abramoff was lobbying for the Marianas at the time.

Two former DeLay aides, spokesman Michael Scanlon and deputy chief of staff William Jarrell, worked with Abramoff. Jarrell later was part of Bush's transition team focusing on the Interior Department, the parent agency for the Bureau of Indian Affairs, at a time when Abramoff was representing casino-owning tribes. The Senate Indian Affairs Committee is investigating Abramoff's and Scanlon's work for the tribes.

Diverted Funds

Abramoff diverted funds paid to him by Indian tribe clients that were supposed to be used on lobbying activities to a variety of personal projects, according to testimony and e-mails released at a Senate Indian Affairs Committee hearing. The personal projects ranged from an Orthodox Jewish academy to an Israeli sniper school; some money also went to pay off a personal debt, according to the testimony and e-mails.

Abramoff and Scanlon took in more than $66 million in fees from 2001 to 2004 from tribal clients, according to Senator John McCain, the Arizona Republican who chairs the Indian affairs panel. In one e-mail released by the Senate committee, Abramoff wrote to Scanlon, ``I have to meet with the monkeys from the Choctaw tribal counsel.''

Abramoff also has a relationship with Ney, the Ohio congressman. Ney's former chief of staff, Neil Volz, worked with Abramoff at the Miami-based law firm of Greenberg Traurig LLP.

Reopening a Casino

Ney, 51, in 2002 agreed to insert language in federal legislation to allow an Abramoff client, the Tigua Indians of El Paso, Texas, to reopen a casino closed by state authorities. The provision didn't make it into the final measure.

In 2000, Ney placed two statements in the Congressional Record in support of Abramoff's purchase of SunCruz Casino Ltd., a casino ship company. Abramoff was indicted by a federal grand jury in Fort Lauderdale, Florida, in August on wire fraud charges in connection with the purchase.

Burns, 70, who is up for re-election in 2006, has been the subject of an advertising campaign by the Montana Democratic Party criticizing him for receiving $136,500 in donations from Indian tribe clients of Abramoff and Scanlon from 2001 to 2004. Burns in 2003 pushed for a wealthy Michigan Indian tribe, one of Abramoff's clients, to receive a $3 million federal grant.

Two former aides of Burns, Will Brooke and Shawn Vasell, went to work with Abramoff at Greenberg Traurig.

Burns spokesman Grant Toomey said the request for the grant came from the Michigan congressional delegation.

An Offer to Meet

Ney spokesman Brian Walsh said, ``The congressman has sent two letters to the House ethics committee as far back as last year offering to meet with them. To date, there has been no response.'' Walsh said there have been no inquiries from the Justice Department ``on any matter related to Mr. Abramoff.''

DeLay spokesman Kevin Madden said the majority leader has asked the ethics committee ``to look into everything in order to exonerate him.''

Norquist declined through a spokesman to comment. Reed didn't respond to a request for comment.

Ed Patru, a spokesman for the National Republican Congressional Committee, said Abramoff won't be an issue in next year's mid-term congressional elections. ``No member of Congress has ever been kicked out of office because of an allegation against another member or another lobbyist,'' Patru said. ``Democrats are trying to nationalize the 2006 elections. Their approach has been to throw everything up against the wall and hope something sticks.''

Gambling in Alabama

Abramoff's links to the party go beyond lawmakers. He worked with Reed, a former director of the Republican-oriented Christian Coalition, and Norquist to kill an effort to bring legalized gambling to Alabama.

At Abramoff's behest, one of his tribal clients, whose casino could have been hurt by the competition, sent money to Norquist's anti-tax group, Americans for Tax Reform, which in turn wrote a check to help Reed's effort.

One of Norquist's former partners in another venture was Safavian. The two men worked at Janus-Merritt Strategies LLC, a Washington lobbying firm that was later sold to a Richmond, Virginia-based law firm, Williams Mullen.

``Safavian is a small fish, but in combination with Abramoff and his ties to Norquist and DeLay, it presents a very inviting target to Democrats,'' said Ross Baker, a political scientist who studies congressional politics at Rutgers University in New Brunswick, New Jersey.

Safavian was one of three former Abramoff associates who joined the Bush administration. Another was Patrick Pizzella, assistant secretary of labor for administration and management. The third was Susan Ralston, special assistant to White House deputy chief of staff Karl Rove.