News and articles relating to the scandal surrounding Washington D.C. lobbyist Jack Abramoff

Thursday, December 15, 2005

AP Wire | 12/15/2005 | Former Abramoff partner pleads guilty in Suncruz fraud case

CURT ANDERSONAssociated PressMIAMI - The former business partner of Washington lobbyist Jack Abramoff in the ill-fated purchase of the SunCruz Casinos fleet of gambling boats pleaded guilty Thursday to federal fraud and conspiracy charges involving the 2000 deal.
Adam Kidan, 41, said "Guilty, your honor," when asked for a plea by U.S. District Judge Paul C. Huck. A plea agreement with the government requires that Kidan cooperate in the SunCruz case - including possible testimony against Abramoff - in order to get a reduced prison sentence.
"With today's plea, Mr. Kidan has acknowledged his wrongdoing and taken responsibility for his actions," said Kidan attorney Joseph Conway.
Kidan pleaded guilty to one count of conspiracy and one count of wire fraud and faces a maximum of 10 years in prison and up to $500,000 in fines at sentencing scheduled for March 1. Four other counts contained in a grand jury indictment were dismissed.
Kidan, whose left arm was in a sling as the result of a fall on ice near his New York home, spoke only in response to Huck's questions. Kidan declined to speak with reporters after the hearing, though Conway described him as "happy" with the outcome.
Abramoff and Kidan were indicted in August on charges of conspiracy, mail fraud and wire fraud for allegedly concocting a fake $23 million wire transfer to make it appear they were putting a significant portion of their own money into the $147.5 million SunCruz deal.
Lenders Foothill Capital Corp. and Citadel Equity Fund Ltd. agreed to provide $60 million in financing for the SunCruz purchase based on that false wire transfer, according to court documents.
Abramoff has claimed in court papers that Kidan was to blame for any irregularities in the deal and that he only found out about it later. For now, Abramoff remains scheduled to go to trial on Jan. 9 in Miami federal court.
"We'll have to see what impact it has, if any," said Abramoff's attorney, Neal Sonnett, regarding Kidan's plea. He declined further comment.
Kidan's guilty plea comes after another of Abramoff's former associates, Michael Scanlon, agreed to cooperate in the SunCruz case as part of a plea agreement in a separate federal case in Washington. Abramoff is being investigated in Washington for allegedly defrauding his Indian tribe clients of millions of dollars and possibly using improper influence on members of Congress.
Abramoff was a prominent Republican fundraiser and lobbyist who had close ties to former House Majority Leader Tom Delay, R-Texas, who himself faces money laundering charges in Texas. DeLay has denied any wrongdoing and is not named in the Florida case.
Kidan also is involved in the investigation of the 2001 murder of SunCruz founder Konstantinos "Gus" Boulis, who was slain in a gangland-style hit while driving his luxury car in Fort Lauderdale. The killing, about five months after Boulis sold SunCruz to Kidan and Abramoff, came during a bitter dispute over control of the company.
Police in September arrested Anthony "Big Tony" Moscatiello, 67; Anthony "Little Tony" Ferrari, 48; and James "Pudgy" Fiorillo, 28; on murder charges in Boulis' killing. Moscatiello, who worked for Kidan and allegedly has ties to New York's Gambino crime family, told police in an interview after his arrest that Kidan may have been involved, something Kidan has denied. Kidan has not been charged.
Conway said that part of the federal plea agreement requires Kidan to cooperate in any ongoing state or federal investigation. But Conway repeated that Kidan "has no knowledge of the murder of Mr. Boulis."
SunCruz, which operates gambling "cruises to nowhere" off Florida, fell into bankruptcy after Boulis was killed and has since emerged under new management.

In Messages, Lobbyist Says DeLay Pressed for Donation - New York Times

WASHINGTON, Dec. 14 - Newly disclosed e-mail messages from the lobbyist Jack Abramoff show that he told an Indian tribe client that he was being pressured by Representative Tom DeLay for a contribution for a $25,000-a-table Republican fund-raiser and that Mr. DeLay had personally phoned the lobbyist's office in search of the money.

The three-year-old messages suggest that the request was passed on to the tribe for payment within hours. They offer no evidence that Mr. DeLay, Republican of Texas, knew such a request for political money would be forwarded to Indian tribes and their gambling operations, and the messages from Mr. Abramoff's files suggest that he edited one e-mail message to exaggerate any contact with the lawmaker. Mr. DeLay's lawyer said Mr. DeLay never made the telephone call.

One e-mail message says that Mr. DeLay made an unusual personal call to Mr. Abramoff's office on July 17, 2002, to press for the contribution to the Republican fund-raiser, saying that he would call back and that he might see Mr. Abramoff that night at Signatures, a Washington restaurant that the lobbyist then owned.

Members of Congress commonly encourage lobbyists to make political contributions, and the contacts are legal so long as there is no promise of official acts in exchange for the money.

The e-mail messages, obtained by the Justice Department and Senate investigators and made available to The New York Times, are significant because they are the first evidence to demonstrate that Mr. Abramoff cited personal pressure from Mr. DeLay in trying to persuade Indian tribe clients to send political donations and other money to Washington. The government's scrutiny of ties between Mr. Abramoff and Mr. DeLay had previously focused on a series of lavish overseas trips taken by the lawmaker.

Mr. Abramoff's former lobbying partner pleaded guilty last month to conspiring with Mr. Abramoff to defraud Indian tribe clients out of millions of dollars in a conspiracy in which they also tried to corrupt members of Congress with gifts, including political donations, in exchange for official acts. Mr. Abramoff has not been charged in the case.

The newly disclosed e-mail messages are dated July 17, 2002. One was said to have been written by Mr. Abramoff's assistant, Holly Bowers, and described a phone call from Mr. DeLay "about the President's dinner contribution you owe," a reference to the 2002 President's Dinner, a major Republican fund-raiser held in June, a month before the e-mail message. "It was the Congressman himself," the message said of the call. "Needless to say, I was a bit nervous."

According to the e-mail message, which Mr. Abramoff edited and then passed along that same day to the Tigua Indian tribe of El Paso, Mr. DeLay said he would "call you again this afternoon or possibly see you at Signatures tonight."

A lawyer for Mr. DeLay, Richard Cullen, said in an interview that the lawmaker had never made such a call to Mr. Abramoff's office and that Mr. DeLay's legal team had obtained an e-mail message written later in the day by the lobbyist that showed that details in the earlier message had been falsified.

In that three-sentence e-mail message, Mr. Abramoff wrote to Ms. Bowers: "I played with your email a bit (quite a bit) to scare the Tiguas into getting me that check. I hope you don't mind. I wanted you to see this in the unlikely case that they call and mention it to you."

The later e-mail message does not make clear what Mr. Abramoff changed in Ms. Bowers's message. Mr. Cullen said he obtained the message from a source he would not identify. Mr. Cullen relayed the content of the e-mail message to The Times; its authenticity was separately confirmed by a person familiar with the e-mail messages who declined to be identified by name, citing grand jury secrecy.

Mr. Abramoff's former lobbying firm, Greenberg Traurig, declined to comment and would not allow Ms. Bowers, who now works in the firm's New York public relations office, to answer questions. Through his lawyers, Mr. Abramoff also had no comment.

A database of Indian tribal political contributions organized by PoliticalMoneyLine, a research group, shows that the Tiguas did not contribute to the 2002 President's Dinner, although another of Mr. Abramoff's clients, the Mississippi Choctaws, made a $25,000 donation to the event. News reports at the time said that Mr. DeLay and other members of the House Congressional leadership were each expected to raise at least $500,000 for the dinner.

Mr. Abramoff's voluminous e-mail traffic is at the heart of a growing Justice Department investigation into whether his lobbying team corrupted members of Congress and other public officials in seeking favors for Indian tribe clients and their gambling operations.

His former partner, Michael Scanlon, who had been Mr. DeLay's press secretary in the House, pleaded guilty to charges of conspiring to corrupt public officials and to defraud the Indian tribes, including the Tiguas, who paid the two men $4.2 million.

There was no suggestion in the plea agreement that Mr. DeLay was under scrutiny in his case, although the Justice Department had previously signaled that it was studying Mr. DeLay's ties to Mr. Abramoff, including the propriety of a lavish trip to Britain in 2000 that the lobbyist organized for the congressman and his wife. Mr. DeLay is under indictment in Texas on unrelated charges of money-laundering involving corporate political donations.

Asked why Mr. Abramoff might invoke Mr. DeLay's name in raising money without the lawmaker's knowledge or permission, Mr. Cullen said, "The e-mail speaks for itself," referring to the message in which Mr. Abramoff acknowledged rewriting Ms. Bowers's message. "I wouldn't characterize the e-mail beyond this," he said. "Tom DeLay did not make that call."

It was not the first time that Mr. Abramoff had gone to the Tiguas to raise money on behalf of lawmakers.

A similar, previously disclosed e-mail message from Mr. Abramoff's files shows that he solicited $50,000 from the Tiguas in June 2002, only weeks earlier, to pay for what he described as a golf excursion to Scotland for another Republican lawmaker, later identified by the Tiguas as Representative Bob Ney of Ohio.

Mr. Ney, who has been subpoenaed by the grand jury investigating Mr. Abramoff, had insisted that he had no knowledge that Indian tribes had been approached to pay for his trip to Britain. The Tiguas arranged for another tribe to underwrite the trip.

The e-mail traffic appears to have begun with a message from Ms. Bowers to Mr. Abramoff, who then forwarded an edited version of it to the Tiguas' spokesman, Marc Schwartz, a political consultant in El Paso.

According to the version Mr. Abramoff sent the tribe, the subject line of Ms. Bowers's e-mail message was: "Cong DeLay called for you this morning."

It continued: "I tried to reach your cell but could not get you. It was the Congressman himself, and not Maryellen or Dan. Needless to say, I was a bit nervous. Anyway, he was very nice, but said that he needs to speak with you about the President's dinner contribution you owe. I am not sure which this is, since I thought we sent in the Choctaw check already. He will try to call you again this afternoon or possibly see you at Signatures tonight. Thanks."

The "Choctaw check" appears to refer to the $25,000 contribution by the casino-rich Mississippi tribe to the organizers of the dinner, which was held on June 19, 2002, at the Washington convention center and featured a speech by President Bush. The event raised nearly $30 million. "Maryellen or Dan" appears to refer to members of Mr. DeLay's staff.

Attached to the e-mail message was a brief note from Mr. Abramoff to Mr. Schwartz: "Marc, I am about to be embarrassed. Please, please, please come back to me on the three things which are outstanding. I will call you."

In an interview, Mr. Schwartz said the e-mail message was one of several efforts by Mr. Abramoff to coerce the tribe into making political donations to Mr. DeLay and other lawmakers. He said the lobbyist frequently boasted of his close ties to Mr. DeLay, who had once publicly described Mr. Abramoff as among his "closest and dearest friends."

The e-mail message, he said, "was part of a continuing request from Mr. Abramoff for additional funds that came at various times throughout the first year that we were working for him." He would not say if the tribe sent any money to Washington in response to the July 17, 2002, e-mail message.

"I would prefer not to get into the specifics until the Justice Department has completed its investigation," Mr. Schwartz said. McCain Moves to Tighten Lobbying Laws as Abramoff Probe Spreads

Dec. 15 (Bloomberg) -- U.S. Senators John McCain and Russell Feingold, who led the drive to ban unlimited corporate and union donations to political parties, will make the first bipartisan effort in a decade to strengthen lobbying laws. Their legislation comes as a scandal threatens to ensnare some colleagues.

The lawmakers will introduce a measure as early as today that would require lobbyists to disclose through quarterly electronic reports all the contributions they make, the fund- raisers they arrange and the amount they spend on behalf of candidates and political parties, according to a person who has seen a draft. The legislation would require disclosure of all grass-roots activities and double to two years the waiting period before a lawmaker-turned-lobbyist could lobby a former colleague.

McCain, an Arizona Republican, said he was spurred to act after hearings by his Indian Affairs Committee showed that lobbyist Jack Abramoff and his partner, Michael Scanlon, had charged Indian clients more than $80 million and directed the tribes to donate money to politicians and pet projects.

``It's obvious why it's needed,'' McCain told reporters at the Capitol yesterday. ``One word: Abramoff.''

Abramoff is at the center of a Justice Department-led investigation. Scanlon, a former aide to Representative Tom DeLay, pleaded guilty on Nov. 21 to conspiring to corrupt public officials and defraud clients and agreed to cooperate in the probe. Separately, Abramoff has been indicted in Florida on wire-fraud charges while buying a casino-ship company.

Money for Lawmakers

McCain joined with Democrat Feingold in championing a 2002 law banning unlimited ``soft money'' donations to parties. This latest legislation seeks to overhaul a 1995 measure that required more lobbyists to register and provide more information about issues they were discussing and agencies they were contacting.

It may stand a good chance of passing as an election year approaches, amid revelations about Abramoff's lobbying activity. Abramoff, Scanlon and their tribal clients contributed $1.4 million to members of Congress between 2001 and 2004, a review of Federal Election Commission and Internal Revenue Service records shows. Republican Senator Conrad Burns of Montana received the most money, at least $136,500.

Representative Robert Ney, an Ohio Republican, received $54,500. His lawyer, Mark Tuohey, said last month that Ney was the unnamed ``Representative #1'' mentioned in the plea agreement that Scanlon reached with the Justice Department. The agreement charged that Ney was offered ``a stream of things of value,'' such as a 2002 trip to Scotland, and that he provided assistance in return, such as inserting statements into the Congressional Record. Ney has denied wrongdoing.

Democrats, Too

The Abramoff-linked donations spread to Democrats as well. Senator Byron Dorgan of North Dakota, the top Democrat on the Senate Indian Affairs Committee, got $67,000. Dorgan said this week he was returning the donations.

Dorgan, as a member of the Senate Appropriations Interior subcommittee, signed onto legislation in October 2003 that provided $3 million for one of Abramoff's clients, the Saginaw Chippewa Tribe of Michigan, one of the wealthiest in the country because of its casino business. Congress acted after the Interior Department rejected the tribe's grant request.

`Close Nexus'

Companies, industry leaders and other interest groups spent a record $2.14 billion to influence legislation and federal policy in 2004, $670 million more than five years earlier, according to PoliticalMoneyLine, a Washington-based company that tracks lobbying spending.

``There's a very close nexus between lobbying activity and the money officeholders need for election,'' said Craig Holman, a campaign-finance lobbyist for Public Citizen's Congress Watch, a watchdog group founded by consumer advocate Ralph Nader. ``It breeds the potential for corruption, which we've seen with Abramoff and Scanlon.''

The 26,932 registered lobbyists operating in Washington now are only required to file reports twice a year, by paper, with the Senate and House of Representatives.

The reports detail the issues they are working on and the money spent to influence Congress and federal agencies. Lobbyists are allowed to engage in practices such as arranging trips for lawmakers and their staffs, and lawmakers can negotiate for lobbying jobs while still in office.

Earlier Proposal

McCain, who declined to discuss what he will be proposing, is the first Republican to sponsor lobbying legislation. Two Democrats, Feingold of Wisconsin and Representative Martin Meehan of Massachusetts, introduced legislation earlier this year to require lobbyists to disclose anyone they contact on behalf of clients and to extend the waiting period before lawmakers-turned-lobbyists can be in touch with their former colleagues.

The Democratic proposals also would prevent lobbyists from organizing trips for lawmakers and increase requirements for disclosure.

Feingold spokesman Zach Lowe did not return a call seeking comment on the new legislation.

Herbert Alexander, professor emeritus of political science at the University of Southern California in Los Angeles, said next year's congressional elections will put pressure on Congress to pass lobbying legislation. ``Given the extent to which there have been scandals relating to lobbying, I think it has a fairly good chance of passage,'' Alexander said.


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