ABC News: Tyco Acknowledges $1.6M Link to Abramoff

Tyco Acknowledges It Was Source of $1.6 Million Pocketed by Lobbyist Jack Abramoff
By SHARON THEIMER
The Associated Press
WASHINGTON - Tyco International, whose former CEO became a symbol of corporate corruption, acknowledged Thursday it is the Jack Abramoff client referred to as "Company A" in court documents describing the lobbyist's scheme to funnel millions of dollars in lobbying fees to himself.

Tyco hired Abramoff in 2003 to lobby for it on a tax issue, said company spokeswoman Sheri Woodruff. She declined to comment further on the New Jersey-based company's relationship with Abramoff or on the lobbyist's activities.

Abramoff pleaded guilty this week in Washington to mail fraud, conspiracy and tax evasion in connection with his lobbying activities and in Miami to conspiracy and wire fraud in a 2000 business deal in which he and a partner purchased the SunCruz Casinos fleet of gambling boats.

Abramoff also agreed to cooperate with federal prosecutors trying to find out whether Abramoff bought specific actions from members of Congress, their aides or members of the Bush administration by doling out large campaign contributions and gifts such as meals at his restaurant, use of his skybox and trips abroad. Investigators are examining Abramoff's ties to former House Majority Leader Tom DeLay, R-Texas, and House Administration Committee Chairman Bob Ney, R-Ohio, among other lawmakers.

In court documents released Tuesday as part of Abramoff's guilty plea, prosecutors described some of Abramoff's activities, including his alleged use of a side business to fraudulently funnel millions of dollars from lobbying clients to himself.

Abramoff, then employed by the Washington firm Greenberg Traurig, solicited Tyco as a Greenberg Traurig client for lobbying on a tax issue in May 2003, according to the court documents, which refer to Tyco only as "Company A," a manufacturing and services company.

Prosecutors say Abramoff recommended that the company hire both him and a public relations and campaign consulting firm called GrassRoots Interactive, but hid from Tyco that GrassRoots Interactive was his business.

"Additionally, Abramoff represented to Company A that he was negotiating on their behalf with GRI to try to save Company A money, when in fact he was simply setting a high price on services that he controlled and from which he would profit," the court documents say.

Tyco hired Abramoff and GrassRoots Interactive. In May and June 2003, Tyco paid GrassRoots Interactive, directly and through Greenberg Traurig's bank account, about $1.8 million, of which about $1.6 million went to Abramoff and entities he controlled, prosecutors say.

Unlike some of the Indian tribes Abramoff acknowledged defrauding, Tyco was not a newcomer to Washington politics.

Tyco has been a client of several lobbying firms over the years, including that of former Senate Majority Leader Bob Dole, R-Kan. The company also has been involved in campaign politics, giving several five-figure checks to national Republican and Democratic party committees when they were still allowed to accept corporate donations, a practice banned after the 2002 elections.

More recently, Tyco found itself in the middle of federal investigations into corporate corruption. Last year, Tyco's former chief executive, L. Dennis Kozlowski, and chief financial officer, Mark H. Swartz, were sentenced to prison for grand larceny, conspiracy, securities fraud and falsifying business records. They are accused of conspiring to defraud Tyco of millions of dollars to fund lavish lifestyles. Both are appealing their convictions.

In October, Tyco attorney Timothy E. Flanigan withdrew his nomination to be President Bush's deputy attorney general. Flanigan's confirmation was delayed due to questions about his dealings with Abramoff when Abramoff was a Tyco lobbyist.


On the Net:

Tyco International Ltd.: http://www.tyco.com

Documents: http://www.usdoj.gov/criminal/press room/press releases/2006 index.html 1