The Raw Story | Firm knew Abramoff was paid by ex-DeLay aide before scandal broke, associates say

01/02/2006 @ 12:35 pm
Filed by John Byrne


Officials at the lawfirm that employed indicted conservative lobbyist Jack Abramoff may have misled in public statements when speaking about what they knew about his role in a massive lobbying scandal and when they knew it, former Abramoff associates say.

Greenberg Traurig’s Connecticut Avenue offices in Washington provided the stables for a coterie of aggressive lobbyists who wooed members of Congress with lavish donations, skybox suites and Scottish golfing jaunts. The firm said they first learned of Abramoff’s misadventures when they appeared in the pages of The Washington Post.

Those familiar with the sequence of events say this is false. They maintain the company’s top executives learned of Abramoff’s financial relationship with Rep. Tom DeLay’s (R-TX) former aide Michael Scanlon when they represented Abramoff in a bankruptcy trial.

Greenberg Traurig attorneys took up Abramoff’s defense when he was sued by lenders after a fleet of riverboat casinos he purchased went bankrupt. As part of the SunCruz casino bankruptcy suit, lawyers at the firm obtained copies of Abramoff’s tax returns, former associates tell RAW STORY. They say the returns showed he had received tens of millions of dollars from Scanlon—money investigators later said had been bilked from Indian tribes.

The firm took no public action. On Feb. 22, 2005, the Washington Post reported that Abramoff and Scanlon had received at least $45 million from Indian tribes.

Five days later, a Greenberg Traurig statement asserted Abramoff had resigned after he "disclosed to the firm for the first time personal transactions and related conduct which are unacceptable to the firm.”

Jill Perry, a spokeswoman for Greenberg Traurig, did not return a phone call or email seeking comment. Andrew Blum, Abramoff’s spokesman, and Stephen Braga, Scanlon’s attorney, did not return requests for comment Monday.

Abramoff was indicted for wire fraud and conspiracy in connection with his purchase of the riverboat casinos in August 2005. He is expected to reach a plea agreement this week to testify against members of Congress and their staff relating to legislative favors he got in exchange for campaign donations and other gifts. Scanlon pled guilty in November and is cooperating with prosecutors.

One former associate said the firm knew long in advance that Abramoff had received large sums of money from Scanlon.

The individual doesn’t believe the firm knew the payments might be considered evidence of wrongdoing, and added that many individuals working at Greenberg held outside business interests. Moreover, it is not known whether Greenberg executives knew that the money was related to Abramoff's tribal lobbying work.

“It was common knowledge that shareholders in the firm had outside business interests,” the former Abramoff associate said.

A second former associate questioned whether the firm would have taken action against Abramoff had the story not made it into the Post. The Post reported this weekend that Scanlon met with Greenberg lawyers two months before Abramoff resigned.

Scanlon paid as consultant, report says

Those critical of the firm’s handling of the scandal also revealed that Scanlon was paid as a Greenberg consultant in 2001. They allege that firm had a tendency to defer to Abramoff, and that the firm sometimes relaxed screening of new employees in his favor.

An internal report, read to RAW STORY, is said to state the firm paid Scanlon for 721.8 hours in the first half of 2001 billed at a rate of $250 an hour. The report also stated that Scanlon billed 98 percent of those hours, and collected 92 percent of the hours billed. This would mean the firm collected roughly $166,000—though it leaves unclear how much Scanlon was actually paid.

Former associates question whether Greenberg officials are being candid when they say executives were “shocked” to discover Abramoff’s alleged illicit deeds. One former colleague said the firm has a history of “throwing the guy to the wolves and saying we’re not responsible.”

Abramoff hired in strategy to increase receipts

Before he was a pariah, Abramoff was Greenberg Traurig’s poster boy.

Upon his enlistment in 2001, Greenberg’s government affairs chairman said he planned to double the firm’s lobbying receipts, seeking to bring lobbying revenues to more than $9 million. A lawyer familiar with the firm told the trade magazine Influence at the time that Greenberg’s culture sought out aggressive talent.

"It’s a very entrepreneurial place," one lawyer familiar with the firm told Influence. "They do not have their noses in the air, so to speak. They don’t say ‘We don’t like this client’ or ‘We’re afraid of the image it may create.’"

With Abramoff, Greenberg Traurig did even better than they had hoped. The firm’s lobbying receipts leapt fourfold, from $3 million in 2000, to $16 million in 2001. At the peak in 2003, the firm grossed $26 million on lobbying alone.

The scandal hounding Abramoff isn’t the first the firm has faced. In 1998, the Federal Election Commission levied a $77,000 fine against Greenberg for knowingly soliciting illegal contributions from a foreign national. The fine given the German developer in the case, $323,000, was the largest of its kind ever assessed by the FEC.

Abramoff is currently under investigation by the Justice Department, the Internal Revenue Service and the Senate Indian Affairs Committee. In an earlier statement, Greenberg’s director of marketing and public affairs Jill Perry said his style was “antithetical” to the firm’s practices.

"Greenberg Traurig accepted Jack Abramoff's resignation from the firm, effective March 2, 2004, after Mr. Abramoff disclosed to the firm personal transactions and related conduct which are unacceptable to the firm and antithetical to the way we do business,” Perry asserted. “In addition, conduct and comments by Mr. Abramoff which have come to light since he left Greenberg Traurig are contrary to our firm's values and culture.”

“We are conducting a comprehensive internal investigation of these matters and are cooperating with all government investigations," she added. Pressed for more, Perry said the firm was constrained from commenting because of ongoing investigations.