CNN.com - Sources: Two lawmakers could face charges in Abramoff probe - Jan 11, 2006

Rep. Ney among a half dozen who could face charges
From Kelli Arena and Kevin Bohn
CNN Washington Bureau


WASHINGTON (CNN) -- Up to a half dozen people, including two members of Congress, could face charges after high-powered lobbyist Jack Abramoff's plea deal with the Justice Department, sources with knowledge of the investigation tell CNN.

Abramoff has been cooperating with Justice Department prosecutors and FBI agents for several months in their investigation of his dealings, including his allegations of exchanging gifts for political favors.

Authorities have focused on about 20 people who possibly committed wrongful acts, government sources have previously told CNN. The number is a moving target as new information comes in.

Sources with knowledge of the investigation say at least two members of Congress are under scrutiny as part of the ongoing investigation. One is Rep. Bob Ney, R-Ohio, who sources say was the person identified in Abramoff's plea agreement as the official who took action for Abramoff after receiving from him such things as a golf trip to Scotland.

Ney has steadfastly denied wrongdoing, has pledged to cooperate with the investigation and has said he is confident he will be cleared.

The sources would not identify the other member, and they told CNN that no charges appear imminent.

DeLay staffers under scrutiny
Also under scrutiny, the sources say, are some current and former congressional staffers, including at least two people who used to work for then-House Majority Leader Rep. Tom DeLay. DeLay, R-Texas, and Abramoff had a long working relationship.

Investigators are also examining the activities of some officials at the Interior Department and the General Services Administration, sources tell CNN. One former GSA official, David Safavian, was indicted in October on charges of obstructing a GSA proceeding, obstructing a U.S. Senate proceeding and making false statements in connection with the investigation.

Abramoff pleaded guilty to conspiracy, fraud and tax evasion charges January 3 and agreed to cooperate with federal prosecutors. About 30 to 40 FBI agents and other staff are working full-time on this investigation, which officials have said is a high priority for the government. (Full Story)

Legal experts have said while there may be some evidence of ethical violations, it is very hard to prosecute government officials for acting on a bribe, because it is standard operating procedure for lobbyists to do favors for those in

Blunt, DeLay Share Abramoff Connections - Yahoo! News

By LARRY MARGASAK, Associated Press Writer


Rep. Roy Blunt (news, bio, voting record) and the man he wants to succeed as House majority leader, Tom DeLay, shared similar connections to convicted lobbyist Jack Abramoff and to corporate lobbyists.

Blunt, R-Mo., wrote at least three letters helpful to Abramoff clients while collecting money from them. He swapped donations between his and DeLay's political groups, ultimately enriching the Missouri political campaign of his son Matt.

And Blunt's wife and another son, Andrew, lobby for many of the same companies that donate to the lawmaker's political efforts.

With House Republicans worried about a budding corruption scandal tied to Abramoff's favors to lawmakers, DeLay, R-Texas, announced Saturday he would not try to regain his majority leader's post in upcoming party elections.

DeLay was forced to step down last year under party rules, after he was charged with Texas felonies in a state money laundering investigation. Blunt has temporarily filled the position and now is competing to be DeLay's permanent replacement.

Blunt's own connections to Abramoff or his clients could complicate GOP plans to distance its leadership from the corruption investigation before the fall elections for control of Congress.

Abramoff pleaded guilty last week to felony charges and is cooperating with investigators whose bribery probe is now focusing on several members of Congress and their aides. As the Abramoff investigation has developed, many lawmakers have said they will donate to charity campaign contributions related to the disgraced lobbyist.

The board of Blunt's Rely On Your Beliefs Fund has voted to contribute to charity an amount equivalent to Abramoff's personal contributions, $8,500, according to Blunt spokeswoman Burson Taylor.

Blunt and DeLay and their aides frequently met with Abramoff's lobbying team and even jointly signed a letter supportive of an Indian tribe client at the heart of the Abramoff criminal investigation, according to records published by The Associated Press over the past year.

Blunt's office says all of his dealings were proper.

"Mr. Blunt has never been accused of engaging in any legislative activities on Jack Abramoff's behalf," Taylor said.

Blunt's main competitor for the House majority leader's post is Rep. John Boehner (news, bio, voting record), R-Ohio, chairman of the House committee that oversees education and labor.

Boehner in 1996 admitted he distributed a tobacco political action committee's campaign checks on the House floor, but said at the time he would never do it again. He served in the House leadership in the 1990s, but lost his post after the party suffered losses in the 1998 elections.

Thomas Mann, who studies congressional issues for the Brookings Institution think tank, said Republican leaders' hardball tactics in getting legislation passed and their alliances with special interests during a decade of congressional rule are now being scrutinized by voters.

"It's been smash-mouth politics," Mann said in an interview. "They've been tough and effective in enacting their polices and they're paying a price right now for it."

Larry Sabato, a University of Virginia political scientist and author, said Blunt's name doesn't have the same nationwide recognition as other GOP leaders, and one way he could shed any ethical questions would be to support lobbying reforms.

Blunt, in a written statement, pledged to do just that.

He said that if elected leader, he would "move swiftly to enact new lobbying reforms and enhanced penalties for those who break the public trust."

Texas prosecutors recently subpoenaed records of a series of financial transactions in 2000 between DeLay and Blunt that were highlighted in a recent AP story.

DeLay raised more money than he needed to throw parties at the 2000 Republican National Convention and sent some of the excess to Blunt through a series of donations that benefited the causes of both men.

After transfers between political organizations, some of the money went to the campaign of Blunt's son, Matt, in his successful 2000 campaign for secretary of state. Now the Republican governor of Missouri, Matt Blunt eventually received more than $160,000 in 2000.

Taylor, the Blunt spokeswoman, denied that DeLay raised excess money for the purpose of transferring it to Blunt. Rather, she said, the convention fundraising was a joint effort between DeLay and Blunt all along.

She said Blunt's Rely On Your Beliefs Fund contributes annually to the Missouri Republican Party, but doesn't specify how the money should be spent.

"It stands to reason that the party committee would contribute to a Republican candidate for statewide office, in this case, Matt Blunt," Taylor said.

Both DeLay and Blunt forged strong connections with corporate lobbyists, raising questions of whether the lobbyists influenced legislation in return for their contributions. DeLay was admonished in 2004 by the House ethics committee for creating the appearance of connecting energy industry donations with legislation.

Blunt's wife, Abigail Perlman, is a lobbyist for Kraft Foods, part of Altria, the company that also includes Philip Morris. The parent firm and its companies have contributed nearly $224,000 to Blunt's political organizations since 2001, according to figures compiled by a campaign finance tracking firm, Political MoneyLine.

Blunt's supporters also included companies that have been clients of another of Blunt's sons, Andrew. He lobbies the Missouri legislature.

"He and Mr. Blunt have no contact on legislative issues," Taylor said of the father-son relationship.

She added, "Mrs. Blunt does not lobby the House of Representatives, and Mr. Blunt would recuse himself from voting or working on any issue that would impact Altria specifically."

Shortly after Blunt became the party whip in 2002, he tried to quietly insert a provision benefiting Philip Morris USA into the bill creating the Homeland Security Department.

Taylor said the provision would have cracked down on the illegal sale of contraband cigarettes, a documented source of funding for terrorist organizations. Bipartisan legislation to achieve the same result has passed as part of the USA Patriot Act, she said.

In his ties to Abramoff, Blunt was among nearly three dozen members of Congress, including leaders from both parties, who pressed the government to block a Louisiana Indian tribe from opening a casino. The lawmakers received donations from rival tribes and their lobbyist, Abramoff, around the same time.

Blunt received a $1,000 donation from Abramoff and $2,000 from his lobbying firm around the time of a May 2003 letter he wrote to Interior Secretary Gale Norton on the casino matter. A month later he signed another letter on the issue along with DeLay and House Speaker Dennis Hastert, R-Ill.

Taylor responded that Blunt "has a long history of opposition to Indian gaming. His district, which includes Branson, Missouri, is fundamentally opposed to the expansion of gaming, and he reflects that broad opinion."

She said Blunt signed the letters to Norton at the request of Rep. Jim McCrery (news, bio, voting record), R-La., not Abramoff.

"It is also very important to note that Mr. Blunt does not accept campaign contributions from Indian gaming interests, so any 'quid pro quo' argument is baseless here," Taylor added.

In spring 2000, an Abramoff client accused of running a sweatshop garment factory in the Northern Mariana Islands donated $3,000 to Blunt's political organization. The company, Concorde Garment Manufacturing, paid a $9 million penalty to the U.S. government in the 1990s for failing to pay workers overtime. The company was visited by DeLay.

Bloomberg.com: U.S. | Abramoff Scandal Threatens to Derail Reed's Political Ambitions

Jan. 11 (Bloomberg) -- The Washington scandal over lobbyist Jack Abramoff may claim a casualty outside the nation's capital: Ralph Reed, a former presidential-campaign adviser who once headed one of the U.S.'s largest Christian activist groups.

Disclosures that Reed once ran an anti-gambling campaign that was secretly financed by casino-owning clients of his friend Abramoff have damaged his ability to raise funds for a bid to become Georgia's next lieutenant governor, other Republicans say. That may undercut his chances of winning an office that he could use as a steppingstone to national political ambitions, they say.

Campaign-finance reports filed this week show that Reed, 44, lagged behind opponent Casey Cagle in fundraising for the July 18 Republican primary during the past six months, after collecting more than twice as much money as his rival before that. Cagle raised $667,000 from June 30 to Dec. 31 to Reed's $404,000.

``A lot of those big corporate donors are now hedging their bets,'' said Matt Towery, the 1990 Republican candidate for lieutenant governor, who was once a colleague of Reed's on Capitol Hill. ``Ralph faces a very difficult and now problematic candidacy.''

An Atlanta Journal-Constitution poll last month showed Cagle and Reed would perform about equally well against the Democrats in the November election. The poll was conducted by Zogby International before Abramoff pleaded guilty to fraud and conspiring to corrupt public officials.

For Reed, who once seemed invincible, with broad support in his party and wide name recognition, that isn't good news, said Towery, who now publishes Insider Advantage, a guide to politics.

Up the Ranks

Reed, who is making his first run for public office, climbed through the political ranks because of his connections in Christian and Republican circles. From 1989 to 1997, he ran the Christian Coalition of America, a then-powerful group founded by evangelist Pat Robertson. Reed served as a consultant to George W. Bush's 2000 presidential campaign and oversaw the Southeast region for his 2004 re-election.

Reed's fund-raising slowdown in the past six months coincided with the drumbeat of news about Abramoff and Reed's connections to him. Those ties are gaining more attention in the aftermath of Abramoff's Jan. 3 guilty plea and the widening probe into the potential bribery of lawmakers.

``There are concerns as to whether Ralph will continue to make headlines that are harmful to the party,'' said Eric Johnson, who as the Georgia Senate's president pro tem is a top Republican. Johnson said he's staying neutral in the primary election.

`Significant Doubts'

The Cagle campaign is playing off those concerns. ``The polling data we've seen as well as fund raising show how people in Georgia have significant doubts about whether they can trust Ralph,'' Cagle spokesman Brad Alexander said.

Reed is still ahead of Cagle, 39, in overall fundraising, having collected a total of $1.8 million to Cagle's $1.3 million.

``We raised more from more donors on our first report than our primary opponent has raised in two reports,'' Reed spokeswoman Lisa Baron said. ``It is not uncommon for second reports after such a strong first report to reflect the obvious, which is many donors have already contributed the maximum.''

Reed declined to comment for this article.

Tarnished Image

Reed's image as someone more interested in Christian causes than his own financial well-being has been tarnished by a stream of e-mails released by a Senate committee that investigated Abramoff's bilking of Indian-tribe clients.

``I need to start humping in corporate accounts,'' Reed wrote to Abramoff in 1998. ``I'm counting on you to help me with some contacts.''

In 2001 alone, he received more than $2.5 million from entities connected with Abramoff and partner Michael Scanlon, according to documents released by the Senate Indian Affairs Committee.

Abramoff and Scanlon used the organizations so Reed wouldn't be paid directly by their clients, who wanted to block new gambling competition. The e-mails show that Reed knew casino-owning tribes were the ultimate clients, though he says he wasn't paid with gambling proceeds.

``Had I known then what I know now, I would not have undertaken that work,'' Reed said in the text of a Dec. 9 speech to a Georgia youth group. ``On reflection and with the benefit of hindsight, it is clear it associated my longstanding opposition to gambling with those who did not share it and has caused difficulty for the faith community with whom I worked.''

Connections

Reed and Abramoff have known each other since the early 1980s, when they were leaders of the College Republicans along with another now-powerful Washington player, anti-tax activist Grover Norquist. They made an odd trio: Abramoff, an orthodox Jew who went to high school in Beverly Hills, California; Reed, a Christian southerner with boyish looks; and Norquist, a Massachusetts native with a penchant for dramatic monologues in his tax-cut crusade.

The three continued to work together until word broke that Abramoff may have defrauded his tribal clients. One, the Mississippi Band of Choctaw Indians, in 1999 donated money to Norquist's Americans for Tax Reform, which then wrote checks to Reed's anti-gambling coalition.

Cayman Islands

Reed also depended on Abramoff to help his political campaigns. In one e-mail exchange in 2001, he asked Abramoff to contribute to his successful bid to become state Republican chairman in Georgia. When Abramoff asked where to send the donation, Reed joked, ``The actual committee is `The Reed Family Retirement and Educational Foundation.' The address is 200 Bay Drive, Grand Cayman, BCI, R59876.''

Before the Abramoff scandal, Reed was the best known of the three because of his work for the Christian Coalition. By 1984, he had helped to re-elect Senator Jesse Helms in North Carolina by organizing a Christian conservative constituency that later became the foundation for Robertson's 1988 presidential bid.

The young Republicans following in Reed's footsteps -- students, budding activists and campaign managers -- now don't want him to run, said Charles Bullock, a political scientist at the University of Georgia in Athens.

``Without exception, they are hoping he's not on the ticket,'' Bullock said. One concern is ``that he gets the nomination, and then sometime in the fall the smoking gun shows up and he brings down Republicans,'' he said. ``The drumbeat is going to be playing throughout the year.''



To contact the reporters on this story:
Kristin Jensen in Washington kjensen@bloomberg.net;
Laurence Viele Davidson in Atlanta at lviele@bloomberg.net

Lobbying Colors GOP Contest

Rivals for DeLay Post No Strangers to K St.

By Jonathan Weisman
Washington Post Staff Writer
Wednesday, January 11, 2006; A01



In years past, when the House has recessed for its winter break, Rep. John A. Boehner (R-Ohio) has decamped for warmer climates and a sailing trip to the Caribbean with some of the city's top lobbyists, including Henry Gandy of the well-connected Duberstein Group and Timothy McKone of SBC Communications.

Over the summer, they discussed a trip for this year as well, Boehner said yesterday, but last week the lobbyists weighed anchor without him, content to communicate by telephone while the chairman of the House Education and the Workforce Committee rushed to Washington for a high-stakes run to succeed Rep. Tom DeLay (R-Tex.) as House majority leader.

The annual vacation, dubbed a "boys' trip" by detractors, points to an issue underlying the current House leadership race: Both Boehner and his rival for majority leader, Rep. Roy Blunt (R-Mo.), have extensive ties to the same K Street lobbying world that stained DeLay's reputation and spawned the Abramoff corruption scandal.

"Do I have K Street friends? Yes, I do," Boehner said. "Do I have relationships with them? Yes. And every one of them is an ethical relationship."

In another year, that answer might have sufficed, given how many lawmakers maintain such cordial ties. But with all of Congress anxiously awaiting the testimony of disgraced lobbyist Jack Abramoff and his partner, former DeLay aide Michael Scanlon, the atmosphere has changed.

The concern over lobbying "is palpable," said Rep. Mike Rogers (R-Mich.), a candidate for the House GOP's number three spot of majority whip who yesterday unveiled a broad proposal to change congressional lobbying rules. "This has become a matter of public trust."

Both camps this week have been pointing to the other's well-documented connections and activities, some of which are the stuff of legends. They include Blunt's failed effort to insert a provision benefiting Philip Morris USA into the massive bill creating the Department of Homeland Security and Boehner's distribution of checks from tobacco concerns in 1995 to lawmakers on the House floor. Also of note are both men's prodigious fundraising activities, some of which involve individuals and clients with ties to Abramoff.

Lobbying activity has become "one of the defining issues in the race so far," conceded Blunt spokeswoman Burson Taylor.

Some members, such as Rep. Jeff Flake (R-Ariz.), have said the two candidates' ties to K Street are so extensive that the race still could draw in a third candidate, such as Rep. John Shadegg (R-Ariz.) or House Ways and Means Chairman Bill Thomas (R-Calif.). Even some of the candidates' supporters concede victory could hinge on which man can show he can move away from his past.

"It's a concern to both me personally and the [Republican] conference," said Rep. Thaddeus McCotter (R-Mich.), who is supporting Boehner. "Ties to lobbyists have been around since Teapot Dome and the Gilded Age. The question is, the Abramoff stuff specifically were never considerations when we voted on the current leadership team. We have to have a broad reassessment now."

"We will want people who are clean running the House," said Rep. Melissa Hart (R-Pa.), a Boehner supporter.

The stories are numerous. Just hours after Blunt was named to the House's third-highest leadership job in 2002, he unsuccessfully tried to insert a measure benefiting Philip Morris into the 475-page bill creating the Department of Homeland Security. Blunt's ties to the company are thick: He was very close to a company lobbyist, Abigail Perlman, at the time, and married her in 2003. She does not lobby Congress. One of his sons, Andrew B. Blunt, lobbies the Missouri legislature for Philip Morris.

Blunt has intervened in legislation on behalf of United Parcel Service of America Inc. and Federal Express Corp. Andrew Blunt represented UPS in Missouri at the time. And the senior Blunt brokered a deal with Rep. Ernie Fletcher (R-Ky.) to fight for a vote on legislation that could open the door to Food and Drug Administration regulation of tobacco, a top priority of Philip Morris, because it is far ahead of rivals in designing products likely to gain FDA support.

Boehner's most famous act of the sort also involved the tobacco industry: In 1995, he distributed checks from tobacco political action committees to members on the House floor.

And both men have established a web of lobbying connections that touch Abramoff's fundraising and lobbying machine. Blunt, who modeled his political career on DeLay's, has extensive ties to the Washington lobbying firm Alexander Strategy Group, which announced this week it has been so hobbled by its association with Abramoff that it is closing. Blunt, whose name appears as a "Friend of Owner" on a list Abramoff maintained of lawmakers who could dine at his restaurant for free, announced this month that he would donate $8,500 to charity that Abramoff and his wife had donated to his political action committee.

Boehner's political action committee has received $31,500 from Indian tribes represented by Abramoff, money Boehner strenuously maintains should in no way be connected to the lobbyist.

"I've never taken an Abramoff dollar," he said.

Spokesman Don Seymour added that Boehner "doesn't think Native American tribal groups should be dishonored simply for exercising their own political freedom."

And like Blunt, Boehner has been known to accept the largess of companies with ties to his legislative agenda. The Plain Dealer newspaper in Cleveland reported that in 2004, a lobbyist for student loan giant Sallie Mae, one of the biggest companies affected by the Education Committee, hosted a fundraising dinner for his leadership PAC, where a majority of the company's top executives wrote checks for the event.

Indeed, since 1999, Sallie Mae executives have contributed at least $123,470 to the PAC, called the Freedom Project, Federal Election Commission reports show.

Gandy and another sometime sailing partner, Bruce Gates of Washington Council Ernst and Young, also sponsor what have become known as Boehner warehouse parties, lavish, expensive fundraising affairs that started at the 1996 Republican National Convention and can last until dawn.

Both Blunt and Boehner have tried hard to shore up their images in the wake of such stories.

"One of the points that Congressman Blunt has proactively been making in conversations with colleagues and made in his formal Dear Colleague letter is the need for lobbying reform," Taylor said. "He's pledging to move swiftly after Congress returns."

Boehner has highlighted his actions in the early 1990s to clean up the House's internal bank, post office and restaurant system, and he, too, wants change to lobbying rules, especially more disclosure of lobbying contacts with lawmakers.

"Nobody knows more about reforming this place than I do," he said.