McCain Seeks Files in Abramoff Probe

Posted March 3, 2004 at 6:29pm

In the wake of Jack Abramoff’s ouster from Greenberg Traurig, Sen. John McCain (R-Ariz.) has asked the firm to preserve all of its files related to the work of its former multimillion-dollar lobbyist as part of the Senator’s burgeoning investigation into Abramoff and his work for American Indian tribes.

To preserve the integrity of the committee’s probe and the firm’s files, McCain said he “wrote a letter and asked them to keep all their relevant files.”

Abramoff, one of President Bush’s most prodigious fundraisers and a top ally of House Majority Leader Tom DeLay (R-Texas), resigned Tuesday under pressure from Greenberg Traurig and immediately began laying the groundwork for a vigorous defense. He is seeking a meeting with McCain and other lawmakers to justify the multimillion-dollar fees that he charges American Indian tribes to represent them in Washington.

With the help of a crisis communications expert who has represented Michael Milken and former Rep. Gary Condit (D-Calif.), Abramoff struck back at his former firm’s characterization of his departure, which Greenberg Traurig said was prompted by Abramoff’s revelations of “personal transactions and related conduct which are unacceptable to the firm.”

To help with his defense, Abramoff his hired Ein Communications, a public relations firm that once represented Milken and several people involved in the campaign finance investigation during the Clinton administration. The firm briefly represented Condit during the scandal surrounding slain intern Chandra Levy. The firm is headed by Marina Ein.

Abramoff took issue with his former firm, saying that he resigned because press reports on his pricey lobbying contracts with the tribes had “distracted from my efforts on behalf of my clients, whose interests are now, and have always been, my number one priority.”

McCain, through his senior position on the Indian Affairs Committee, is investigating why Abramoff and a former DeLay communications director charged American Indian tribes at least $45 million for lobbying and PR work — questioning whether tribal money was spent on unnecessary government relations at the expense of basic education and health services.

“From what we’ve seen, I’m not surprised,” McCain said Wednesday of Abramoff’s resignation. The Washington Post has reported that FBI agents have talked to members of at least one of the tribes, the Saginaw Chippewas of Michigan.

In a sign of how serious Greenberg Traurig is taking the matter, the firm announced it has hired one of the District’s top white-collar criminal defense lawyers to “conduct a comprehensive investigation of these matters so the firm can take any additional action that may be appropriate.”

Henry Schuelke III of Janis, Schuelke and Wechsler has been retained, bringing his expertise on financial criminal matters. Schuelke has defended a former treasurer for Enron Corp. and has worked two stints in the Senate, once in the early 1980s on the Foreign Relations Committee and from 1989 to 1991 on the Ethics Committee — which looked into the Keating Five matter. McCain was one of the five Senators investigated in that probe.

Greenberg Traurig, in a statement issued by Richard Rosenbaum, one of its top officers, would not comment on what personal deals led to Abramoff’s exodus, and said the firm would reserve all comment until Schuelke’s internal probe is concluded.

In addition to the probes of his lobbying contracts, Abramoff has been in a legal dispute in Florida regarding one of his former lobbying clients, the SunCruz Casino, which he represented briefly in 2001 when he worked at Preston Gates Ellis. Abramoff tried to be a partner in a $147 million purchase of the casino, but a federal magistrate ruled his $23 million down payment was never actually made.

The Indian Affairs probe is focusing, for now, on Abramoff’s contracts for lobbying with the tribes, as well those of Mike Scanlon, who now owns a PR and grassroots firm and a realty company in Rehoboth Beach, Del.

While Abramoff has become one of the highest paid lobbyists in town — helping take a relatively small lobbying shop at Greenberg and turn it into a top-five firm in terms of revenue — a huge chunk of that money was based solely on his connections to tribes.

In the first half of 2003, when Greenberg Traurig brought in $13.8 million in lobbying, clients of Abramoff’s accounted for $5.5 million of that sum. However, seven of those clients were tribes, which produced $4.1 million of that lobbying revenue, according to an analysis of disclosure reports.

A pair of his tribe clients, the Agua Caliente Band of Cahuilla Indians of California and the Chippewa, pay $180,000 a month. The Coushatta Tribe of Louisiana pays about $125,000 a month. The Mississippi Band of Choctaw Indians pays $150,000 a month.

Some members of those tribes have used their positions to question, if not cancel, the contracts. Audrey Falcon, tribal chief of the Chippewas, sent McCain a letter Friday saying he was committed to working with McCain to “fully investigate these matters.”

David Sickey, a new member of the Coushatta tribal council, is leading the effort to cancel its contract, contending that he has no idea what services Abramoff has provided that are worth his contract. “They don’t even provide an itemization of services rendered, just a bill,” he said Wednesday.

An internal audit by the tribe revealed that not only was it giving money to Abramoff and Scanlon, but also to a group connected to the two men, American International Center. The tribe gave $566,000 to the center, a think tank that opened in 2001 and closed in 2002.

The AIC was located at one of Scanlon’s beach properties and run by a pair of his old friends, according to the Post. One of the center’s biggest expenditures appears to have been hiring Abramoff as a lobbyist, paying him $1.6 million.

Abramoff has collected just under $15 million in lobbying revenue from four tribes in the past three years, during which time Scanlon has collected more than $31 million in his contracts with the same tribes Abramoff represents.

However, one of Sickey’s fellow council members, William Worfel, sent McCain a letter defending Abramoff and Scanlon, calling his probe an “attack on tribal sovereignty.”

In his statement attacking his former firm, Abramoff said that he had hoped he “would have elicited more professional treatment.”

“In time, I hope the firm will understand that a lobbying practice in Washington is different from other areas in the practice of law and how a firm and its clients have to be prepared to take and respond to political attacks and unpopular positions without overreacting.”