Abramoff Pleads the Fifth

Posted September 29, 2004 at 6:42pm

With calls for a contempt of Congress citation for one no-show at its long-awaited hearing, the Senate Indian Affairs Committee castigated former lobbyist Jack Abramoff for the “absolute contempt” he exhibited toward at least six tribal clients who paid him and a partner more than $80 million.

Unlike his public relations ally, Mike Scanlon, who refused to testify, Abramoff appeared before the panel but refused to answer questions, citing constitutional privileges against self-incrimination. Abramoff — once considered one of the most powerful unelected players in Washington, a close ally of House Majority Leader Tom DeLay (R-Texas) and a top fundraiser for President Bush — sat quietly for about 20 minutes listening to a half-dozen Senators berate him for the web of financial operations that brought him tens of millions of dollars more than previously revealed.

The Senators repeatedly bashed him for insensitive comments about American Indians in numerous e-mails, which were unearthed during a six-month investigation, some of which referred to his Indian clients as “monkeys,” “losers” and “f’ing troglodytes”.

“It’s a story of greed run amok,” said Indian Affairs Chairman Ben Nighthorse Campbell (R-Colo.), adding that Scanlon and Abramoff “held their tribal clients in absolute contempt.”

Scanlon also drew the committee’s ire for not appearing, as Campbell and Sen. John McCain (R-Ariz.) accused him of attempting to avoid being served a subpoena to testify.

Campbell vowed to haul Scanlon before the committee under the force of law. “Sooner or later he will come in, of his own volition or he will be escorted in,” Campbell said.

McCain, likely to become chairman of the panel next year, said he plans to talk later this week with Campbell and Sen. Daniel Inouye (Hawaii), the panel’s ranking Democrat, to begin proceedings to place Scanlon in contempt of Congress. “Clearly you don’t have any choice if he refuses to show up,” McCain said in an interview after the hearing.

Braga told the committee in a letter late last week that the subpoena wasn’t properly served. Also citing constitutional privileges and an ongoing federal probe, Braga said Scanlon would only appear before the panel but decline to answer any questions.

McCain said that he hopes the panel’s next hearing on the issue will occur during the likely lame-duck session after the Nov. 2 elections. McCain said he saw no reason to hear testimony from Ralph Reed, the conservative activist and Bush adviser who received more than $4 million for sub-contracted grassroots work from Scanlon.

To bring contempt charges, the full Senate would have to approve and then a federal judge would likely oversee enforcing the matter.

The hearing was the most public manifestation of three separate probes currently underway into Abramoff and Scanlon’s work for Indian tribes. A federal grand jury is also examining the fees collected by Scanlon and Abramoff, issuing subpoenas that have so far looked into financial transactions and the way money was moved from the tribes to Scanlon’s firms, a think tank set up by Scanlon and a non-profit operated by Abramoff.

And Abramoff’s former employer, Greenberg Traurig, is conducting its own investigation into his financial dealings with Scanlon, which the firm said it was unaware of until late last winter, when he was fired. The firm has said it may seek some form of financial retribution against Abramoff.

In opening the hearing Wednesday, Campbell said initial news reports dramatically undervalued the tribes’ payments.

“The truth is it’s much worse,” Campbell said, unveiling figures that showed Scanlon’s PR firms took in $66 million from six tribes.

Initial reports in The Washington Post that Scanlon and his firms funneled $10 million back to Abramoff or an offshoot firm he ran, were vastly underestimated, according to the committee. Over the three years or so of their partnership, Scanlon steered at least $21 million in money from tribes to Abramoff personally or Kay Gold Inc., a small firm that was run out of Abramoff’s home in Maryland.

McCain indicated that out of the $66 million paid to Scanlon, about $24 million went to expenses and the rest was split evenly between Scanlon and Abramoff as profit. And lobbying reports show five tribes paid another $18.6 million to Greenberg Traurig for Abramoff’s service.

Campbell said there were two key issues that concerned him: that the tribes were not aware of Abramoff’s arrangement to receive money from Scanlon’s firms and that, before winning these lucrative deals, Scanlon worked for the elections of the tribal council leaders who then approved the multi-million-dollar deals.

Characterizing the deals, Campbell said, “You get us elected and we give you big-money contracts.”

The committee’s probe revealed several questionable and embarrassing details:

• At least one tribe, the Agua Caliente of California, paid $300,000 into a pool of money Abramoff used to rent box suites at FedEx Field, the MCI Center and Camden Yards;

• A Jan. 16, 2002, e-mail from Abramoff to Scanlon talked about needing “moolah” and set a goal of making “$50M this year (our cut!).”

• In one nine-month period in 2002, Scanlon’s Capitol Campaign Strategies sent more than $12 million to Abramoff’s Kay Gold Inc.

The committee painted a portrait of Scanlon working hard to get friendly tribal council leaders elected, winning big deals for himself and Abramoff, then doing little work or sub-contracting it out to local vendors.

In a potentially damaging blow, McCain read from a letter from the Mississippi Band of Choctaws — Abramoff’s longest-held tribal client which had stood by him in the earliest stages of the unfolding scandal — saying it now believed the tribe had been misled by the lobbyist and was fully cooperating with the grand jury.

Abramoff, in a soft voice, deflected all questions from Campbell, McCain, Inouye and the other Democrats who showed up, repeatedly saying, “I respectfully invoke the privileges previously stated.”

He and his lawyer, Abbe Lowell, entered the hearing from a back door after opening statements, and exited without taking questions from reporters. Lowell’s representatives declined to put out any statements on the hearing or the findings of the panel.

The committee heard from a pair of tribal leaders, Bernard Sprague of the Saginaw Chippewa of Michigan and Richard Milanovich of the Agua Caliente, who led the opposition to Abramoff and Scanlon’s deals in their tribes. Also appearing was a former employee of the Saginaws, Chris Petras, who, according to numerous e-mails from Abramoff and Scanlon, was involved in arranging the original deal with the tribe.

Petras frequently told Senators he could not “recall” meetings. He admitted that at one point he received a digital camera and a video recorder for his work on Abramoff and Scanlon’s behalf. “It felt like Christmas,” he said.

In addition, Petras and other tribal officials got their pictures taken with Bush and with Karl Rove, his top political adviser.

Afterward, his lawyer contended that the tribes did nothing wrong in paying such large sums to Abramoff and Scanlon, adding that the duo helped rake in $10 million in federal funds for the Saginaws.

“They got their money’s worth,” said John van Horn, a D.C. lawyer retained by Petras, complaining: “That was not an investigative hearing, that was political theater.”

The most damaging act in that “theater” was undoubtedly the dozens upon dozens of e-mails to and from Abramoff which portrayed a lobbyist who scorned the very clients who were enriching him. In one he referred to the Choctaws late payments and told Scanlon “we need to get some $ from those monkeys!!!”