Ney, Abramoff Have Long Ties

Posted December 3, 2004 at 6:19pm

House Administration Chairman Bob Ney (R-Ohio), responding to recent revelations that he had become entwined in former Republican lobbyist Jack Abramoff’s efforts to allegedly bilk American Indian tribes out of millions of dollars, said he was “shocked, disgusted and appalled” once he learned the true nature of Abramoff’s activities.

“I am absolutely outraged by the dishonest and duplicitous words and actions of Jack Abramoff,” said Ney in statement released by his office on Nov. 17. It added, “Jack Abramoff repeatedly lied to advance his own financial interests.”

But Ney’s ties to Abramoff are more extensive than the Ohio Republican has publicly acknowledged, and on at least two occasions, actions taken by Ney closely tracked campaign donations from Abramoff or his close associates.

In addition, Ney’s longtime chief of staff, Neil Volz, went to work for Abramoff at the law and lobbying firm Greenberg Traurig in February 2002 — shortly before Ney agreed to support a legislative provision benefiting the Tigua tribe of El Paso, Texas. The Tiguas were secretly paying Abramoff and his business partner, Michael Scanlon, millions of dollars to help reopen a casino shut down by Texas officials.

Abramoff also lobbied Ney on behalf of Foxcom Wireless, an Israeli telecom company seeking a contract to install cellphone antennas throughout the House side of the Capitol grounds, according to The Washington Post. Foxcom donated $50,000 to a charitable foundation controlled by Abramoff in 2001, the Post reported, although the company, now called Mobile Access Wireless, did not register to lobby Congress until January 2003. Greenberg Traurig has been paid at least $240,000 since that time to represent the company. Foxcom’s contract was approved by Ney’s committee.

Ney and his staff insist that the Ohio Republican has done nothing wrong, and assert that he too was a victim of Abramoff’s double-dealing.

“I, like these Indian tribes and Members of Congress, was duped by Jack Abramoff,” Ney said in his Nov. 17 statement, which was released after Ney’s name was raised during a hearing in the Senate Indian Affairs Committee on the Tigua case.

But Ney has been helpful to Abramoff in the past, and the Ohio Republican benefited from the tens of thousands of dollars in campaign contributions that Abramoff steered in his direction. Abramoff has personally given $300,000 to GOP lawmakers since 1995, and the former lobbyist was also a big fundraiser for the Bush-Cheney campaign and Republican Congressional committees (see story, page 33).

On March 30, 2000, Ney inserted into the Congressional Record a statement criticizing Gus Boulis, then owner of SunCruz Casinos in Florida. At the time, Boulis was negotiating with Adam Kidan, a business partner of Abramoff’s, to sell SunCruz — which operated 11 gambling cruise ships based out of ports in Florida and South Carolina — to Abramoff and Kidan, according to South Florida’s Sun-Sentinel newspaper.

In the Congressional Record, Ney slammed Boulis over allegations of wrongdoing at the company. Boulis, a Greek immigrant, was being forced by the federal government to sell SunCruz because foreigners are not allowed to own U.S. commercial ships.

“Mr. Speaker, how SunCruz Casinos and Gus Boulis conduct themselves with regard to Florida laws is very unnerving,” Ney said in his statement. “Florida authorities … have repeatedly reprimanded SunCruz Casinos and its owner Gus Boulis for taking illegal bets, not paying their customers properly and [have] had to take steps to prevent SunCruz from conducting operations altogether.”

By late June 2000, Abramoff, Kidan and a third partner, former Reagan administration official Ben Waldman, had reached a tentative deal with Boulis to purchase the company, although Boulis agreed to lend them the bulk of the $147 million sale price, reported the Sun-Sentinel.

Shortly thereafter, on June 30, 2000, Kidan, Abramoff, Abramoff’s wife and Scanlon each made $1,000 contributions to Ney’s re-election campaign, according to federal election records.

On Oct. 26, 2000, Ney again inserted remarks about SunCruz into the Congressional Record. This time the remarks praised Kidan.

“Since my previous statement, I have come to learn that SunCruz Casinos now finds itself under new ownership and, more importantly, that its new owner has a renowned reputation for honesty and integrity,” said Ney. “While Mr. Kidan certainly has his hands full in his efforts to clean up SunCruz’s reputation, his track record as a businessman and as a citizen lead me to believe that he will easily transform SunCruz from a questionable enterprise to an upstanding establishment that the gaming community can be proud of.”

But Kidan, the former owner of Washington-based Dial-A-Mattress, was disbarred in New York in 2000 following a dispute with his stepfather over $100,000 Kidan reportedly misappropriated from a business deal, according to news reports. Questions have been raised publicly in several newspapers over Kidan’s ties to reputed organized crime figures.

In spite of Ney’s glowing assessment of Kidan, the SunCruz deal quickly soured, as Kidan and Boulis filed a number of lawsuits against one another over alleged violations of the sale agreement. At one point, Kidan charged that Boulis had threatened to have him murdered, according to news reports in the Sunshine State.

On Feb. 6, 2001, Boulis was shot and killed as he left his office in Ft. Lauderdale, Fla. No one has ever been charged in that crime.

On March 19, 2001, Abramoff, Kidan and three other SunCruz officials each donated $1,000 to Ney’s re-election campaign, according to federal election records. The donations were part of a fundraiser Abramoff hosted for Ney at the MCI Center in Washington. Abramoff himself gave another $2,500 to Ney’s leadership political action committee that October.

When reports of Kidan’s background first surfaced in July 2001, Ney, through his then-chief of staff Volz, repudiated his ties with Kidan, saying that he hadn’t been fully informed of Kidan’s background.

Scanlon later acknowledged that he had asked Ney to make the two floor statements.

“If [Ney] knew everything, I don’t know if he would have said what he said,” Volz told the Sun-Sentinel on July 25, 2001, referring to the Ohio Republican’s floor statement on Kidan.

Kidan, Abramoff and several financial companies that lent money to the partners are still involved in legal disputes over the assets of SunCruz, which declared bankruptcy in June 2001. Abramoff himself could be on the hook for $60 million in loans used to purchase the company.

Despite the SunCruz flap, Ney and Abramoff soon collaborated on another issue that was important to Abramoff.

In February 2002, Abramoff and Scanlon, who had been working on behalf of an Indian tribe in Louisiana to close down rival tribes’ casino operations in Texas, secretly approached the Tiguas with an offer of help.

The Tiguas, due to the earlier efforts of Abramoff and Scanlon, had had their own casino near El Paso closed down by Texas authorities on the grounds that the tribe’s federal charter did not permit the opening of a casino. The Tiguas were one of three Texas tribes to have their casinos closed by state officials.

Abramoff and Scanlon had devised a multimillion-dollar plan called “Operation Open Doors” to garner Congressional support for a revision to the tribe’s federal charter that would allow the tribe to reopen its casino.

“Operation Open Doors” cost $4.2 million to implement, all of which was to go to Scanlon, who would pass on nearly $1 million in “referral fees” to Abramoff. Abramoff would not register as a lobbyist for the Tiguas, and his involvement with the tribe was to be kept confidential.

In March 2002, Abramoff met with Ney to seek his support for including the Tigua provision in an election reform bill that the Ohio Republican was then shepherding through the House. With Volz now working for Abramoff at Greenberg Traurig, Ney agreed to the request.

“Just met with Ney !!! We’re f’ing gold !!!! He’s going to do Tigua,” Abramoff wrote to Scanlon in a March 20, 2002, e-mail released by the Senate Indian Affairs Committee.

Ney has said that Abramoff told him that his Senate counterpart, Sen. Chris Dodd (D-Conn.), then chairman of the Rules and Administration Committee, would support inclusion of the Tigua provision in the Help America Vote Act as well. Scanlon hired two lobbyists with ties to Dodd, who then paid one of Dodd’s top financial consultants, Lottie Shackelford, to help bring that about, according to several sources close to the matter.

Abramoff then persuaded the Tiguas to donate $30,000 in hard and soft money to Ney’s federal and nonfederal leadership PACs after meeting with the Ohio Republican. The donations were made in April 2002, according to Marc Schwartz, a Texas-based lobbyist hired by the tribe.

Ney’s leadership PAC, American Liberty PAC, hosted a dinner at Signatures, a restaurant that Abramoff had a financial stake in, on July 23, 2002, according to Federal Election Commission records. American Liberty paid $969 for the event.

Abramoff, however, suffered a setback two days later, July 25, 2002, when Ney, in a meeting with Dodd, brought up the issue of the Tigua provision and was told by Dodd that he didn’t support it. Ney then questioned Abramoff about the discrepancy between what the Ohio Republican had been led to believe and Dodd’s actual stance.

Abramoff quickly e-mailed Scanlon to find out what was happening: “I just spoke with Ney who met with Dodd on the [HAVA] bill and raised our [Tigua] provision. Dodd looked at him like a ‘deer in the headlights’ and said he had never made such a commitment and that, with the problems of the new casinos in Connecticut, it is a problem !!! Mike, please call me immediately to tell me how we wired this, or we’re supposed to wire it. Ney feels we left him out to dry.”

In a public statement Nov. 17, Ney cited this incident as proof that he was unaware of the extent of Abramoff’s behind-the-scenes machinations in the Tigua case.

“Believing that Senator Dodd supported this provision and knowing that Senator Dodd’s support was critical to HAVA’s passage, I then personally asked Senator Dodd about this provision, and he expressed no knowledge of it,” Ney said. “In short, I had been misled by Jack Abramoff. I then asked Jack Abramoff why Senator Dodd was apparently not supporting it and Mr. Abramoff told me that someone had lied to him. The matter was then closed from my perspective and this provision was not included in the Help America Vote Act.”

National Journal, however, reported last week that Volz sent e-mails to Abramoff in mid-2002 updating Abramoff on his contacts with Ney’s office on the Tigua provision. Volz, who did not return calls seeking comment, was banned under federal lobbying laws from lobbying Ney or his office for one year after his departure from Capitol Hill.

In addition, one week after the meeting with Dodd, Ney and Abramoff traveled to Scotland together on a trip paid for by a conservative organization, the National Center for Public Policy Research, that has been a large donor to a charitable foundation run by Abramoff. Abramoff was on the board for NCPPR at the time.

Abramoff had actually sought financial help from two Indian tribes to underwrite the cost of the trip, including the Tiguas, according to testimony given to the Indian Affairs Committee. Ney has said he was not aware of that fact.

Ney reported to the House Clerk’s office that his portion of the trip cost $3,200, although The Washington Post has reported that Abramoff, through the Capital Athletic Foundation, paid more than $150,000 for the excursion, which included a private jet to and from Scotland and rounds of golf for those who attended. The National Center of Public Policy Research, which contributed $450,000 to the Capital Athletic Foundation in 2002, was listed as the sponsor of the trip on Ney’s filing with the Clerk’s office.

Also included in the August 2002 trip were Volz and Ralph Reed, the former head of the Christian Coalition turned lobbyist. Reed had been working closely with Abramoff and Scanlon to shut down casinos operated by rivals of the pair’s Indian clients. David Safavian, then chief of staff of the General Services Administration, was on the trip as well. Safavian is now the procurement policy administrator at the Office of Management and Budget. Safavian, a former House GOP staffer, launched a lobbying firm in 1997 with Grover Norquist, a longtime political ally of Abramoff’s.

When Ney returned from the Scotland jaunt, the Ohio Republican met personally that month with representatives from the Tigua tribe and discussed the outlook for passage of an election reform bill that included the Tigua provision, according to Schwartz.

In October 2002, after the election reform bill had been approved by Congress without the Tigua language, Ney held a conference call with members of the Tigua tribal council “and told them of his disbelief that Sen. Dodd had gone back on his word,” Schwartz told the Indian Affairs Committee. Ney “further reported that he would continue to work on the issue and believed that the tribe was entitled to their gaming operation, and he would personally continue to seek a solution,” Schwartz testified.