The Biggest Congressional Corruption Scandal In Generations...

How a Well-Connected Lobbyist Became the Center of a Far-Reaching Corruption Scandal

By Susan Schmidt and James V. Grimaldi
Washington Post Staff Writers
Thursday, December 29, 2005; A01

Jack Abramoff liked to slip into dialogue from "The Godfather" as he led his lobbying colleagues in planning their next conquest on Capitol Hill. In a favorite bit, he would mimic an ice-cold Michael Corleone facing down a crooked politician's demand for a cut of Mafia gambling profits: "Senator, you can have my answer now if you like. My offer is this: nothing."

The playacting provided a clue to how Abramoff saw himself -- the power behind the scenes who directed millions of dollars in Indian gambling proceeds to favored lawmakers, the puppet master who pulled the strings of officials in key places, the businessman who was building an international casino empire.

Abramoff is the central figure in what could become the biggest congressional corruption scandal in generations. Justice Department prosecutors are pressing him and his lawyers to settle fraud and bribery allegations by the end of this week, sources knowledgeable about the case said. Unless he reaches a plea deal, he faces a trial Jan. 9 in Florida in a related fraud case.

A reconstruction of the lobbyist's rise and fall shows that he was an ingenious dealmaker who hatched interlocking schemes that exploited the machinery of government and trampled the norms of doing business in Washington -- sometimes for clients but more often to serve his desire for wealth and influence. This inside account of Abramoff's career is drawn from interviews with government officials and former associates in the lobbying shops of Preston Gates & Ellis LLP and Greenberg Traurig LLP; thousands of court and government records; and hundreds of e-mails obtained by The Washington Post, as well as those released by Senate investigators.

Abramoff, now 47, had mammoth ambitions. He sought to build the biggest lobbying portfolio in town. He opened two restaurants close to the Capitol. He bought a fleet of casino boats. He produced two Hollywood movies. He leased four arena and stadium skyboxes and dreamed of owning a pro sports team. He was a generous patron in his Orthodox Jewish community, starting a boys' religious school in Maryland.

For a time, all things seemed possible. Abramoff's brash style often clashed with culturally conservative Washington, but many people were drawn to his moxie and his money. He collected unprecedented sums -- tens of millions of dollars -- from casino-rich Indian tribes. Lawmakers and their aides packed his restaurants and skyboxes and jetted off with him on golf trips to Scotland and the Pacific island of Saipan.

Abramoff offered jobs and other favors to well-placed congressional staffers and executive branch officials. He pushed his own associates for government positions, from which they, too, could help him.

He was a man of contradictions. He presented himself as deeply religious, yet his e-mails show that he blatantly deceived Indian tribes and did business with people linked to the underworld. He had genuine inside connections but also puffed himself up with phony claims about his access.

Abramoff's lobbying team was made up of Republicans and a few Democrats, most of whom he had wined and dined when they were aides to powerful members of Congress. They signed on for the camaraderie, the paycheck, the excitement.

"Everybody lost their minds," recalled a former congressional staffer who lobbied with Abramoff at Preston Gates. "Jack was cutting deals all over town. Staffers lost their loyalty to members -- they were loyal to money."

A senior Preston Gates partner warned him to slow down or he would be "dead, disgraced or in jail." Those within Abramoff's circle also saw the danger signs. Their boss had become increasingly frenzied about money and flouted the rules. "I'm sensing shadiness. I'll stop asking," one associate, Todd Boulanger, e-mailed a colleague.

Abramoff declined to comment for this article. "I have advised my client not to speak, except in court," said Neal Sonnett, one of his attorneys. A friend of two decades, Rep. Dana Rohrabacher (R-Calif.), defended Abramoff: "I think he's been dealt a bad hand and the worst, rawest deal I've ever seen in my life. Words like bribery are being used to describe things that happened every day in Washington and are not bribes."

Few of those interviewed would agree to be quoted on the record because of the ongoing investigation by a Justice Department task force. But some who spoke on the condition of anonymity said they look back in amazement at the heady days of Abramoff's rise.

"We weren't outside the box," the former Preston Gates colleague said. "We were outside the universe."

Hints of Trouble

A quarter of a century ago, Abramoff and anti-tax crusader Grover Norquist were fellow Young Turks of the Reagan revolution. They organized Massachusetts college campuses in the 1980 election -- Abramoff while he was an undergraduate at Brandeis and Norquist at Harvard Business School -- to help Ronald Reagan pull an upset in the state.

They moved to Washington, maneuvered to take over the College Republicans -- at the time a sleepy establishment organization -- and transformed it into a right-wing activist group. They were joined by Ralph Reed, an ambitious Georgian whose later Christian conversion would fuel his rise to national political prominence.

Soon they made headlines with such tactics as demolishing a mock Berlin Wall in Lafayette Park, where they also burned a Soviet leader in effigy. "We want to shock them," Abramoff told The Post at the time.

They forged lifelong ties. At Reagan's 72nd-birthday party at the White House, Reed introduced Abramoff to his future wife, Pam Alexander, who was working with Reed. She eventually converted to Judaism and embraced the Orthodox beliefs Abramoff had adopted as a teenager.

Even in those early days, there were hints of the troubles to come. "If anyone is not surprised at the rise and fall of Jack Abramoff, it is me," said Rich Bond, a former chairman of the Republican National Committee.

Abramoff and his crew busted the College Republicans' budget with a 1982 national direct-mail fundraising campaign that ended up "a colossal flop," said Bond, then deputy director of the party's national committee. He said he banished the three from GOP headquarters, telling Abramoff: "You can't be trusted."

Shortly thereafter, Abramoff was running Citizens for America, a conservative grass-roots group founded by drugstore magnate Lewis E. Lehrman. Abramoff was in frequent contact with Marine Lt. Col. Oliver L. North, the Reagan White House's Iran-contra mastermind, about grass-roots efforts to lobby Congress for the Nicaraguan contras, according to records in the National Security Archive.

One of Abramoff's most audacious adventures involved Jonas Savimbi, the Angolan rebel leader who had U.S. support but was later found to have ordered the murders of his movement's representative to the United States and that man's relatives. With Savimbi, Abramoff organized a "convention" of anticommunist guerrillas from Laos, Nicaragua and Afghanistan in a remote part of Angola. Afterward, Lehrman fired Abramoff amid a dispute about the handling of the group's $3 million budget.

Abramoff also worked on behalf of the apartheid South African government, which secretly paid $1.5 million a year to the International Freedom Foundation, a nonprofit group that Abramoff operated out of a townhouse in the 1980s, according to sworn testimony to the South African Truth and Reconciliation Commission.

At the same time, Abramoff dabbled as a Hollywood producer, shepherding an anticommunist movie, "Red Scorpion," starring Dolph Lundgren, filmed in Namibia, which was then ruled by South Africa. Actors in the film said they saw South African soldiers on the set. When the film was released in 1989, anti-apartheid groups demonstrated at the theaters. The movie ran into financial difficulty during and after production, but Abramoff produced a sequel, "Red Scorpion 2."

Mysterious Entrance

When Republicans wrested control of the House from the Democrats in 1994, Abramoff turned his focus back to Washington politics. With Norquist's help, he reinvented himself as a Republican lobbyist on heavily Democratic K Street. Norquist was one of the intellectual architects of the Republican Revolution and a muse for its leader, Newt Gingrich (R-Ga.), soon to be speaker of the House.

Abramoff also counted on his father, who had a wealth of connections from his days as president of the Diners Club credit card company. Frank Abramoff had once looked into operating a casino in the Commonwealth of the Northern Mariana Islands, U.S. territory that includes Saipan. He introduced his son around, and the Marianas became one of the first important clients of the new lobbyist.

Soon the younger Abramoff developed a key alliance with Rep. Tom DeLay, a conservative Republican from Texas who was working his way up in the House leadership. The two met at a DeLay fundraiser on Capitol Hill in 1995, according to a former senior DeLay aide. The aide recalled that Edwin A. Buckham, then DeLay's chief of staff, told his boss: "We really need to work with Abramoff; he is going to be an important lobbyist and fundraiser."

DeLay, a Christian conservative, did not quite know what to make of Abramoff, who wore a beard and a yarmulke. They forged political ties, but the two men never became personally close, according to associates of both men.

Almost from the start, Abramoff struck some rival lobbyists as a strange figure who operated on the margins. He even turned up as a representative of the Pakistani military when Prime Minister Benazir Bhutto went to Washington in 1995 to seek the return of $600 million the Islamabad government had paid for 28 F-16 fighters. The sale had been blocked by the U.S. government over concerns about Pakistan's nuclear program.

Bhutto's Washington lobbyists were at the Pakistani Embassy savoring her successful meeting with President Bill Clinton when a man in a suit made a mysterious entrance.

"Suddenly, this portly guy steps in and sits down. He says nothing," recalled one of the lobbyists. The Americans asked him to introduce himself. He folded his arms and refused.

"Finally, he says, 'I am Jack Abramoff,' " recalled the lobbyist, a well-connected Democrat. They had never heard of him. Abramoff explained that he was "close to Newt."

The astonished lobbyists for Bhutto learned that Abramoff had traveled to Islamabad and had sold his services to the Pakistani military without the prime minister's knowledge.

In the Senate, Abramoff befriended Republicans and their staffers, along with some Democrats on the appropriations committees. In August 1999, he signed up for the National Republican Senatorial Committee's "Tartan Invitational," in which a half-dozen Republican senators and their aides spent a few days with about 50 lobbyists golfing at the exclusive St. Andrews Links in Scotland.

The following year, Abramoff figured out how to use his clients to fund his own trips to St. Andrews with lawmakers. The first guests were DeLay and his aides.

Team Abramoff

With Norquist's help, Abramoff secured a spot on the transition team for the Interior Department after George W. Bush was elected president in 2000. He tried to place several officials in Interior, including an unsuccessful attempt to land a former Marianas official in the top spot overseeing U.S. territories.

He was able to befriend J. Steven Griles, the deputy interior secretary, e-mails and interviews show. By the sum mer of 2001, Abramoff was referring to him in an e-mail to a client as "our guy Steve Griles." Federal investigators are now looking into whether Griles interceded on behalf of Abramoff and improperly discussed a job with the lobbyist while in a position to affect his clients. Griles denied any wrong doing in recent testimony to the Senate.

Abramoff's team also cultivated Roger Stillwell, the Marianas desk officer at the Interior Department. In a recent interview, Stillwell said he accepted dinners at Abramoff's restaurant, Signatures, and tickets to Washington Redskins games. But he said that all those actions occurred while he was a contract employee at Interior, not a federal worker. He also said he sent Abramoff copies of e-mails he sent to his boss, but he noted that none of them contained confidential information and that "there's nothing wrong with doing that."

Abramoff wallowed in his access, real and imagined. When his crack administrative assistant Susan Ralston bolted for a position with White House political adviser Karl Rove, Abramoff told colleagues he had gotten her the job even though it was Ralston's old boss, Reed, who made it happen, her former colleagues said.

Even glowing profiles in the New York Times and Wall Street Journal noting Abramoff's extensive influence and impressive income were not enough. Abramoff quietly paid op-ed columnists thousands of dollars to write favorably about his clients, including one writer for Copley News Service who disclosed this month that he had been paid for as many as two dozen columns since the mid-1990s.

Abramoff drove his colleagues hard, often e-mailing them late into the night. Many more than doubled their Hill pay when they went to work with him, some earning salaries of $200,000 to $300,000.

"He hired a bunch of white, middle-class Irish Catholic guys who wanted to exceed their parents' expectations," said one of the young lobbyists who himself fit that description. "He was always pushing, demanding. He would say, 'We are a family, we will work 24 hours a day, we will win.' "

Team Abramoff included former staffers to DeLay, as well as to Sen. Conrad Burns (R-Mont.), head of the Senate Appropriations panel's Interior subcommittee; Rep. Robert W. Ney (R-Ohio), chairman of the House Administration Committee; Rep. John T. Doolittle (R-Calif.), who has served on the key House committee that oversees tribes; and Sen. Harry M. Reid (D-Nev.), now minority leader.

Abramoff gathered his troops for strategy meetings that were "a great show," rollicking forums where ethical niceties were derided with locker room humor, recalled a former Preston Gates colleague. "Jack would say, 'I gave that guy 10 grand and he voted against me!' " the former associate recalled.

Bill padding was openly discussed, according to Abramoff's Greenberg Traurig e-mails that have been released by the Senate Indian Affairs Committee. For example, in April 2000, Abramoff had lobbyist Shawn Vasell working on a monthly invoice to the Mississippi Band of Choctaw Indians, telling him to "be sure we hit the $150k minimum. If you need to add time for me, let me know."

An exasperated Vasell e-mailed back: "You only had 2 hours. We are not even close to this number . . . ." Abramoff's solution: "Add 60 hours for me," and "pump up" the hours for three or four other lobbyists.

The Choctaws were one of a half-dozen Indian tribes who gave more than $80 million to Abramoff between 2000 and 2003. Not only were the tribes paying Abramoff's lobbying firm, they were also paying Abramoff's secret outside partner, Michael Scanlon, who charged the Indians millions of dollars for public relations work and split the money with Abramoff. Scanlon's public relations fees did not have to be disclosed under lobbying rules, thus making it possible for the magnitude of their take from the tribes to be kept from public view. The two dubbed their scheme "Gimme Five," according to e-mails in which Abramoff disparaged their clients as "morons" and "troglodytes."

E-mails show that Abramoff put his money into an array of political and personal projects.

The nonprofit Capital Athletic Foundation, for example, allowed him to schmooze with Washington's movers and shakers at charity affairs. He put a congressional spouse -- Julie Doolittle, wife of the California lawmaker -- on his payroll to plan at least one event. The congressman's office has said that there was no connection between his wife's work and official acts.

The foundation was ostensibly created to help inner-city children through organized sports. There is no evidence money went to city kids, but the foundation did fund some of Abramoff's pet projects: a sniper school for Israelis in the West Bank, a golf trip to Scotland for Ohio congressman Ney and others, and a Jewish religious academy in Columbia that Abramoff founded and where he sent his children to be educated.

Another Abramoff financial vehicle was the nonprofit American International Center, a Rehoboth Beach, Del., "think tank" set up by Scanlon, who staffed it with beach friends from his summer job as a lifeguard. The center became a means for Abramoff and Scanlon to take money from foreign clients that they did not want to officially represent. Some of the funds came from the government of Malaysia. Banks and oil companies there were making deals in Sudan, where U.S. companies were barred on human rights grounds. Sudan was among several oil-rich nations in Africa, Asia and the Middle East that Abramoff eyed as venues for lucrative energy deals. Abramoff told associates he wanted to become a go-to person for U.S. companies seeking to do business with oil-patch nations.

But by early 2003, Abramoff's private dealmaking had spiraled out of control. His religious academy was draining his income, and his restaurants were hemorrhaging money. He told Scanlon in an e-mail that February that he was at "rock bottom" and needed funds immediately. By the next day, he was frantic. "Mike!!! I need the money TODAY! I AM BOUNCING CHECKS!!!"

'Enron of Lobbying'

To Abramoff's rivals in the niche world of tribal lobbying, however, he was still a confounding success.

Team Abramoff was stealing away tribal clients from other lobbyists and charging fees of $150,000 a month or more -- 10 or 20 times what the Indians had been paying to others. Team members did it by touting their ties to powerful Republicans on Capitol Hill and stoking tribal worries that Congress might try to tax casino proceeds. Abramoff and Scanlon also quietly got involved in tribal elections.

Sen. Byron L. Dorgan (N.D.), the ranking Democrat on the Indian Affairs Committee, remembers first hearing "vague complaints" about Abramoff in June 2003 from three Democratic lobbyists. The tribes had traditionally supported Democrats, but Abramoff was capturing them for Republicans, getting them to boost their contributions and give two-thirds to his party.

There was even more buzz on Capitol Hill about Scanlon, the gregarious former DeLay press aide who had become a multimillionaire almost overnight. His old friends were astonished that Scanlon, then in his early thirties, was traveling to the beach by helicopter and living in a waterfront Rehoboth mansion that he bought for nearly $5 million in cash. A Louisiana paper, the Town Talk of Alexandria, reported in September 2003 that the Coushatta tribe paid Scanlon's public relations firm $13.7 million, a figure that amazed tribal lobbyists as well as some of Abramoff's colleagues. It was around that time that one colleague, Kevin Ring, learned from one of Abramoff's assistants that his boss was secretly getting money from Scanlon, according to a source privy to the conversation.

"This could be the Enron of lobbying," Ring told the colleague.

Rival lobbyists, including some Republicans, were comparing notes about what they considered Abramoff's outrageous conduct.

One of them contacted The Post in fall 2003. In early 2004, The Post published a detailed account of Abramoff's tribal lobbying, showing how four of Greenberg Traurig's Indian clients had paid $45 million, most of it in fees to Scanlon's firm. Within weeks, Greenberg initiated an internal investigation, Abramoff was ousted and the Senate Indian Affairs Committee began its own inquiry, which unearthed hundreds of incriminating e-mails from Abramoff's Greenberg Traurig computer files.

Abramoff had another problem that few people in Washington knew about.

He and another old friend from College Republican days, Adam Kidan, had purchased in 2000 a fleet of Florida casino boats for $147.5 million. By 2004, SunCruz Casinos was bankrupt, and the two men were being sued by lenders for $60 million in loan guarantees, accused of faking a wire transfer for the $23 million they had promised to put into the deal.

Even more serious, Abramoff and Kidan were targets of a Florida federal grand jury investigating the SunCruz wire transfer. And local authorities were probing the gangland-style slaying of the man who had sold them the cruise line, Konstantinos "Gus" Boulis.

Greenberg Traurig officials have said that they asked Abramoff to resign in March 2004 over unauthorized personal transactions. They have noted that they had no knowledge of his financial arrangement with Scanlon before they received inquiries from The Post.

However, two months before the firm requested Abramoff's resignation, Greenberg lawyers representing Abramoff in the SunCruz bankruptcy summoned Scanlon to the firm's Miami headquarters to ask about the relationship, according to two people close to Scanlon. Scanlon told them he had paid Abramoff $19 million out of the money he had received in public relations fees from tribal clients. Cesar L. Alvarez, president and chief executive of Greenberg Traurig, said the firm will not comment on any meeting with Scanlon.

By the spring of 2004, the Justice Department had launched an investigation of Abramoff and Scanlon that quickly developed into a multi-agency task force.

Pressure to Plead

Nearly two years later, Abramoff's legal troubles appear to threaten the careers of many of his colleagues and political allies. Sources familiar with the Justice Department investigation say that half a dozen lawmakers are under scrutiny, along with Hill aides, former business associates and government officials.

Two of Abramoff's former business partners -- Scanlon and Kidan -- have pleaded guilty and have agreed to testify about bribery and fraud in Florida and Washington.

Three men have been arrested in the Boulis killing. Two of the three were Kidan's associates; one of them is known to law enforcement as an associate of the Gambino crime family.

Another former Abramoff associate, David H. Safavian -- most recently head of the Office of Federal Procurement Policy in the Office of Management and Budget -- has been indicted on five felony counts of lying to federal investigators about his dealings with Abramoff while he was chief of staff at the General Services Administration.

Within the past year, Abramoff began selling off assets such as his restaurants and has told his lawyers he is broke. He faces the possibility of lengthy prison sentences and stiff financial penalties that could be reduced if he cooperates.

All these developments have added to the pressure on Abramoff to reach his own deal before the SunCruz trial begins on Jan. 9.

Alan K. Simpson (R), the former Wyoming senator who was in Washington during the last big congressional scandal -- the Abscam FBI sting in the late 1970s and early 1980s, in which six House members and one senator were convicted -- said the Abramoff case looks bigger. Simpson said he recently rode in a plane with one of Abramoff's attorneys, who told him: "There are going to be guys in your former line of work who are going to be taken down."

Dozens of lawmakers -- who were showered with trips, sports and concert tickets, drinks and dinners -- are returning campaign contributions from Abramoff and his clients and calling him a fraud and a crook.

Burns, one of half a dozen legislators under scrutiny by the federal Abramoff task force, returned $150,000 in campaign contributions this month.

"This Abramoff guy is a bad guy," Burns told a Montana television station. "I hope he goes to jail and we never see him again. I wish he'd never been born, to be right honest with you."

Former Republican congressman Mickey Edwards (Okla.), usually a defender of lobbying and Congress, said there have always been members who get caught "stuffing money in their pants." But he said this is different -- a "disgusting" and disturbingly broad scandal driven by lobbyists whose attitude seemed to be "government to the highest bidder."

"This is at a scale that is really shocking," said Edwards, who teaches public and international affairs at Princeton. "There is a certain kind of arrogance that in the past you might not have had. They were so supremely confident that there didn't seem to be any kind of moral compass here."

Researcher Alice Crites contributed to this report.

© 2005 The Washington Post Company

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