From the New York Times
June 23, 2005
Senators Hear of a Wink-Wink Lobbyist Move
By ANNE E. KORNBLUT
WASHINGTON, June 22 - David Grosh was living the mellow life of an off-season
lifeguard in Rehoboth Beach, Del., when his childhood friend Michael Scanlon called
from Washington in 2001 with a proposition.
"Want to be head of an international corporation?" Mr. Grosh said Mr.
Scanlon asked him, almost in jest.
"I was like, sure," Mr. Grosh said.
Collecting less than $2,500, he became director of the American International
Center, which used his rental beach house as its official address. "I was
not really taking it seriously."
Four years later, Mr. Grosh, 36, wearing jeans and sideburns, recounted that tale
before the Senate Indian Affairs Committee, as part of its inquiry into Jack Abramoff,
the high-rolling Republican lobbyist.
The Senate panel and a federal task force are investigating whether Mr. Abramoff
defrauded several Indian tribes while charging them more than $80 million in fees
and expenses to promote their gambling interests.
The Rehoboth center, purportedly a think tank, turned out to be one of several
nonprofit groups used by Mr. Abramoff and Mr. Scanlon, his business partner, to
funnel money from the tribes to themselves and to pet projects, according to documents
and testimony at the hearing on Wednesday, the third on the matter.
In what they frequently referred to as their "gimme five" scheme, Mr.
Abramoff and Mr. Scanlon repeatedly talked about inflating their billable hours
and shifting money between groups - a move investigators think was intended to
avoid taxes and hide the origins or recipients of the money - to pay for travel,
personal loans and a friend's political campaigns.
Many of the exchanges were by e-mail, giving Senate investigators concrete evidence
to release to the public as they continued to build a case against Mr. Abramoff
that has been mounting for nearly a year.
Referring to the conservative leader Ralph Reed, Mr. Abramoff said to Mr.
Scanlon: "$100K to Ralph; $25K to contributions ($5K immediately to conservative
caucus); rest gimme five."
One e-mail message from Mr. Abramoff directed his assistant to "pump up Scanlon,"
a reference to padding their billable hours for the Choctaws to meet an artificial
$150,000 monthly target that the tribe testified it had never agreed to.
In 2001 alone, the Choctaws paid $7.7 million to Mr. Abramoff and Mr. Scanlon
for lobbying work. But the pair spent just $1.2 million on the designated projects,
keeping the remaining $6.5 million for "gimme five" - themselves - according
to the e-mail and witnesses.
The tribe ultimately paid Mr. Scanlon as much as $15 million, and he gave Mr.
Abramoff $5 million in kickbacks, said Senator John McCain, Republican of Arizona
and the chairman of the Senate committee.
"Mr. Abramoff betrayed a longstanding client, betrayed his colleagues,
betrayed his friend," Mr. McCain said.
The notes, many dashed off on BlackBerry devices, showed examples of greed and
deceit "that even by Washington standards are breathtaking," said Senator
Byron L. Dorgan of North Dakota, the leading Democrat on the committee.
"I'm past anger and bitterness," Nell Rogers, the administrative planner
for the Choctaws, said in her testimony on Wednesday. "It's an extraordinary
story of betrayal."
Among the transactions discussed by the Senate was a $1 million payment from the
Choctaws to the National Center for Public Policy Research, a nonprofit educational
group that organized an overseas trip for Representative Tom DeLay of Texas, the
majority leader, in 2001.
Amy Ridenour, the group's director, said she had agreed that her group would sponsor
a trip to England so Mr. DeLay could meet members of Parliament, but she testified
that she learned only later that a lavish golf outing in Scotland had been included.
Ms. Ridenour said she had been misled by Mr. Abramoff, whom she considered a friend
for nearly 20 years, as he funneled money through her organization.
Ms. Ridenour, who testified at length, said Mr. Abramoff first helped her secure
the Choctaw donation and then instructed her to cut checks to a nonprofit group,
the Capital Athletic Foundation, and to a company, Nurnberger & Associates,
that he said would do legitimate educational work.
Neither Ms. Ridenour nor officials from the Choctaw tribe knew that the foundation
was run by Mr. Abramoff, they testified, or that he owed the owner of the Nurnberger
& Associates $50,000 in unpaid personal loans from his days as a filmmaker.
The testimony showed in much more detail how closely Mr. Abramoff worked with
Mr. Reed, the former head of the Christian Coalition, who received some money
from tribes that participate in casino gambling to run a campaign to shut down
rival casinos. Mr. Reed, now a candidate for lieutenant governor in Georgia, has
insisted he did not know he was receiving money from Indian gambling entities.
The panel members remarked that Mr. Abramoff had routed $10,000 from the
Choctaws to Mr. Reed's campaign fund for chairman of the Georgia Republican Party,
without the tribe's knowledge.
Mr. Abramoff also appeared to have a closer working relationship with Grover G.
Norquist, the head of Americans for Tax Reform, than had been known. The lobbyist
refers more than once to payments made by the Indian tribes to Mr. Norquist's
group in exchange for visits to the White House.
"Last year Grover set a meeting for certain select tribal leaders (Coushatta
and Chitimach were the only ones) and the speakers of the House of several legislatures
to meet with the President in a small meeting for photos, etc.," Mr. Abramoff
wrote to Chris Petras, an official from another tribe he represented, the Saginaw
Chippewas, on Aug. 12, 2002. "The tribes paid for the event (total cost was
$100k for the entire thing, and each tribe put in $50k). Grover has asked me to
line up a few tribes to do so again."
Ms. Rogers, the Choctaw official, testified that the tribe had not intended for
its payments to go to Americans for Tax Reform to gain White House access, and
that in fact no one from the tribe had been part of the visit. Mr. Norquist has
denied any link between the donations to his group and the West Wing visits he
organized.
Some of the e-mail and testimony provoked laughter in the hearing room.
"I hate to ask your help with something so silly, but I have been nominated
for membership in the Cosmos Club, which is a very distinguished club in Washington,
DC, comprised of Nobel Prize winners, etc.," Mr. Abramoff wrote in an e-mail
message on Sept. 15, 2000, to Rabbi Daniel Lapin, a prominent social conservative
who runs Toward Tradition, an alliance of Jews and evangelical Christians.
"Problem for me is that most prospective members have received awards and
I have received none," Mr. Abramoff wrote. "I was wondering if you thought
it possible that I could put that I have received an award from Toward Tradition
with a sufficiently academic title, perhaps something like Scholar of Talmudic
Studies?"
In another e-mail message , Mr. Abramoff joked about his listing in the
alumni directory for Preston Gates & Ellis, his former law firm. "I'm
just surprised I am not under 'dead, disgraced or in jail,' " he wrote in
the message, dated June 26, 2001.
The lobbyists under scrutiny did not comment on the hearing on Wednesday. A phone
call to Mr. Scanlon's lawyer was not returned. Andrew Blum, a spokesman for Mr.
Abramoff, said in a statement: "With an ongoing political investigation being
directed by the U.S. Senate and an investigation at the Department of Justice,
Mr. Abramoff is put into the impossible position of not being able to defend himself
in the public arena until the proper authorities have had a chance to review all
accusations."
Mr. Grosh, now an excavator for a construction company, described the American
International Center as essentially a phantom organization. After accepting the
post of director to pay off a few bills, Mr. Grosh said he began to grow wary
when he heard Mr. Scanlon talk about the rest of his business enterprises. Mr.
Grosh quit after about five months out of a "gut feeling," he said,
that if "it involved the federal government, Indian tribes and gambling,
I knew that was headed down the wrong way."
Mr. Grosh testified that he did little work for the center - which paid
$1.5 million to Greenberg Traurig, Mr. Abramoff's lobbying firm - other than to
install some computers in his house.
"Did you have any board meetings?" Mr. McCain asked.
"Um, I recall one," Mr. Grosh replied.
"How long did that last?" Mr. McCain continued.
"Fifteen minutes," Mr. Grosh said, drawing titters from the room.
"Do you recall any business that was discussed at these meetings?" Mr.
McCain said.
"Off the top of my head?" Mr. Grosh said. "No." Then, he added:
"I'm sure we discussed something."