The Jack Abramoff Indian lobbying scandal was a United States political scandal exposed in 2005; it related to fraud perpetrated by political lobbyists Jack Abramoff, Ralph E. Reed Jr., Grover Norquist, and Michael Scanlon on Native American tribes who were seeking to develop casino gambling on their reservations. The lobbyists charged the tribes an estimated $85 million in fees. Abramoff and Scanlon grossly overbilled their clients, secretly splitting the multi-million dollar profits. In one case, they secretly orchestrated lobbying against their own clients in order to force them to pay for lobbying services.
In the course of the scheme, the lobbyists were accused of illegally giving gifts and making campaign donations to legislators in return for votes or support of legislation. Representative Bob Ney (R-OH) and two aides to Tom DeLay (R-TX) were directly implicated; other politicians had various ties.
Guilty pleas Scanlon and Abramoff both pleaded guilty to a variety of criminal charges related to the scheme.
On January 3, 2006, Abramoff pleaded guilty to three felony counts—conspiracy, fraud, and tax evasion—involving charges stemming principally from his lobbying activities in Washington on behalf of Native American tribes. In addition, Abramoff and other defendants were ordered to make restitution of at least $25 million that was defrauded from clients, most notably the Native American tribes. Abramoff owes the Internal Revenue Service $1.7 million as a result of his guilty plea to the tax evasion charge. The court filing is available as a PDF
On May 8, 2006, Neil Volz, former chief of staff to Representative Bob Ney (R-Ohio), staff director of the House Administration Committee, and later part of Team Abramoff, pleaded guilty to one count of conspiracy, including wire fraud and violating House rules, charges stemming from his work for both Ney and Greenberg Traurig.
On March 23, 2007, J. Steven Griles, former Deputy Secretary of the U.S. Department of Interior, pleaded guilty to obstruction of justice in the Senate investigation of the Abramoff scandal. A political appointee, he was the top Bush administration official to plead guilty in the scandal.
Investigations On November 25, 2005, The Wall Street Journal reported the expansion of the investigation to four members of Congress: in addition to Ney and DeLay, the report includes Rep. John Doolittle (R., Calif.) and Sen. Conrad Burns (R., Mont.) On December 2, 2005, The New York Times reported that federal prosecutors were considering a plea bargain arrangement that would give Abramoff some consideration if he provided evidence that would implicate members of Congress and their senior staffers in receiving job offers in return for legislative favors.
The guilty pleas signed by Abramoff in early January 2006 state that he bribed public officials. One of the cases of bribery described in detail involves a person identified as "Representative #1," who was reported by The Washington Post to be Representative Bob Ney (R-OH). Ney's spokesman confirmed that Ney was the representative identified, but denied any improper influence. The agreement also details Abramoff's practice of hiring former congressional staffers. Abramoff used these persons' influence to lobby their former Congressional employers, in violation of a one-year federal ban on such lobbying.
After Abramoff's guilty plea, the federal government shifted its investigation in January 2006 to focus on the lobbying firm Alexander Strategy Group,alexanderstrategy.com founded by a "close friend of DeLay's and his former chief of staff."U.S. lobbying inquiry shifts to a second firm - International Herald Tribune The lobbying firm announced its closure at the end of the same month due to "fatal publicity"; it had represented such large firms as Microsoft and PhRMA.
On June 22, 2006, the U.S. Senate Committee on Indian Affairs released its final report on the scandal. The report states that under the guidance of the Mississippi Choctaw tribe's planner, Nell Rogers, the tribe agreed to launder money because "Ralph Reed did not want to be paid directly by a tribe with gaming interests." It also states that Reed used non-profits, including Grover Norquist's Americans for Tax Reform, as pass-throughs to disguise the origin of the funds, and that "the structure was recommended by Jack Abramoff to accommodate Mr. Reed's political concerns."
ABC News reported on November 15, 2006, that Abramoff told prosecutors that Senator Harry Reid (D) requested contributions of $30,000 from the lobbyist's clients. After being paid, Reid agreed to assist Abramoff in matters concerning Indian casinos.
In August 2010, the federal government ended a six-year investigation of DeLay's ties to Abramoff, according to Richard Cullen, DeLay's lead counsel in the matter. State prosecution continued in Texas, which ended in November 2010 with DeLay being found guilty of conspiracy and money laundering. In January 2011, he was sentenced to three years in state prison.McKinley, James Jr. "DeLay Sentenced to 3 Years in Conspiracy and Money-Laundering Case", The New York Times, 11 January 2011. DeLay appealed his conviction to the Texas Court of Appeals for the Third District at Austin, which heard oral arguments on October 10, 2012.Laylan Copelin, "DeLay sentenced to 3 years in prison" , Austin American-Statesman, January 10, 2011; accessed August 21, 2014. On September 19, 2013, a ruling by the Court of Appeals overturned his convictions and entered an acquittal. The Texas Court of Criminal Appeals granted the prosecution's petition for discretionary review on March 19, 2013, agreeing to review the decision of the Texas Court of Appeals Third District.Mark Memmott, "Tom DeLay's conviction overturned on appeal", National Public Radio, September 19, 2013; retrieved October 14, 2013.Dissenting Opinion by Justice J. Woodfin Jones, Texas Court of Appeals Third District at Austin, Woodfin Jones. Case No. 03-11-00087-CR, September 19, 2013; retrieved October 14, 2013.Texas Court of Criminal Appeals, Pet. No. PD-1465-13 , cca.courts.state.tx.us; accessed August 21, 2014."Texas Court Of Criminal Appeals Weighing Tom DeLay's Overturned Conviction", Texas Public Radio (June 18, 2014).Texas Court Of Criminal Appeals weighs state's appeal of DeLay exoneration, kut.org; accessed August 21, 2014. The Texas Court of Criminal Appeals ruled, 8–1, to affirm the lower courts' dismissal on October 1, 2014.Not so fast, Tom Delay, Salon.com, Brad Friedman, September 23, 2013. Retrieved May 31, 2019.
Background
Mississippi Choctaw—introduction to tribal lobbying In the second half of the 1990s, Abramoff was employed by Preston Gates Ellis & Rouvelas Meeds LLP, the lobbying arm of Preston Gates & Ellis LLP law firm based in Seattle, Washington. In 1995, Abramoff began representing Native American tribes that were seeking to establish gambling on reservations, starting with the Mississippi Band of Choctaw Indians.
The Choctaw originally had lobbied the federal government directly, but beginning in 1994, they found that many of the congressional members who had responded to their issues had either retired or were defeated in the "Republican Revolution" of the 1994 elections. Nell Rogers, the tribe's specialist on legislative affairs, had a friend who was familiar with Abramoff's father and Abramoff's work as a Republican activist. The tribe contacted Preston Gates, and soon after hired the firm and Abramoff.
One of Abramoff's first actions was to defeat a Congressional bill that sought to use the unrelated business income tax (UBIT) to tax Native American casinos; it was sponsored by Reps. Bill Archer (R-TX) and Ernest Istook (R-OK). Since the matter involved taxation, Abramoff enlisted help from his college acquaintance, fellow Republican Grover Norquist, and his Americans for Tax Reform (ATR). The bill was eventually defeated in 1996 in the Senate, due in part to grassroots work by ATR, for which the Choctaw paid $60,000.
According to Washington Business Forward, a lobbying trade magazine, "[Tom DeLay] was a major factor in those victories, and the fight helped cement the alliance between the two men.www.bizforward.com
Ralph Reed and Grover Norquist Later in 1999, Abramoff enlisted the help of another Republican friend, Ralph Reed. The Choctaw needed to defeat a bill in the Alabama State Legislature that would allow casino-style games at dog racing tracks. This would have resulted in competition for their casino business. Reed had recently contacted Abramoff via email, looking for some help in establishing new business.
Reed proposed to Abramoff some work which he and his firm, Century Strategies, could perform. Reed could access "3,000 pastors and 90,000 religious conservative households" in Alabama, as well as "the Alabama Christian Coalition, the Alabama Family Alliance, the Alabama Eagle Forum, [and] the Christian Family Association." Reed wanted a $20,000 per month retainer for his services.
On April 6, 1999, Abramoff got Preston Gates to approve hiring Reed as a subcontractor, and told Reed to "get me invoices as soon as possible so I can get Choctaw to get us checks asap."
By May 10, 1999, the Choctaw had paid $1.3 million to Reed via Preston Gates, for various grassroots activities relating to the dog-track bill, as well as opposing an Alabama state lottery.
The tribe discontinued paying the money through Preston Gates when Abramoff suggested that they use Norquist's Americans for Tax Reform as a conduit, to which the tribe agreed. Although the anti-gambling effort was not related to ATR's anti-taxation activities, ATR passed checks of up to $300,000 from the Choctaw to Reed's firm, in one case taking $25,000 as a "management fee". Later in 1999, Abramoff used Reed's services again to oppose the federal Internet Gambling Prohibition Act, on behalf of eLottery, a corporate client.
"Team Abramoff"
At Greenberg Traurig, Abramoff assembled a "dream team" made up of men who had previously worked as staff for Congressional leaders. The team included Tony Rudy, with whom Abramoff had worked extensively during the Marianas and eLottery lobbying, while Rudy was serving as Chief of Staff to Tom DeLay. Abramoff had hired Rudy while he was still at Preston Gates & Ellis, and brought him and six other staff lobbyists over to Greenberg Traurig. The hiring of Rudy was one of the first instances in a pattern by which Abramoff would directly hire former aides of representatives whom he was actively lobbying.
2001 White House transition team member Because he was dealing with Native American tribes, Abramoff needed a contact in the Department of Interior, where the Bureau of Indian Affairs (BIA) oversaw Indian affairs. His main contact in the office of Deputy Secretary of the Interior Steven Griles was Italia Federici, a former political aide to Secretary of the Interior Gale Norton. The lobbyist's main contact in the West Wing of the White House was his former aide Susan Ralston, who became the Executive Assistant to Karl Rove, then Senior Advisor to President George W. Bush. In 2007 Griles and Federici pleaded guilty to obstruction of justice in the Senate investigation of the Abramoff scandal; Griles on March 23 and Federici on June 8.
"Gimme Five" begins Abramoff and Michael Scanlon appeared to begin their plan for fraud via an email exchange on June 18, 2001, as documented in "Gimme Five"—Investigation of Tribal Lobbying Matters, the final report of the Senate Committee on Indian Affairs' investigation into Abramoff.
After his career in the office of Congressman Tom Delay, Scanlon had briefly been a member of Team Abramoff. He set up his own public affairs consulting firm and contacted Abramoff.