Lobbyist Jack Abramoff, a key figure in investigations involving House Majority Leader Tom DeLay, was indicted today by a federal grand jury on fraud charges arising from a 2000 deal to buy casino boats.
The indictment, returned by a grand jury in Fort Lauderdale, charges that Abramoff and an associate, 36-year-old New York businessman Adam Kidan, used a fake wire transfer to defraud two lenders out of some $60 million to finance the deal for SunCruz Casinos.
Abramoff and Kidan are charged with five counts of wire fraud and one count of conspiracy to commit wire fraud and mail fraud. Each count carries a penalty of up to 5 years in prison and a $250,000 fine.
The partners bought SunCruz, which runs a fleet of gambling boats, from entrepreneur Konstantinos "Gus" Boulis for $147 million in 2000, but the deal soon fell apart. Amid bitter legal fighting over the sale, Boulis was shot to death five months later in 2001 what police called a hit. The Fort Lauderdale killing has never been solved.
The indictment against Abramoff charges that he used income from SunCruz to finance political fund-raising activities, including events at private boxes at Washington-area sports venues such as the MCI Center and Oriole Park at Camden Yards.
DeLay, R-Texas, was not mentioned in any lawsuits involved in the SunCruz deal.
DeLay has asked the House Ethics Committee to review allegations that Abramoff or his clients paid some of DeLay's overseas travel expenses. DeLay has denied knowing that the expenses were paid by Abramoff, whom he once described as "one of my closest and dearest friends."
Abramoff collected more than $100,000 for President Bush's 2004 re-election campaign and raised thousands of dollars for DeLay and other Republican members of Congress. He also was friends with former Christian Coalition leader Ralph Reed, now a Republican candidate for lieutenant governor in Georgia.
A political committee founded by House Majority Leader Tom DeLay may have improperly spent unregulated "soft money" on get-out-the-vote and fundraising activities, the Federal Election Commission says. A DeLay attorney said Thursday the money has been reimbursed.
Americans for a Republican Majority Political Action Committee "potentially" spent about $203,000 in soft money from its nonfederal account to pay for the political activities and administrative expenses, the FEC found in an audit.
ARMPAC has federal and nonfederal accounts that shared certain expenses. The federal account could contain only money subject to federal contribution limits and from individuals and PACS. The non-federal account was not subject to federal regulations and could include soft money, which can include contributions from corporations and labor unions.
The FEC audit also found that DeLay's committee failed to report more than $300,000 in debts owed to 25 vendors and erroneously reported its finances. DeLay attorney Don McGahn said debts were paid but not in the time prescribed by the FEC. The expenses including spending on eight fundraising events, two each held at Four Streams Golf Club in Bealsville, Md., and Puerto Rico and others in Orlando, Fla., California, New York and Hackberry Creek Country Club in Irving, Texas.
Watchdog groups said the FEC audit raises questions whether similar activities were occurring with the Texas committee, which also had an account for limited, individual contributions and one for corporate, unlimited money.
"Is this the tip of the iceberg? We don't know," said Tom Fitton, president of Washington-based Judicial Watch.
The groups also questioned whether ARMPAC soft money assisted Texas campaigns. ARMPAC contributions totaling $24,000 were given to Texas Republican legislative candidates in 2002. The checks sent to them included DeLay's name and title as the PAC's chairman.