November 17, 2004
Abramoff and Scanlon sued

DeLay cronies Jack Abramoff and Mike Scanlon have been sued by the Coushatta Tribe of Louisiana over the $32 million the two men bilked from them.

The lawsuit, filed in state court in Louisiana by the Coushatta Tribe of Louisiana, alleges that between 2001 and 2004 the tribe was overcharged and billed for work that was never performed, and that Abramoff and Scanlon converted tribal funds to personal use. The tribe said it is seeking to recover the $32 million it paid the pair and plans to seek punitive damages.

The Coushattas were one of six newly wealthy gambling tribes that paid the two men $82 million in public relations and lobbying fees for work that some tribe members contend was worth a small fraction of that sum. Abramoff also directed the tribes to give millions of dollars in campaign contributions to members of Congress.

The fees are the subject of a grand jury investigation in Washington. The FBI and a task force of five federal agencies are investigating the campaign contributions and whether tribal funds were misused, among other issues, according to government sources.

In also naming Abramoff's former law firm, Greenberg Traurig, which is headquartered in Florida, the Coushatta tribe alleged that it failed "to adequately supervise, control and monitor" Abramoff.

The tribe said the firm "was unjustly enriched by the fraudulent overbilling and overcharging practices."

"It's one thing to pay a premium for people who can make your case in Washington," said Joe Kendall, an attorney for the tribe. "It's something quite different to play on the fears of a group of people who may not know the system all that well and bilk them out of millions."

Greenberg Traurig ousted Abramoff when questions were raised in the spring about the lobbying and public relations fees he and Scanlon obtained from the tribes. The firm has said it is cooperating with the criminal investigations and a separate one by Congress, but Coushatta attorney Joe Kendall said yesterday the firm has not made any effort to reimburse the tribe for the more than $5 million Greenberg Traurig was paid.

Abramoff is a busy man these days. He may have a hard time defending himself in this lawsuit since his assets have been frozen, along with those of his wife, as part of a separate lawsuit.

Circuit Judge Eric Johnson issued an order this week barring the Abramoffs from transferring or depleting their assets other than for normal living expenses or to pay attorneys' fees. He did so at the request of 13 former employees of the now-defunct Eshkol Academy, who have sued the school and the Abramoffs. They contend that they were wrongly deprived of one-quarter of their annual salaries when the school closed in May.

The Eshkol Academy, an Orthodox Jewish school in Columbia that received most of its funds through Abramoff's efforts, was a casualty of the controversy resulting from Abramoff's lobbying practices. Abramoff was ousted by the Greenberg Traurig law firm this spring after disclosures that he and an associate charged tens of millions of dollars in fees to Indian tribes seeking to protect their gambling wealth. A federal grand jury is investigating their contracts with the tribes.

The Eshkol employees, who include nine teachers and the principal, contend they are owed $149,000. Johnson granted a temporary restraining order securing the Abramoffs' assets late Wednesday, pending a full hearing.

When it rains, it pours, I suppose. Thanks to AJ Garcia for the tip.

On a tangential matter, The Stakeholder has a petition going around to put pressure on the values-free House GOP caucus for its disregard of the legal process vis a vis the Travis County grand jury investigations into DeLay Incorporated. You've got to love the Republicans' reasoning.

Rep. Eric Cantor (R-Va.) told The Hill that the rule change, first reported by The Hill yesterday, “reflects a reality that [Earle’s investigation is] nothing but a political witch hunt bent on taking him to court. It’s the final phase that Democrats are coming to grips that Republicans are a permanent majority. There’s not any question it’ll pass.”


Republicans have used Democrats’ ethical lapses, including a check-kiting scandal at the House bank, to their political advantage. In 1987, then-Rep. Newt Gingrich (R-Ga.) told The Washington Post: “[You] now have a House where it is more dangerous to be aggressive about honesty than it is to be mildly corrupt. … We have in Wright, [Majority Leader Tom Foley (D-Wash.)] and Coelho a third generation of Democratic leaders, the first that has never served in a minority. … You now have a situation where I think people feel almost invulnerable.”

Cantor said, however, that by inoculating DeLay in the present case the Republicans will not lose the moral high ground gained by instituting the rule in the first place.

“That line of reasoning [accepts] that exercise of the prosecutor in Texas is legitimate,” he said.

One is almost tempted to admire them for their sheer contempt of what anyone who isn't them thinks. Talk about resoluteness!

By the way, for anyone in the state or national Democratic inner circles: Running a strong challenger against Henry Bonilla, who made the formal proposal of this rule change, might be a good idea. I'm just saying.

UPDATE: Scanlon gets spanked, and Abramoff is exposed as a liar in testimony before the Senate subcommittee. Click the More link for the story. Thanks to AJ Garcia for the tip.

In new testimony Wednesday in the Senate’s ongoing investigation into the exorbitant lobbying fees charged by Republican lobbyists Jack Abramoff and Michael Scanlon, tribal representatives charged that House Administration Chairman Bob Ney (R-Ohio) was a key — if unknowing — accomplice in a scheme to bilk millions of dollars from American Indian tribes.

At a Senate hearing Wednesday, representatives of the Tigua tribe painted Ney as the central player in an effort by Abramoff and Scanlon to persuade the tribe to hire the pair for a $4.2 million fee in 2002.

According to Marc Schwartz, a government affairs official with the Tigua tribe, Abramoff told the tribe in March 2002 that Ney had agreed to add a provision to an election-reform bill he authored that would permit the tribe to reopen its profitable Speaking Rock Casino in Texas, which had been closed by a federal judge in February 2002.

Abramoff later assured Tigua officials that the Senate sponsor of the election reform bill — Sen. Chris Dodd (D-Conn.) — had also promised Ney that he would sign off on the Tigua’s plans, Schwartz told a joint investigative committee in the Senate on Wednesday.

But it turns out that Dodd had not agreed to the provision and knew little about it. In a statement released after the hearing, Ney said that he had been “duped” by Abramoff.

Ney said that he only asked Dodd to include the Tigua’s provision because he had been told by Abramoff that the Connecticut Democrat supported the language.

“In short, I had been misled by Jack Abramoff,” Ney said in a statement.

One thing was clear during a joint hearing of the Senate Commerce, Science and Transportation, and Indian Affairs panels: the Tigua tribe thought that paying $4.2 million for its Washington lobbying team — and closely following their advice to give money to Ney financially — would allow them to reopen their casino in short order.

According to testimony from the Tigua’s Schwartz, Abramoff began asking the tribe to make political contributions to Ney and other key GOP lawmakers soon after he agreed to represent the tribe in early 2002.

Just weeks after the Tigua tribe inked a deal with Abramoff and Scanlon, Abramoff told the Tigua tribe to “make additional [political] contributions to Congressman Ney through some PACs he had,” Schwartz testified.

A few months later, Schwartz said he “received an e-mail from Abramoff stating that Congressman Ney had asked if the tribe could cover the expense for a trip to Scotland.”

Though the Tigua tribe agreed to send the political contributions to political action committees controlled by Ney and other Republican lawmakers, the tribe refused to pay the $50,000 requested to cover the costs of the trip.

Still, Abramoff assured the tribe that Ney planned to include the tribe’s casino language in the final version of the election reform legislation that year, according to Schwartz.

In August, Abramoff arranged for Schwartz and other tribe members to meet with Ney in Washington to discuss the prospects for the language, Schwartz said.

Before the meeting, Abramoff warned Schwartz in an e-mail “that Congressman Ney didn’t want his trip to Scotland brought up, as he would show his appreciation to the tribe later.”

Ney’s disclosure form on file with the House Clerk said the trip was paid for by the National Center for Public Policy Research, a large contributor to a nonprofit foundation run by Abramoff. A Tigua official testified Wednesday that two other tribes underwrote the trip.

In a lengthy, 90-minute meeting with tribal leaders in his Capitol Hill office, Schwartz said Ney praised Abramoff and his lobbying successes and personally pledged his support to help the Tigua include language in a bill to reopen the casino.

“During that meeting, Congressman Ney was very animated about Mr. Abramoff’s skill and repute as a leader in the lobbying circles,” Schwartz told the Senate hearing.

“We were told about the impending success of Mr. Abramoff’s legislative plan and how much Congressman Ney wanted to help,” he recalled.

Scanlon, for his part was telling tribal leaders that Dodd — the Senate sponsor of the election-reform legislation — that he would include the provision in the final version on his bill, Schwartz said.

But when the election reform bill passed in October 2002, the language that the Tigua tribe had sought — and which they paid $4.2 million to include — was not to be found.

The day after the bill was approved, Schwartz testified, “Abramoff phoned to say that he had just spoken with Congressman Ney who had reported that Senator Dodd had gone back on his word and stripped the measure from the committee report.”

Schwartz and other tribal members then prodded other lawmakers to call Dodd to find out what happened.

But the tribe was then told that Dodd “knew nothing about the issue,” Schwartz said.

On Oct. 8, 2002, Abramoff arranged for Ney to contact members of the tribe to express his outrage at the turn of events.

According to the testimony from Schwartz, “Ney held a conference call with the tribal council and told them about his disbelief that Senator Dodd had gone back on his word.”

However, Dodd said he never agreed to help the Tigua tribe in 2002 — and that he knew little about the issue.

In a statement read at Wednesday’s hearing, Dodd said neither Abramoff nor Scanlon “contracted me on recognition of the Tigua tribe and I never represented — either to them of Congressman Ney — that I would in any manner work to legislatively recognize the Tigua tribe.”

Dodd added that Ney and one of his aides “did approach my office during the waning hours of negotiations over the [election reform] legislation to inquire whether recognition provisions for the Tigua tribe could be included in the bill. The suggestion was summarily rejected.”

Ney, in his own statement, said that Abramoff “explicitly told me that this provision was supported by Senator Dodd.”

He added: “Believing that Senator Dodd supported this provision and knowing that Senator Dodd’s support was critical to [the election reform legislation’s] passage, I then personally asked Senator Dodd about this provision and he expressed no knowledge of it.”

Senate Commerce Chairman John McCain (R-Ariz.) blasted Abramoff and Scanlon, saying they “went to El Paso selling salvation and instead delivered snake oil.”

Meanwhile, a red-faced Scanlon sat in the second-to-last row of the hearing room, listening to the testimony.

When he was summoned to the witness table a few minutes later, he refused to answer questions from Senators about his activities, citing his Fifth Amendment right against self incrimination.

Looking down on Scanlon from the dais, Sen. Kent Conrad (D-N.D.) said: “I don’t know how you go to sleep at night. Really. I would hope that your conscience bothers you.”

But the day’s most dramatic moment came in the final minute of the hearing when retiring Sen. Ben Nighthorse Campbell (R-Colo.), the chairman of the Indian Affairs Committee and the only American Indian in the Senate, used his final words as chairman of the committee to express his scorn for Scanlon.

“For 400 years, people have been cheating Indians, so you are not the first one Mr. Scanlon,” he said. “You’re the problem, buddy, with what has happened to Native Americans in this country.”

Posted by Charles Kuffner on November 17, 2004 to Scandalized! | TrackBack

Message received ;-)

Posted by: jesselee on November 17, 2004 1:03 PM

'sok If the Republicans want to strip them selves of the "law & order" mantle, I'm sure we'll be happy to acknowledge their new criminal-friendly status. They've already shorn "fiscally responsible." It's a good thing that they all make sure to tell everyone that they're republicans or otherwise I'd not recognize them.

Posted by: 'stina on November 17, 2004 4:29 PM

AJ Garcia should really start a scandal blog. :)

Posted by: kevin whited on November 18, 2004 8:19 AM

Have you seen Josh Marshall's announcement of his project to find who the Rs who voted against it are? Scan upwards, too.

Posted by: Linkmeister on November 18, 2004 12:10 PM