washingtonpost.com: Lobbyist Quits as Firm Probes Work With Tribes

Correction to This Article
A March 4 article about the business relationship between the Saginaw Chippewa Indian tribe, which operates a casino, and its Washington-based public relations consultants, Capitol Campaign Strategies, incorrectly said the tribe had wired the company a $1.8 million payment in December 2001.

The company had sought a wire transfer of the money, as payment for services, in December shortly after a new tribal leaders were elected. But the actual payment was in a check issued by the tribe in February 2002.

Washington lobbyist Jack Abramoff, whose representation of casino-rich Indian tribes propelled his law firm to the top ranks of government affairs outfits, resigned under pressure yesterday after disclosing financial arrangements that his firm said were objectionable.

Richard A. Rosenbaum, a member of Greenberg Traurig's executive committee, said that last Friday Abramoff "disclosed to the firm for the first time personal transactions and related conduct which are unacceptable to the firm."

Abramoff and Michael Scanlon, a former spokesman for House Majority Leader Tom DeLay (R-Tex.), received more than $45 million in lobbying and public affairs work from newly wealthy tribes in the past three years -- an amount that rivals what some of the nation's biggest corporate interests pay to influence public policy. Abramoff also advised the tribes to give $2.9 million in federal political contributions, two-thirds of it to Republicans.

According to documents and numerous tribe members, Abramoff also has advised tribes to give hundreds of thousands of dollars to obscure organizations that appear to have no connection to Indian concerns. They include American International Center, a think tank that Scanlon, in an e-mail statement this week, said he founded. The organization paid $1.5 million in fees to Greenberg Traurig, becoming one of its largest lobbying clients.

Touting his ties to conservatives in Congress and the White House, Abramoff has become one of Washington's most powerful and best-paid lobbyists. He has convinced tribes with gambling wealth that they should support conservatives who share their anti-tax philosophy.

But the size of the lobbying fees and political contributions have spawned internal tribal battles, with some members publicly complaining that they cannot understand why a few tribal leaders have spent such sums for little in return.

"It is regrettable that Greenberg Traurig would indicate that my resignation was based on anything other than our mutual decision to ensure that recent events did not interfere with the representation of our clients," Abramoff said in a statement issued yesterday by public relations executive Marina Ein.

Abramoff added that lobbying firms should "be prepared to take and respond to political attacks and unpopular positions without overreacting."

Scanlon, responding earlier this week to e-mailed questions about AIC, which is located at an address associated with him in Rehoboth Beach, Del., acknowledged that the organization received $566,000 from a single tribe, the Louisiana Coushattas, which he said was payment for his services. Scanlon canceled a scheduled interview with The Washington Post yesterday.

Sen. John McCain (R-Ariz.) and the Senate Indian Affairs Committee this week began an investigation of work Abramoff and Scanlon did for the tribes after their activities were detailed in a Feb. 22 story in The Post.

Rosenbaum said he does not yet know all the facts about Abramoff's and Scanlon's activities. Abramoff resigned by mutual agreement with the firm, he said.

"We saw enough that we felt we had to have a mutual parting of the ways," he said in a telephone interview. "When we see something that we feel we don't want to have going on here, we act."

Abramoff, in an interview last month, denied he had any ownership interest in Scanlon's companies but declined to discuss his dealings with Scanlon any further. Yesterday, Rosenbaum was he was "not at liberty" to discuss the financial relationship between Abramoff and Scanlon.

Rosenbaum said Greenberg Traurig has retained outside lawyer Henry F. Schuelke to conduct an internal investigation. While Abramoff's fees of $180,000 per month from each of four tribes were the subject of much notice in the lobbying world, Rosenbaum said he was "not aware of any allegations of impropriety before."

The fees to Greenberg Traurig -- which total $15.1 million since 2001, according to federal lobbying reports -- are dwarfed by fees for public affairs work charged by Scanlon's Capitol Campaign Strategies. According to numerous tribe members, Abramoff recommended the firm to the tribes for work that included building databases of political supporters and generating letter-writing campaigns. Scanlon, 33, made more than $30 million, contracts and tribal documents show.

The four tribes -- the Louisiana Coushattas, Michigan's Saginaw Chippewas, the Agua Caliente of California and the Mississippi Choctaws -- hired Scanlon's firm mainly for state-level work, including efforts to prevent other tribes from opening rival casinos.

Members of the Saginaw Chippewa tribe have charged that Scanlon's company helped put together a "Slate of Eight" for the 2001 tribal council election, which then awarded him his first $1.8 million contract -- a payment that was wired to his firm days after the new council was sworn into office. Federal law prohibits using casino proceeds for the benefit of individual tribe members.

Over the past two weeks, FBI agents have been interviewing members of the Saginaw Chippewa tribe, according to law enforcement officials. The U.S. Interior Department's inspector general has also initiated an investigation, officials said. Authorities have also been examining alleged spending irregularities by the Louisiana Coushatta tribe, which takes in hundreds of millions of dollars yearly from its casino.

The Albuquerque Tribune reported yesterday that the Pueblo of the Sandia tribe paid $1 million to Scanlon's firm and $650,000 to Greenberg Traurig. Tribal leader Stuwart Paisano told the paper that "what we got definitely, in my opinion, did not justify the fee that we paid." Tribal officials could not be reached to comment yesterday.

A newly elected majority on the Saginaw Chippewa tribal council canceled contracts with Abramoff and Scanlon in December. Since then, Scanlon has sought $2.7 million for public opinion work he contracted to conduct this quarter, according to tribe members. In just over two years, the tribe paid $10 million to Scanlon's firm and $3.9 million to Greenberg Traurig.

At least one tribe may be preparing to seek redress from Greenberg Traurig, according to Washington sources close to one of the tribes. One of the sources said yesterday that tribal officials "are going to be looking at all legal avenues to recover moneys."

After Abramoff joined Greenberg Traurig, income from the firm's Washington lobbying practice rocketed it from 35th to third among lobbying firms, according to the National Journal.

Yesterday, Rosenbaum said that he does not believe Scanlon was officially an employee of the firm. He may have been hired for "special projects," or "would have been some kind of vendor to the firm," Rosenbaum said.