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Probe of Abramoff and Nonprofits' Money Opens

Senate Finance Committee Seeks Records on Trips by Reps. DeLay and Ney, Donations to Indian Tribes

By James V. Grimaldi
Washington Post Staff Writer
Thursday, March 17, 2005; Page A04

The Senate Finance Committee yesterday opened an investigation into allegations that lobbyist Jack Abramoff used nonprofit organizations to pay for a variety of improper activities, including overseas trips for House Majority Leader Tom DeLay (Tex.) and another Republican lawmaker.

Chairman Charles E. Grassley (R-Iowa) and Sen. Max Baucus (Mont.), the panel's top Democrat, faxed a letter to Abramoff's attorney seeking information from the Capital Athletic Foundation, a charity he created. The committee wants financial records and receipts for travel, which would include a 2002 trip to Scotland by House Administration Committee Chairman Robert W. Ney (R-Ohio) and lobbyist and former Christian Coalition leader Ralph Reed.


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The Finance Committee also asked Abramoff about contributions from Indian tribes and whether they were used to influence lawmakers. "Explain why [the foundation] solicited contributions from various Indian Tribal governments," the senators asked, "and why they should not be deemed payments for attempts to influence federal and state laws and regulations regarding gaming."

The letter also asked about the activities of a second tax-exempt charity, the National Center for Public Policy Research; Abramoff served on the group's board until he resigned last October. The center sponsored a trip to Britain in mid-2000 by DeLay, his wife, two aides and Abramoff.

Grassley is the second Republican lawmaker to join in investigating the lobbying activities of Abramoff, who is under scrutiny by a federal task force that includes the FBI, the National Indian Gaming Commission and the inspector general for the Interior Department. Grassley's committee is planning a hearing this spring on tax abuse by charities.


"This is one of a series of letters that the Finance Committee has sent and will continue to send to charities as part of oversight of tax-exempt organizations," a Republican staff member on the committee said.

Through a spokesman, Abramoff's attorney, Abbe David Lowell, declined to comment.

Grassley, a senior GOP legislator who has pursued key legislation for the Bush administration, joins Sen. John McCain (R-Ariz.), whose Committee on Indian Affairs is looking into tens of millions of dollars Abramoff received from about a dozen wealthy tribes that operate casinos.

In a closed-door meeting of the Republican caucus last week, McCain sought to assure colleagues that his investigation was focused on rooting out fraudulent activities and not meant to investigate the ethics of fellow lawmakers.

Both the athletic foundation and the national center have attracted media attention. Last year, The Washington Post reported that money donated to Abramoff's athletic foundation was spent mostly on pet projects, political causes, a short-lived religious school and an overseas golf trip.

The Post reported last week that the national center accepted $50,000 from an Indian tribe and a gambling services company to cover most of the cost of a trip it sponsored for DeLay in mid-2000. A Finance Committee staff member said a separate letter seeking similar documents may be sent to the national center.

Amy Ridenour, president of the National Center for Public Policy Research, said the organization would cooperate with any investigation.

The Finance Committee also is examining the flow of money to the charities from Abramoff clients and Greenberg Traurig LLC, the law firm that employed him at the time. The committee letter questions whether the charities followed tax laws regarding self-dealing among board members.

Tax records for the groups show a flow of $2.5 million through the national center to a company controlled by Abramoff and to Abramoff's athletic foundation. A person who has reviewed the national center's records, speaking on the condition of anonymity, said that in 2002 the Choctaw tribe, a client of Abramoff's, donated $1 million to the center and in 2003 Greenberg Traurig gave $1.5 million in "grants" that originated from an Abramoff client.

In 2003, the national center paid $1.275 million for consulting services to Kaygold, a limited-liability corporation controlled by Abramoff. At the time, Abramoff also was on the board of the center.

Referring to the Kaygold payment, the Finance Committee asked Abramoff to explain what services the national center received. Federal tax laws require tax-exempt organizations to show they took certain steps to avoid conflicts of interest when hiring a board member or a company a board member controls.

Meanwhile, Rep. Doc Hastings (R-Wash.), the new chairman of the Committee on Standards of Official Conduct, said he wants to "create a more ethical climate or culture in the House," starting with an increase in the committee's staff from 13 to 19. DeLay has offered to appear before the ethics committee to answer questions.

The panel's budget is the smallest of the 18 standing committees, and Hastings asked the Rules Committee, which handles committee budgets, for an increase from $3 million in the last two-year Congress to $4.8 million in the new Congress.

Staff writer Mike Allen and researcher Alice Crites contributed to this report.


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