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Foundation's Funds Diverted From Mission

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By R. Jeffrey Smith
Washington Post Staff Writer
Tuesday, September 28, 2004

The Capital Athletic Foundation's Web site portrays youths at play: shaking hands over a tennis net, learning how to hold a bat, straining for a jump ball. Its text solicits donations for what it describes as "needy and deserving" sportsmanship programs.

In its first four years of operation, the charity has collected nearly $6 million. A gala fundraiser last year at the International Spy Museum at one point attracted the Washington Redskins' owner as its chairman and was to honor the co-founder of America Online.

But tax and spending records of the Capital Athletic Foundation obtained by The Washington Post show that less than 1 percent of its revenue has been spent on sports-related programs for youths.

Instead, the documents show that Jack Abramoff, one of Washington's high-powered Republican lobbyists, has repeatedly channeled money from corporate clients into the foundation and spent the overwhelming portion of its money on pet projects having little to do with the advertised sportsmanship programs, including political causes, a short-lived religious school and an overseas golf trip.

The foundation's brief history -- now the subject of a federal investigation -- charts how Abramoff attached himself to House Majority Leader Tom DeLay (R-Tex.) and, in so doing, became a magnet for large sums of money from business interests. It also demonstrates how easily large amounts of such cash flowed through a nonprofit advocacy group to support the interests of a director.

Internal records state, for example, that Abramoff and his wife, Pam -- who are listed as the foundation's sole directors -- spent more than 70 percent of its revenue from 2001 to 2003, or $4.03 million, on a Jewish school that Abramoff founded in Columbia. The Eshkol Academy operated for two years and schooled two of his sons before closing this spring with unpaid bills, faculty members said.

The records also state that $248,742 of the foundation's income went toward buying a house near Abramoff's in Silver Spring, titled in the name of a company directed by Abramoff and fellow lobbyists from Greenberg Traurig, the Washington law firm where he worked until March. It was initially a school dormitory but is now slated to be sold, with proceeds benefiting the company.

Other recorded expenditures include $500 to help finance a memorial dinner two years ago in honor of the Angolan rebel Jonas Savimbi, and $150,225 for a golf trip to Scotland aboard a private jet. Abramoff's guests on the August 2002 trip included two fellow lobbyists, the Republican chairman of the House Administration Committee and a senior official at the General Services Administration.

Those and other expenditures by the foundation have sparked wide-ranging investigations by the Justice Department, the Internal Revenue Service and two congressional committees. A source familiar with the scope of the probes said a grand jury has asked questions concerning whether Abramoff used the foundation to conceal payments from clients and shelter income from taxation. A Senate hearing on Abramoff's lobbying activities and billing practices is planned for tomorrow.

Abbe D. Lowell, Abramoff's attorney, declined to respond to detailed questions about the Capital Athletic Foundation and its activities but said -- as Abramoff has -- that its critics are pursuing a "political and improper agenda." Abramoff publicist Andrew Blum said both the foundation and the Eshkol Academy were "real and properly run charitable institutions which supported real programs that made a real difference in the lives of children in our community."

Abramoff, Blum said, "has not used any charity improperly for his own benefit."

Ties to Indian Tribes

The investigation into Abramoff's financial activities began this spring after The Post disclosed that he and public relations executive Michael Scanlon, a former spokesman for DeLay, had received at least $45 million from Indian tribes that operate gambling casinos. The tribes also had donated $2.9 million to federal candidates since 2001.


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