Panel Says Abramoff Laundered Tribal Funds

By Susan Schmidt and James V. Grimaldi
Washington Post Staff Writers
Thursday, June 23, 2005

Lobbyist Jack Abramoff used money from a Mississippi tribal client to set up bogus Christian anti-gambling groups and to fund pet projects including gear for a "sniper school" in the Israeli-occupied West Bank, according to documents released yesterday by Senate investigators.

The revelations came in e-mails and testimony made public yesterday by the Senate Indian Affairs Committee at its third hearing on the activities of Abramoff and Michael Scanlon, a public relations executive and former spokesman for House Majority Leader Tom DeLay (R-Tex.).

Abramoff, who is also at the center of a corruption investigation by the Justice Department, laundered tribal money by directing the Indians to donate to tax-exempt groups that the lobbyist later used for his own purposes, the Senate committee said. One project involved Abramoff's effort to arrange for military equipment, including night-vision goggles and a "jeep," for the sniper training conducted by a high school friend.

Aaron Stetter, a former Scanlon employee, testified that Scanlon and Abramoff sought to whip up opposition to casinos proposed by rival tribes by setting up bogus Christian phone banks. He said callers would identify themselves as members of groups such as the Christian Research Network or Global Christian Outreach Network and urge voters to contact their representatives.

Material released yesterday also appeared to undermine assertions by former Christian Coalition executive director Ralph Reed, now a candidate for Georgia lieutenant governor.

Reed has acknowledged receiving $4 million from Abramoff and Scanlon to run anti-gambling campaigns in the South. Reed has said he did not know where the funds were coming from, but e-mails suggest that he was aware that some of the money he was getting came from the casino-rich Mississippi Band of Choctaw Indians.

Other e-mails presented at the hearing -- obtained from Abramoff's former law firm, Greenberg Traurig LLP -- showed that Abramoff and his lobbying team discussed how they would "pump up" their bills and expense accounts to the Choctaws by tens of thousands of dollars a month, raising new questions about the law firm's failure to rein in the lobbyists.

The committee chairman, Sen. John McCain (R-Ariz.), said investigators had uncovered possible mail and wire fraud that should be pursued by the Justice Department, as well as tax issues that would be of concern to the Internal Revenue Service. The Justice Department already is looking into more than $82 million in lobbying and public relations fees Abramoff and Scanlon received from tribes around the country.

Choctaw Chief Phillip Martin did not testify, but he said in a statement that "we were astounded that a senior director at a major law firm would or could engage in misconduct of this sort . . . and that he was able to get away with it for so long."

Donald Kilgore, attorney general of the Choctaw tribe, said the firm's lobbyists engaged in "a blatant, calculated scheme to defraud a client." He said records and e-mails the tribe has reviewed show a series of kickbacks, misappropriated funds and unauthorized charges. "Mr. Abramoff consistently directed that the bills be padded and pumped up," Kilgore said.

Greenberg spokeswoman Jill Perry said that when the firm learned of Abramoff's activities more than a year ago, it demanded his resignation. "We share others' outrage at this misconduct, which is antithetical to our firm's culture and values," Perry said.

A spokesman for Abramoff said that "any fair reading of Mr. Abramoff's career" would show that he was an effective lobbyist for his clients.

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