How a Lobbyist Stacked the Deck

DeLay, an outspoken opponent of gambling, was an instrument, witting or unwitting, in eLottery's campaign, documents and interviews show. Along with Rudy, he was a guest on a golfing trip to Scotland. As majority whip, he cast a rare vote against his party on the Internet gambling bill and for the rest of the year helped keep the measure off the floor. He told leadership colleagues that another vote could cost Republican seats in the hard-fought 2000 elections.

A statement from DeLay's lawyer said his votes "are based on sound public policy and principle."

The Scotland trip is one aspect of the gambling matter being investigated by the corruption task force. The trip took place more than five years ago, which ordinarily would be beyond the five-year statute of limitations on certain possible corruption charges. But legal sources say prosecutors have obtained a waiver of the time limit because of the need to gather information abroad.

Desperate Company

Like many Internet companies emerging from the overheated 1990s, eLottery's money was drying up in the spring of 2000.

The company was founded in 1993 on the gamble that even a small fraction of the market for helping states and others put lotteries online could be worth a billion dollars a year. But the company faced many obstacles.

In 1998, the Justice Department had used existing gambling laws to force eLottery to shut down its first online lottery venture, with an Idaho Indian tribe. ELottery had not earned a dime since.

The Senate had passed the Internet Gambling Prohibition Act in late 1999, aiming to make it easier for authorities to stop online gambling sites. With a companion bill by Rep. Robert W. Goodlatte (R-Va.) advancing in the House in the spring of 2000, eLottery was desperate to ramp up its Washington lobbying. It had to sell off assets to stay afloat and raise cash.

In May, eLottery hired Abramoff's firm, Preston Gates & Ellis LLP, for $100,000 a month, according to lobbying reports. In the following months, Abramoff directed the company to pay hundreds of thousands of dollars to various organizations, faxes, e-mails and court records show. The groups included Norquist's Americans for Tax Reform; Sheldon's Traditional Values Coalition; companies affiliated with Reed; and a Seattle Orthodox Jewish foundation, Toward Tradition.

Robert Daum, a former eLottery official, said he could not recall the names of the groups that received the payments but noted that all the money spent by the company at Abramoff's direction was for the purpose of defeating the Internet bill.

"We were willing to pursue all legitimate means to ensure that outcome, as people do all the time in Washington," Daum said. "Nothing more, nothing less."

Arrayed against eLottery were many leading groups on the religious right who were pushing to ban Internet gambling, including the Moral Majority and the Christian Coalition. James Dobson, influential leader of Focus on the Family, praised the bill in an opinion piece for the New York Times.

Still, according to his strategy e-mails, Abramoff thought he could turn conservatives in the House against the bill. He seized on some compromise language in the bill making exceptions for jai alai and horse racing.