A Dec. 29 article about former lobbyist Jack Abramoff cited an incorrect date for an e-mail he sent about client bills. The e-mail was sent in April 2001, not April 2000. A Dec. 29 article misstated the position once held by the father of former lobbyist Jack Abramoff. Frank Abramoff was president of the franchises unit of Diners Club, not the parent company.
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The Fast Rise and Steep Fall of Jack Abramoff
The nonprofit Capital Athletic Foundation, for example, allowed him to schmooze with Washington's movers and shakers at charity affairs. He put a congressional spouse -- Julie Doolittle, wife of the California lawmaker -- on his payroll to plan at least one event. The congressman's office has said that there was no connection between his wife's work and official acts.
The foundation was ostensibly created to help inner-city children through organized sports. There is no evidence money went to city kids, but the foundation did fund some of Abramoff's pet projects: a sniper school for Israelis in the West Bank, a golf trip to Scotland for Ohio congressman Ney and others, and a Jewish religious academy in Columbia that Abramoff founded and where he sent his children to be educated.
Another Abramoff financial vehicle was the nonprofit American International Center, a Rehoboth Beach, Del., "think tank" set up by Scanlon, who staffed it with beach friends from his summer job as a lifeguard. The center became a means for Abramoff and Scanlon to take money from foreign clients that they did not want to officially represent. Some of the funds came from the government of Malaysia. Banks and oil companies there were making deals in Sudan, where U.S. companies were barred on human rights grounds. Sudan was among several oil-rich nations in Africa, Asia and the Middle East that Abramoff eyed as venues for lucrative energy deals. Abramoff told associates he wanted to become a go-to person for U.S. companies seeking to do business with oil-patch nations.
But by early 2003, Abramoff's private dealmaking had spiraled out of control. His religious academy was draining his income, and his restaurants were hemorrhaging money. He told Scanlon in an e-mail that February that he was at "rock bottom" and needed funds immediately. By the next day, he was frantic. "Mike!!! I need the money TODAY! I AM BOUNCING CHECKS!!!"
'Enron of Lobbying'
To Abramoff's rivals in the niche world of tribal lobbying, however, he was still a confounding success.
Team Abramoff was stealing away tribal clients from other lobbyists and charging fees of $150,000 a month or more -- 10 or 20 times what the Indians had been paying to others. Team members did it by touting their ties to powerful Republicans on Capitol Hill and stoking tribal worries that Congress might try to tax casino proceeds. Abramoff and Scanlon also quietly got involved in tribal elections.
Sen. Byron L. Dorgan (N.D.), the ranking Democrat on the Indian Affairs Committee, remembers first hearing "vague complaints" about Abramoff in June 2003 from three Democratic lobbyists. The tribes had traditionally supported Democrats, but Abramoff was capturing them for Republicans, getting them to boost their contributions and give two-thirds to his party.
There was even more buzz on Capitol Hill about Scanlon, the gregarious former DeLay press aide who had become a multimillionaire almost overnight. His old friends were astonished that Scanlon, then in his early thirties, was traveling to the beach by helicopter and living in a waterfront Rehoboth mansion that he bought for nearly $5 million in cash. A Louisiana paper, the Town Talk of Alexandria, reported in September 2003 that the Coushatta tribe paid Scanlon's public relations firm $13.7 million, a figure that amazed tribal lobbyists as well as some of Abramoff's colleagues. It was around that time that one colleague, Kevin Ring, learned from one of Abramoff's assistants that his boss was secretly getting money from Scanlon, according to a source privy to the conversation.
"This could be the Enron of lobbying," Ring told the colleague.
Rival lobbyists, including some Republicans, were comparing notes about what they considered Abramoff's outrageous conduct.
One of them contacted The Post in fall 2003. In early 2004, The Post published a detailed account of Abramoff's tribal lobbying, showing how four of Greenberg Traurig's Indian clients had paid $45 million, most of it in fees to Scanlon's firm. Within weeks, Greenberg initiated an internal investigation, Abramoff was ousted and the Senate Indian Affairs Committee began its own inquiry, which unearthed hundreds of incriminating e-mails from Abramoff's Greenberg Traurig computer files.
Abramoff had another problem that few people in Washington knew about.
He and another old friend from College Republican days, Adam Kidan, had purchased in 2000 a fleet of Florida casino boats for $147.5 million. By 2004, SunCruz Casinos was bankrupt, and the two men were being sued by lenders for $60 million in loan guarantees, accused of faking a wire transfer for the $23 million they had promised to put into the deal.
Even more serious, Abramoff and Kidan were targets of a Florida federal grand jury investigating the SunCruz wire transfer. And local authorities were probing the gangland-style slaying of the man who had sold them the cruise line, Konstantinos "Gus" Boulis.
Greenberg Traurig officials have said that they asked Abramoff to resign in March 2004 over unauthorized personal transactions. They have noted that they had no knowledge of his financial arrangement with Scanlon before they received inquiries from The Post.
However, two months before the firm requested Abramoff's resignation, Greenberg lawyers representing Abramoff in the SunCruz bankruptcy summoned Scanlon to the firm's Miami headquarters to ask about the relationship, according to two people close to Scanlon. Scanlon told them he had paid Abramoff $19 million out of the money he had received in public relations fees from tribal clients. Cesar L. Alvarez, president and chief executive of Greenberg Traurig, said the firm will not comment on any meeting with Scanlon.
By the spring of 2004, the Justice Department had launched an investigation of Abramoff and Scanlon that quickly developed into a multi-agency task force.
Pressure to Plead
Nearly two years later, Abramoff's legal troubles appear to threaten the careers of many of his colleagues and political allies. Sources familiar with the Justice Department investigation say that half a dozen lawmakers are under scrutiny, along with Hill aides, former business associates and government officials.
Two of Abramoff's former business partners -- Scanlon and Kidan -- have pleaded guilty and have agreed to testify about bribery and fraud in Florida and Washington.
Three men have been arrested in the Boulis killing. Two of the three were Kidan's associates; one of them is known to law enforcement as an associate of the Gambino crime family.
Another former Abramoff associate, David H. Safavian -- most recently head of the Office of Federal Procurement Policy in the Office of Management and Budget -- has been indicted on five felony counts of lying to federal investigators about his dealings with Abramoff while he was chief of staff at the General Services Administration.
Within the past year, Abramoff began selling off assets such as his restaurants and has told his lawyers he is broke. He faces the possibility of lengthy prison sentences and stiff financial penalties that could be reduced if he cooperates.
All these developments have added to the pressure on Abramoff to reach his own deal before the SunCruz trial begins on Jan. 9.
Alan K. Simpson (R), the former Wyoming senator who was in Washington during the last big congressional scandal -- the Abscam FBI sting in the late 1970s and early 1980s, in which six House members and one senator were convicted -- said the Abramoff case looks bigger. Simpson said he recently rode in a plane with one of Abramoff's attorneys, who told him: "There are going to be guys in your former line of work who are going to be taken down."
Dozens of lawmakers -- who were showered with trips, sports and concert tickets, drinks and dinners -- are returning campaign contributions from Abramoff and his clients and calling him a fraud and a crook.
Burns, one of half a dozen legislators under scrutiny by the federal Abramoff task force, returned $150,000 in campaign contributions this month.
"This Abramoff guy is a bad guy," Burns told a Montana television station. "I hope he goes to jail and we never see him again. I wish he'd never been born, to be right honest with you."
Former Republican congressman Mickey Edwards (Okla.), usually a defender of lobbying and Congress, said there have always been members who get caught "stuffing money in their pants." But he said this is different -- a "disgusting" and disturbingly broad scandal driven by lobbyists whose attitude seemed to be "government to the highest bidder."
"This is at a scale that is really shocking," said Edwards, who teaches public and international affairs at Princeton. "There is a certain kind of arrogance that in the past you might not have had. They were so supremely confident that there didn't seem to be any kind of moral compass here."
Researcher Alice Crites contributed to this report.