Justice Department News Conference on Abramoff Guilty Plea
Tuesday, January 3, 2006; 5:06 PM
SPEAKERS: ALICE FISHER, ASSISTANT ATTORNEY GENERAL, CRIMINAL DIVISION, U.S. DEPARTMENT OF JUSTICE
EILEEN O'CONNOR, ASSISTANT ATTORNEY GENERAL, TAX DIVISION, U.S. DEPARTMENT OF JUSTICE CHRIS SWECKER, ASSISTANT DIRECTOR, CRIMINAL INVESTIGATIVE DIVISION, FBI
MARK EVERSON, COMMISSIONER, IRS
MICHAEL MASON, ASSISTANT DIRECTOR, WASHINGTON FIELD OFFICE, FBI
NOEL HILLMAN, CHIEF, PUBLIC INTEGRITY SECTION, CRIMINAL DIVISION, FBI
PAUL PELLETIER, CHIEF, FINANCIAL FRAUD SECTION, CRIMINAL DIVISION, FBI
FISHER: Good afternoon. I'm joined here today with Paul Pelletier, the chief of the fraud section; Mike Mason, SAC of WFO; Chris Swecker, the assistant director of the criminal division of the FBI; Eileen O'Connor, assistant attorney general of the Tax Division here at the Department of Justice; Mark Everson, commissioner of the IRS; and Noel Hillman, chief of the public integrity section of the criminal division.
Earlier today in U.S. District Court here in Washington, D.C., former lobbyist Jack Abramoff pled guilty to three separate felony offenses: conspiracy, mail fraud and tax evasion.
Abramoff has agreed to cooperate in the ongoing public corruption probe led by the Department of Justice.
In court today, Abramoff admitted to a series of schemes which fall into three categories which I'm going to describe. These schemes involved Abramoff's use of his D.C.-based lobbying practice through which Abramoff corrupted government officials and defrauded his own clients.
First, Abramoff admitted to conspiring with his former business partner, Michael Scanlon, to defraud four Native American Indian tribes. These tribes hired Abramoff to provide lobbying and other services related to the tribes' interest in casino gaming business.
Scanlon, you'll recall, pled guilty to corruption and conspiracy charges in November. Scanlon is also cooperating with the government's investigation.
Scanlon and Abramoff agreed to defraud their tribal clients in a scheme they jokingly referred to between themselves as the "Gimme Five" program.
Let me explain to you how this program worked. As described in the court papers filed today, Abramoff would recommend that his tribal clients hire a company run by Scanlon, Capitol Campaign Strategies, or CCS, to perform grassroots or public relations services on behalf of the tribes.
But the tribes weren't getting the whole picture. Abramoff did not refer tribal clients to CCS solely to further the interest of the tribe. Rather, he did so to further his own interest and to line his own pockets in ways which were fraudulent and illegal.
As they have both now admitted, Abramoff and Scanlon agreed that Scanlon would pay secret kickbacks of 50 percent back to Abramoff each time a tribal client hired CCS. These secret kickbacks ran into the millions of dollars and were never disclosed to the clients.
But Abramoff's fraud on his tribal clients did not stop there. In one other instance, Abramoff was so bold as to take fees to assist one client when he was actually working for another client to defeat the first client's interests.
Second, Abramoff admitted today to his participation in an extensive corruption scheme. Abramoff gave things of value to public officials, including foreign and domestic trips, campaign contributions, excessive meals and entertainment, and other things of value, all with the intent and at times with the understanding that the public official would act to benefit Abramoff or his client.
The things of value Abramoff provided to government officials included an all-expense paid trip to Scotland to play golf on a world- famous course, tickets and travel to the Superbowl in Florida, tickets for concerts and other events in Washington, repeated and regular meals at his upscale restaurant, and campaign contributions.
Abramoff provided these things of value with the intent and often with the understanding that his clients would receive the official action they wanted.
As admitted by Abramoff, his actions often produced the official influence that he sought. For example, as he admitted today, Abramoff had a congressman insert statements in the Congressional Record, had a congressman endorse a wireless telephone contract for the House of Representatives, had a congressman agree to seek passage of legislation to help Abramoff's clients.
FISHER: Government officials and government action are not for sale. The Justice Department will aggressively investigate and prosecute these types of cases which have a devastating impact on the public's trust of government.
We will not shy away from that responsibility no matter where the trail leads.
I will note that, while Abramoff engaged in the business of lobbying, his activities went far beyond lawful lobbying to the illegal practice of paying for official acts. Lawful lobbying does not include paying a public official a personal benefit with the understanding -- explicit or implicit -- that a certain official act will occur.
That's not lobbying; that's a crime.
The third aspect of Abramoff's illegal conduct as reflected in his admissions today is tax evasion. Abramoff profited tremendously from the illegal arrangements outlined today, receiving an estimated $25 million in undisclosed kickbacks and other fraudulently attained funds.
Abramoff failed to report or pay taxes on these and other illegally obtained funds.
As Abramoff's crimes are serious so, too, are the consequences he now faces. As provided in his plea agreement, the federal sentencing guidelines call for a sentence of between nine and a half to 11 years from Abramoff's admitted criminal conduct.
If Abramoff cooperates truthfully and completely with the government's investigation and otherwise complies with the terms of his agreement with us, he may receive a reduction in his sentence at the discretion of the sentencing court.
And Abramoff will be ordered to pay a hefty price for his crime -- approximately $26.7 million in restitution and taxes.
As the assistant attorney general in charge of the Criminal Division, combating public corruption is a top priority of mine. I am proud to report that over the past three years, there has been a near 90 percent increase in the number of cases prosecuted by the Public Integrity Section of the Criminal Division.
We have been doing more to combat public corruption at every level of government, and we will continue to do more.
FISHER: Now, there are a lot of people who have worked on this case and will continue to work on this investigation as it moves forward, and I'd like to thank them.
The Public Integrity Section and its chief, Noel Hillman, played an important role in providing leadership to this complex investigation; the Fraud Section of the Criminal Division, headed by Paul Pelletier; the Justice Department's Tax Division, headed by Eileen O'Connor; along with prosecutors from the U.S. attorneys office in Miami for their valuable role in this case.
I thank them.
And of course I want to acknowledge the great work and the teams of investigators from the FBI, the Department of Interior, the IRS and the inspector general at the General Services Administration.
Everyone has worked so closely to help uncover the facts and move this significant case forward.
With that, I'd like to turn it over to Eileen O'Connor, assistant attorney general of the Tax Division.
O'CONNOR: Thank you, Alice.
Good afternoon, ladies and gentlemen.
Assistant Attorney General Fisher has outlined for you the crimes to which Mr. Abramoff pleaded guilty earlier today. That plea was the result of determined efforts by United States investigators and attorneys to vindicate the trust the American people deserve to have in the institutions of their government, including the tax system that supports it.
The Justice Department's Tax Division is committed to prosecuting all tax crimes, including those described in the information to which Mr. Abramoff pled guilty earlier today: tax evasion, using in part charitable organizations to conceal the income.
These sorts of tax evasion crimes will be prosecuted with exactly as much as energy as tax evasion crimes involving offshore accounts or illegal tax shelters. The federal treasury and all the honest taxpayers who pay into it are the victims of these tax crimes.
With 2005 just drawing to a close, people around the country are assembling their records from last year so that they can prepare and file accurate and timely returns of their income with the Internal Revenue Service.
I'd like them to know that it is the mission of the more than 500 men and women of the Tax Division of the Department of Justice to make sure that the tax laws are fairly, uniformly and vigorously enforced.
Tax evasion is a crime.
O'CONNOR: People who enrich themselves illegally compound their crimes by failing to report taxes on their ill-gotten gains.
In closing, I thank Stephanie Evans, the Tax Division trial attorney who worked on this case, Bruce Salat (ph), her section chief, Dana Ventay (ph), the Criminal Division's deputy assistant attorney general, along with the Internal Revenue Service's criminal investigators for their dedication to the teamwork necessary to investigate and prosecute this and other tax crimes.
Now you'll hear from Commissioner of the Internal Revenue Service Mark Everson.
EVERSON: Thank you, Eileen, Alice.
Tax evasion, all to often, goes hand in hand with kickbacks and other crimes, motivated by greed. The IRS supports the Department of Justice in its investigations.
Tax charges can bring to bear the full force of the government's criminal statutes. Beyond the illegal evasion of $1.7 million in taxes owed, one of the most disturbing elements of this sordid story is the blatant misuse of charities in a scheme to peddle political influence.
The mixing of politics, money and charities, simply stated, is a bad cocktail.
At the IRS, one of our four enforcement priorities is combating abuse of tax-exempt entities. Just as we need to vigilantly guard the integrity of our political institutions, so, too, must we protect the integrity of charities.
If Americans lose faith in charitable organizations, they will stop giving and those in need will suffer.
And now I turn to Chris Swecker, who oversees criminal investigations at the Bureau.
SWECKER: Good afternoon. Just a brief statement. In March of 2004, the FBI initiated investigations of lobbyists Jack Abramoff and public relations specialist Michael Scanlon regarding allegations of schemes to defraud American Indian tribes throughout the United States, corrupt relationships with legislative officials, income tax evasion and money laundering.
The scope and complexity of the investigations were considerable, involving over a dozen FBI field offices, requiring hundreds of interviews and the forensic analysis of thousands of documents and financial records.
SWECKER: Additionally, we worked portions of this matter jointly with the Department of Interior inspector general, IRS and the GSA Office of Inspector General.
These agencies continue to support the ongoing investigation. The FBI investigated significant resources into these investigations because public corruption is our top criminal priority. In fact, the FBI has devoted more than 200 additional special agents to public corruption investigations since 2001.
The American people have a right to expect honest services from their public officials. And our public corruption program is determined to prevent abuse of the public trust.
Today's plea agreement is just one of many recent successes across the country that the FBI has had in public corruption matters. As this and other investigations have shown, no criminal resources of the FBI will be spared in support of this important mission.
Thank you, and I'll turn it back over to Alice.
FISHER: OK, we'll take a few questions.
QUESTION: Yes. Why aren't the officials being named at this point if you're so concern about public corruption and the image sent out? Why aren't we naming the officials involved?
FISHER: Well, we name officials in indictments and public documents when it's the appropriate time. And this investigation continues. The charges outlined in the plea agreements and other documents filed today reflect the charges that are brought at this time.
QUESTION: How fast now, since you have this, since you've secured this testimony of this key person, how quickly do you think you can unravel the whole universe of people who have either been named or implicated?
And when you talk about an understanding between the money and official acts, how was that understanding laid out? Was it explicit or will we get a non-comment on it?
FISHER: Well, I'm not going to comment beyond what's in the documents, which sets forth the pattern of things given of value and the official acts that it was intended to influence.
As far as the timing of this investigation, we are committed to putting forward the resources. You just heard from the FBI and this investigator -- the investigators here that are putting forward the resources to follow through with this investigation, however long it takes, wherever it leads. But we're moving very quickly.
QUESTION: You mentioned an increased crackdown on public corruption, and so did Chris Swecker. Can you give us some context? Is there more public corruption going on now? Or are you just paying more attention to it? I mean, can you compare it to years earlier?
FISHER: Well, I think that what I said in my statement is that over the past three years there's been almost a 90 percent increase within the Criminal Division at the public corruption cases that we have prosecuted and that we have seen.
We have been focused on it. We are doing a lot with public corruption, whether it's at the federal, state or local level. And we will continue to do that.
QUESTION: Will the Indian tribes be receiving any of the restitution, any of the $25 million?
FISHER: The restitution order will be set forth by the probation office and in the court.
But he will be paying approximately $25 million in restitution, according to the plea agreement.
QUESTION: On that question, how confident are you that he has the funds to pay the $25 million or $26-point-whatever million? And what's the rough timetable by which he has to do that?
FISHER: That will all be worked out with the probation officer in how the funds are allocated and over what time he will be paying in.
FISHER: He will be paying the money. It's part of the plea agreement. So, yes.
QUESTION: In the scale of public corruption cases you've worked on in the last few years, how significant is this case? And can you comment on how vulnerable representative number one is at this point?
FISHER: Well, I think that this case is significant and it shows -- and our actions leading up to in this case have already shown that the corruption scheme with Mr. Abramoff is very extensive and we will continue to follow it wherever it leads.
But we've also had the plea of Michael Scanlon, his business partner. There's also pleas being taken in Florida. This case is very active and ongoing.
QUESTION: Can you address how broad the investigation is now? How many people are in your sight? There's talk there might be a couple of dozen lawmakers and staff.
FISHER: Well, I'm hesitant to put any numbers on it.
There are several different field offices working on this case, I think as you heard from Mr. Swecker. There are many prosecutors and many investigators looking at this case. And, again, we're going to follow this wherever it goes.
Public corruption is a priority for the Criminal Division. This case is significant. We are going to expend the resources that are necessary to make sure that people know that government is not for sale.
QUESTION: Could you comment -- just to follow up -- on how vulnerable is representative number one?
FISHER: I'm not going to comment beyond the document signed today about what the charges are.
But they -- as outlined in the plea agreement and the factual basis that was signed and filed in court today, it lays forth, again, a pattern of things given of value in exchange for and with the intent to influence official acts.
QUESTION: The information describes "representatives," plural, as being part of this, yet only "Representative One" is actually named in the documents. Is it safe to say that more than one representative is an active target of the investigation?
FISHER: Well, I think that what's set forth in the documents speak for themselves as far as what's being charged today and what Mr. Abramoff is pleading guilty to. And I'm not going to comment beyond that.
QUESTION: What's going on with the Florida charges against Mr. Abramoff?
FISHER: I think that Florida has filed a change in plea status conference for tomorrow. And I'd ask that you follow up with Florida on what their case is.
QUESTION: Mr. Abramoff has said he would cooperate with the investigation. How much information has he given you all so far and how cooperative has he been?
FISHER: Well, he's given us the information that he's admitting to in these documents, certainly. And that cooperation that he is going to be providing as part of the plea agreement will continue.
QUESTION: What about beyond that? His lawyer is saying he's been talking to you all for 18 months. Has it been that extensive? Or how serious has this been (inaudible) over what kind of time period?
FISHER: Well, certainly, we have been engaged in a dialogue with Abramoff. And the acts that are outlined in these documents today describe some of the things that are part of the information that he's provided us.
But we have not attempted to list each and every statement that Mr. Abramoff has provided to us in these documents. We couldn't possibly do that.
QUESTION: Do you have any e-mails and other documents and that kind of stuff?
FISHER: He has provided documents. And he will continue to provide documents as part of the cooperation agreement. It's part of the obligation.
QUESTION: Has the IRS moved against any of the charities at this point or any actions there?
EVERSON: I can't comment on if -- Section 6103 of the code precludes me from making any comment on actions that we take until they are taken and a charity is de-listed, if it is de-listed.
QUESTION: There (inaudible) today that said that the charges in Florida will be concurrent with the charges here. Would that have the effect of giving him a free pass in Florida? And why was a decision made to do that?
FISHER: Well, I think that the sentence that he will receive is described at length in the plea agreement today. And the plea agreement in Florida, which may be filed at another time, I can't comment on.
So I'm only going to comment on the sentence that is here today. The agreement here does talk about concurrent time. That is appropriate for related conduct. Overall, what this agreement provides is that he will face 9.5 to 11 years, based on the sentencing guidelines.
And we feel that that appropriately accounts for the criminal activity that Mr. Abramoff engaged in.
QUESTION: Nine and a half to 11 years per count?
FISHER: That is the total for the conduct that he is charged with today in this plea agreement, yes.
FISHER: As long as the investigation continues.