U.S. Says Abramoff Tipped Tyco to GSA Move

By Susan Schmidt and James V. Grimaldi
Washington Post Staff Writers
Saturday, January 28, 2006

Lobbyist Jack Abramoff gave his client Tyco International an early warning in 2003 that the government was about to suspend Tyco's federal contracts -- inside information he received from a General Services Administration official now under indictment, federal prosecutors alleged yesterday.

David H. Safavian, who has been charged with obstructing the Abramoff corruption investigation, alerted Abramoff in November 2003 that the GSA was about to suspend the contracts of four Tyco subsidiaries, prosecutors said in court papers. Safavian provided "sensitive and confidential information" about internal GSA deliberations, as well as advice about how to get around the suspension, the prosecutors said.

Abramoff has pleaded guilty to fraud and conspiracy and is cooperating with a federal investigation into political corruption. He has been accused of improperly obtaining inside information from contacts in Congress and executive branch agencies.

George Terwilliger, Tyco's attorney, said yesterday that Abramoff's tip was of substantial benefit to Tyco but was unsolicited. Tyco's senior lawyer, Timothy Flanigan, contacted the GSA and "asked for an opportunity to address the suspension issue on the merits," Tyco said in a statement yesterday.

Tyco said it turned the matter over to its law firm, McKenna, Long and Aldridge, which persuaded the agency that the suspension was unwarranted. The GSA had been concerned about the alleged criminal misconduct of former Tyco executives, but the company told the agency that it had brought in new management, Terwilliger said.

GSA spokesman Neil Franz said Tyco's Nov. 10, 2003, notice of suspension was lifted before it was enforced because Tyco "was very responsive in providing the information GSA needed."

Abramoff "was not retained or engaged on this matter" by Tyco and was not paid for it, Terwilliger said. "I have asked and been assured by line-level prosecutors that neither Tyco nor anyone at the company is being investigated or is suspected of any wrongdoing."

Flanigan, a former deputy White House counsel under now-Attorney General Alberto R. Gonzales, withdrew his nomination to be deputy attorney general in part because Tyco had surfaced in the Abramoff investigation. Terwilliger said Flanigan was traveling and unavailable for comment.

Abramoff in May 2003 solicited Tyco as a client on a tax issue, according to documents filed with his plea agreement earlier this month. Prosecutors said Abramoff recommended that the company hire both him and a consulting firm, GrassRoots Interactive, but hid from Tyco that GrassRoots Interactive was his business. In May and June 2003, Tyco paid GrassRoots Interactive about $1.8 million, of which about $1.7 million went to Abramoff and entities he controlled, prosecutors said. Abramoff's firm, Greenberg Traurig, has reimbursed Tyco.

Safavian, former GSA chief of staff, is to stand trial in April on charges of making false statements to investigators about a 2002 golf trip to Scotland with Abramoff.

Yesterday's filing said the government intends to use the Tyco information to show that Safavian had a motive to lie to government ethics officials about the nature of his relationship with Abramoff.

Barbara Van Gelder, Safavian's attorney, was critical of the filing. "This is really trash-talk trial tactics on the part of the government. It's designed to muddy David's reputation, to try to link him to other investigations. . . . It has no relevance at all to this case."

In the summer and fall of 2002, Safavian also guided Abramoff regarding a policy issue of interest to his tribal clients, who wanted to invest in the Old Post Office building in downtown Washington, according to charging papers filed with Safavian's indictment.

At the same time, Abramoff's associate Neil Volz approached two members of Congress -- House Transportation Committee Chairman Don Young (R-Alaska) and Rep. Steven C. LaTourette (R-Ohio) -- and asked if they could write a letter on the policy. On Sept. 12, Young and LaTourette sent the letter to the head of the GSA. The existence of the letter was first noted in charging papers last year, but the identify of the authors was reported by the newspaper Roll Call this week.

LaTourette's spokeswoman said the letter reflected her boss's policy priorities for boosting small businesses. Young's spokesman did not answer questions.

About a month after the letter was sent, Young received $7,000 in contributions from two of Abramoff's tribal clients.

Staff writer Thomas B. Edsall contributed to this report.

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