By James V. Grimaldi and Susan Schmidt
Washington Post Staff Writers
Friday, October 13, 2006 1:32 AM
Five conservative nonprofit organizations, including one run by prominent Republican Grover Norquist, "appear to have perpetrated a fraud" on taxpayers by selling their clout to lobbyist Jack Abramoff, Senate investigators said in a report issued yesterday.
The report includes previously unreleased e-mails between the now-disgraced lobbyist and officers of the nonprofit groups, showing that Abramoff funneled money from his clients to the groups. In exchange, the groups, among other things, produced ostensibly independent newspaper op-ed columns or news releases that favored the clients' positions.
Officers of the groups "were generally available to carry out Mr. Abramoff's requests for help with his clients in exchange for cash payments," said the report, issued by the Senate Finance Committee. The report was written by the Democratic staff after a yearlong investigation and authorized by the Republican chairman, Sen. Charles E. Grassley (R-Iowa).
Abramoff has pleaded guilty to fraud and conspiracy and could go to prison as early as next month. Prosecution and defense lawyers jointly filed papers yesterday asking a judge to recommend that he be sent to a federal facility in Cumberland, Md., to make it easier for him to cooperate with the ongoing probe. The investigation has resulted in one conviction and seven guilty pleas -- including one from a lawmaker, Rep. Robert W. Ney (R-Ohio), who is to appear today before a federal judge in the District.
The Senate report released yesterday states that the nonprofit groups probably violated their tax-exempt status "by laundering payments and then disbursing funds at Mr. Abramoff's direction; taking payments in exchange for writing newspaper columns or press releases that put Mr. Abramoff's clients in a favorable light; introducing Mr. Abramoff's clients to government officials in exchange for payment; and agreeing to act as a front organization for congressional trips paid for by Mr. Abramoff's clients."
The report bolstered earlier revelations that Abramoff laundered money through the nonprofits to pay for congressional trips and paid Norquist to arrange meetings for Abramoff's clients with government officials including White House senior adviser Karl Rove.
The groups named in the report are Norquist's Americans for Tax Reform; the Council of Republicans for Environmental Advocacy, which was co-founded by Norquist and Gale Norton before she became secretary of the interior; Citizens Against Government Waste; the National Center for Public Policy Research, a spinoff of the Heritage Foundation; and Toward Tradition, a Seattle-based religious group founded by Rabbi Daniel Lapin.
E-mails released by the committee show that Abramoff, often with the knowledge of the groups' leaders, exploited the tax-exempt status and leveraged the stature of the organizations to build support among conservatives for legislation or government action sought by clients including Microsoft Corp., mutual fund company DH2 Inc., Primedia Inc.'s Channel One Network, and Brown-Forman, maker of Jack Daniel's whiskey.
A spokesman for Norquist, John Kartch, called the report "political nonsense" pushed by Democrats close to the midterm elections.
Norquist's attorney, Cleta Mitchell, had told the Senate panel that, as long as Americans for Tax Reform spends funds in keeping with its general purpose, "there is no 'abuse' of ATR's tax status." Officials with the Council of Republicans for Environmental Advocacy denied wrongdoing. Citizens Against Government Waste said the group did not abuse its tax status and always adhered to long-held positions.
Amy Ridenour of the National Center acknowledged in an interview with investigators that donations can have some sway with think tanks but denied that they were made in exchange for positions.
Sen. Max Baucus (Mont.), the Finance Committee's ranking Democrat, called on the IRS and the FBI to investigate. "These groups' dealings with Jack Abramoff certainly violated the spirit, and perhaps the letter, of the laws that give charitable and social welfare organizations a break for the good work they're supposed to do," Baucus said in a statement.
A spokeswoman for Grassley said the chairman did not co-write the report because he had hoped it would include a broader range of groups that he believes also breached their tax status. A Baucus aide said the Democratic staff did not object to a broader review.
The Abramoff scandal has bruised the image of Norquist, a friend of Abramoff's since their days in the College Republicans. Often consulted by Rove, Norquist for decades has convened a key Wednesday morning strategy session for conservative leaders, lobbyists and Republican lawmakers.
Abramoff traded on Norquist's cachet, at one point referring to him in an e-mail as a "hard-won asset" of his lobbying empire. In exchange for Norquist's opposition to taxes on Brown-Forman products, Norquist recommended that a $50,000 donation be made to Americans for Tax Reform, according to an Abramoff e-mail.
"What is most important, however, is that this matter is kept discreet," Abramoff wrote to a colleague at the Preston, Gates & Ellis law firm. "We do not want the opponents to think that we are trying to buy the taxpayer movement."
The e-mails show that Abramoff and Norquist explicitly discussed client donations to Norquist's group in exchange for Norquist's support. The group's advocacy "appears indistinguishable from lobbying undertaken by for-profit, taxable firms," the report said.
Among those who agreed to donate money for an opinion piece was DH2, which in 2004 pushed for tax breaks for its customers.
E-mails show that DH2 understood that Norquist's help came with a price tag. The tab was sent to DH2's managing director, Robert S. Rubin.
"I told Rubin he needs to round up some $$$ for ATR," wrote lobbyist Michael E. Williams to his boss, Abramoff.
"Get the money from Rubin in hand," Abramoff replied, "and then we'll call Grover."
How much, Williams asked.
"50K," Abramoff wrote.
Abramoff e-mailed Norquist on Feb. 10, 2004: "I have sent over a $50K contribution from DH2 (the mutual fund client). Any sense as to where we are on the op-ed placement?"
Replied Norquist: "The Wash Times told me they were running the piece. . . . I will nudge again."
The Washington Times has published about 50 Norquist op-eds since 1993 but apparently none on mutual funds. Norquist did write a letter in April 2004 to a congressman praising him for sponsoring "legislation that would finally allow mutual fund shareholders to defer their capital gains tax" and pledging that his group "is committed to helping you pass this legislation."
Norquist wrote an op-ed piece, published in the Washington Times, as part of an extensive Abramoff campaign for Channel One, which broadcasts educational programming and advertising into public school classrooms. An Abramoff e-mail to Norquist offered him $1,500 for an op-ed, and another e-mail exchange suggested up to $3,000 to buy an "economic analysis."
The Council for Republican Environmental Advocacy, founded by Norquist and Norton, who resigned as interior secretary earlier this year, also appeared to have been used "as an extension of Mr. Abramoff's lobbying organization," the report said.
Abramoff directed his client Indian tribes to donate a total of about $500,000 to the group, telling them that the donation was a way to cultivate Norton at the Interior Department, which oversees the tribes and their casinos. E-mails show that Abramoff told the tribes that they would be CREA's "trustees" and that Norton would "host" a series of CREA dinners. Interior Department documents obtained by The Washington Post suggest that Norton was an invited guest at a CREA dinner, not a host.
Research editor Alice Crites contributed to this report.