By Peter H. Stone, National Journal
© National Journal Group Inc.
Saturday, March 27, 2004

As presidential adviser Karl Rove set up shop in the West Wing in 2001, he was looking for an assistant to serve as the trusted gatekeeper of his new fiefdom. Superlobbyist and Republican fundraiser Jack Abramoff was happy to lend a hand. Abramoff knew just the right person for the job: his own assistant, Susan Ralston. She interviewed with Rove and got the position.

Jack Abramoff has gained prominence as a rainmaker lobbyist and elite GOP fundraiser. But probes into his business practices threaten to knock him off his perch.

For a staunch conservative and smooth GOP operative like Abramoff, losing a valuable aide was well worth the opportunity to ingratiate himself with the president's senior political adviser. To be sure, Abramoff already had cachet at the Bush White House, with Republicans on Capitol Hill, and among conservative movement leaders. And over the past three years, he has accrued even more clout.

An active fundraiser for George W. Bush's 2000 election race, Abramoff has done even better in the 2004 campaign, raising more than $100,000 and becoming an elite "Pioneer" in the president's re-election drive. For years, Abramoff has been a generous donor and key fundraiser for powerful GOP members of Congress, notably House Majority Leader Tom DeLay, R-Texas. In the 2004 election cycle, Abramoff and his wife, Pam, have contributed $83,000 to Republicans, landing themselves at No. 93 on the nationwide list of individuals who have donated to either political party, according to the nonpartisan Center for Responsive Politics. Nine other Washington lobbyists are higher on that list.

For almost a quarter-century, Abramoff has counted among his friends and allies anti-tax activist Grover Norquist and grassroots strategist and former Christian Coalition head Ralph Reed. An Orthodox Jew, Abramoff has moved easily in conservative circles since the early 1980s, when he was chairman of the College Republican National Committee.

And as a high-profile lobbyist over the past few years, Abramoff was the engine that transformed a midsize lobbying practice at the law firm Greenberg Traurig into one of K Street's top money machines. Since early 2001, when Abramoff joined Greenberg Traurig's Washington office -- bringing with him six colleagues and several high-paying clients -- the firm's annual lobbying revenues have soared, exceeding $25 million in 2003 and landing the firm at No. 4 in revenues among all K Street firms.

Among Abramoff's and Greenberg Traurig's highest-paying clients have been four Indian tribes with lucrative gambling operations: the Agua Caliente of California, the Louisiana Coushattas, the Mississippi Choctaws, and the Saginaw Chippewas of Michigan.

Not only have the tribes paid an average of $5 million a year in fees to the firm, but at Abramoff's urging, they have also poured millions more into GOP campaign coffers and conservative groups' causes.

Small wonder that Abramoff -- who has said he charges most of his clients at least $500 an hour -- has become a GOP star among Washington lobbyists. Abramoff has been "popular with people in the administration," says another leading GOP lobbyist and fundraiser. "He's worked hard to raise money for various political committees and campaigns. He's at the very top level of political fundraising in the U.S." This source speculated that Abramoff is "No. 1 for congressional Republicans in raising Jewish money."

But late last month, Abramoff's image -- and his access to power brokers -- took a big hit. Sen. John McCain, R-Ariz., announced that he would hold a hearing after stories in The Town Talk newspaper in Alexandria, La., The Washington Post, and other news outlets questioned the huge lobbying fees that the Indian tribes paid to Abramoff and Greenberg Traurig. Some tribal leaders charged that the tribes received little in return for their exorbitant payments to Greenberg Traurig; that the tribes couldn't trace where some of the lobbying fees went; and that, in at least one case, funds were misused when a lucrative contract went to an Abramoff associate.

On March 2, Abramoff abruptly resigned from Greenberg Traurig, and now he's embroiled in what's shaping up as a legal and political fight to salvage his reputation.

Abramoff's rise as a power broker and his current fall from grace is an attention-getting tale of ambition, ideology, and wheeling and dealing, even in the rough-and-tumble world of Washington lobbying.

The lobbyist's travails are causing heartburn for some of his conservative allies, including DeLay, and perhaps the Bush campaign. When asked about Abramoff's troubles, DeLay distanced himself, telling reporters, "If anybody is trading on my name to get clients or to make money, that is wrong and they should stop it immediately."

One reason for the touchiness is that the controversy has also ensnared Michael Scanlon, a former aide to DeLay who worked with Abramoff at Greenberg Traurig before setting up his own grassroots firm, Capital Campaign Strategies. Abramoff had recommended Scanlon's company to the tribes, and together, over a three-year period, Greenberg Traurig and Scanlon charged the four tribes some $46 million, two-thirds of which went to Scanlon's firm, according to The Post.

Abramoff also urged the tribes to contribute to conservative groups that appeared to have little relevance to Indian issues. One example was an obscure organization that Scanlon formed in 2001, called the American International Center. Listed at a Scanlon-owned property address in Rehoboth Beach, Del., the center, which appears to be defunct, has billed itself on its Web site as an "international think tank." The Coushatta tribe donated $566,000 to the center.

Meanwhile, the FBI reportedly has been interviewing tribal members in Michigan and Louisiana about possible spending irregularities involving the work done by Abramoff and Scanlon. One issue, according to news reports, is whether funds were improperly used to help elect a tribal council in Michigan.

For its part, Greenberg Traurig has said that some of Abramoff's "personal transactions and related conduct" were "unacceptable to the firm." The law and lobbying giant has hired Henry Schuelke III of the law firm Janis Schuelke & Wechsler to conduct an inquiry and has said that after the investigation, Greenberg Traurig could take "additional action that may be appropriate."

Abramoff has said he is dismayed at the way Greenberg Traurig characterized his departure, calling it "regrettable." And he has said his resignation from the firm was based on "our mutual decision to ensure that recent events did not interfere with the representation of our clients." In a telephone interview, he added: "I think any objective analysis of the work we did couldn't but reach the conclusion that our work was immensely beneficial" for the Indian clients.

But the current probes aren't Abramoff's only headaches. He is involved in ongoing litigation in Florida over a 2000 deal to buy SunCruz Casinos, a floating gambling operation. A federal judge has ruled that Abramoff and a partner never actually made the $23 million down payment on the $147 million purchase of SunCruz.

In addition, National Journal has learned that in order to avoid public disclosure, an anonymous Malaysian client of Abramoff's in 2001 and 2002 used Scanlon's American International Center as a conduit for paying fees to Greenberg Traurig, according to several sources. The work included setting up meetings and a luncheon on Capitol Hill for the prime minister of Malaysia, and arranging a trip to Kuala Lumpur in January 2002 for two members of Congress and two Greenberg partners.

In another instance, sources said, despite federal restrictions against providing services to a country under economic sanctions by the United States, Abramoff tried to do a deal in late 2001 or early 2002 with the Sudanese ambassador to Washington. Meeting at the Washington Redskins' FedEx Field, the lobbyist and the ambassador discussed a proposal for Greenberg Traurig to represent Sudan in Washington. The deal was never sealed, but sources said that Abramoff tried to convince the ambassador that he could help quash attacks by the Christian Coalition and other evangelical groups that were accusing Sudan of religious persecution.

In an interview, Sudanese Ambassador Khidir Ahmed said he recalled that the meeting with Abramoff was "very casual," and that he didn't pay much attention, because there was little chance that any deal would pass muster with the federal government. "I don't want to get people in trouble with the American legal system," he said.

Despite his difficulties, Abramoff is moving ahead and seems to be capitalizing on his connections and rainmaking talents. On March 23, it was announced that Abramoff had inked a deal to work as a business development consultant, not a lobbyist, for Cassidy & Associates. It's unclear how much, if any, of his Greenberg Traurig business -- estimated at around $10 million a year -- Abramoff might bring to Cassidy. Further, at least three of Abramoff's former colleagues at Greenberg Traurig -- Todd Boulanger, Jim Hirni, and Shana Tesler -- are joining Cassidy & Associates as lobbyists.

Pushing the Envelope
Interviews with some two dozen associates and friends of Abramoff's paint a picture of a hard-driving, entrepreneurial conservative and influence merchant who tends to push the envelope. "He almost has two personalities," said one conservative K Street comrade. "One is conservative, orthodox, and straight; the other is no-holds-barred and anything-goes. He's very aggressive in trying to get clients."

Others point to Abramoff's penchant for taking big gambles with clients. "I think for someone as smart as Jack, it's shocking that he would take such risks," said one consultant who knows Abramoff well. "I think it was greed."

Dubbed "Casino Jack" for his gambling work, Abramoff is a larger-than-life character on K Street whose work and passions straddle the conservative movement, lobbying, and other interests. He owns two well-known Washington eateries: Stacks, a Jewish deli; and Signatures, a high-end fundraising venue. He's also an avid sports fan who has used pricey box seats at FedEx Field and D.C.'s downtown arena, the MCI Center, to wine and dine clients and politicians. Abramoff has also championed Jewish schools and founded the Eshkol Academy in Columbia, Md.

Old friends of Abramoff's defend his record and argue that political vendettas are fueling the congressional probe. One supporter is Rabbi Daniel Lapin, who heads Toward Tradition, a group that Abramoff co-founded, which works to build bridges between American Jews and Christians. Lapin says the charges against Abramoff amount to a "politically driven witch-hunt against the extremely effective conservative matrix of alliances constructed and nurtured by Jack." Lapin describes Abramoff as "one of the most creative, charismatic, and driven people I've ever known."

Norquist, who heads the influential Americans for Tax Reform, also sees political motives in the anti-Abramoff camp. In his view, McCain, who is leading the Senate probe, "hates Bush and hates DeLay; and Jack is a friend and ally of both." Norquist adds that Abramoff has sparked a "certain amount of jealousy on K Street."

Marshall Wittmann, McCain's communications director, said, "The senator does not hate these men, but he does hate corruption. Consequently, he will investigate serious allegations of misconduct."

On the House side, longtime gambling opponent Rep. Frank Wolf, R-Va., asked the Justice Department to look at the allegations about Abramoff's and Scanlon's work and to determine whether any laws had been broken. "There's a real concern that Indians are being exploited," Wolf said. The FBI has told Wolf that it is investigating.

Meanwhile, leaders of anti-gambling groups are blasting Abramoff for his high fees. "Abramoff is a corporate Republican; he's not a conservative Republican," said the Rev. Tom Grey, executive director of the National Coalition Against Gambling Expansion. "I don't see him helping tribes that don't have gambling. That's because there's no money."

In the interview, Abramoff defended his work and boasted that, "on a macro and micro level," his work was "amazingly successful" in terms of helping the tribes protect their sovereignty and avoid excessive taxation of their gambling operations. Greenberg Traurig was "very instrumental in educating many members of Congress" and other policy makers on tribal issues, Abramoff said.

Reflecting on his personal troubles, Abramoff said he's received enormous support from his family and friends, and that he draws strength from his religious faith. "I am hopeful that people will view my life's work in a fuller context," he said, "and that -- like a more righteous man than me, Job -- everything will work out for the best."

Becoming a Rainmaker
Raised in Margate, N.J., and Beverly Hills, Calif., Abramoff graduated magna cum laude from Brandeis University and earned a law degree from Georgetown. He cut his teeth in conservative politics in the early 1980s. It was during his four-year stint as chairman of the College Republican National Committee that he first worked closely with Reed, who was his first executive director at the committee, and then with Norquist.

"Ralph and Grover and I have worked together for decades to promote free markets and U.S. strength at home and abroad," Abramoff said.

His career took a detour in the mid-1980s, when he got into the film business, producing the anti-Communist movie Red Scorpion in 1989. Not long after the Republicans captured Congress in the 1994 elections, Abramoff, then as a lobbyist with Preston Gates Ellis & Rouvelas Meeds, developed his forte as a rainmaker.

Abramoff's business took off as he signed up such lucrative clients as the Commonwealth of the Northern Mariana Islands and the Mississippi Choctaws, both of which he aggressively championed on Capitol Hill and in conservative circles.

Abramoff arranged for members of Congress and staffers to take free trips to visit his clients, and he achieved results in part by working closely with key lawmakers. DeLay and a number of Hill aides took trips to the Marianas, for instance, and the Texan touted the islands -- which had an unsavory reputation for sweatshops and low wages -- as bastions of free enterprise. In a high-stakes fight in 1995, Abramoff and conservative GOP members teamed up to block Democratic attempts to end the commonwealth's exemptions from American wage and immigration laws.

Abramoff also delivered for the Choctaws. In 1997, he worked with several conservatives, including DeLay, to help defeat a bill by former House Ways and Means Chairman Bill Archer, R-Texas, that would have taxed Indian casinos. Over the years, DeLay and his staffers made trips to visit Choctaw casinos and hotels.

Further, Abramoff promoted his clients' causes at Norquist's famed Wednesday get-togethers of conservative leaders, lobbyists, and Capitol Hill allies. Some more-moderate conservatives at the gatherings were shocked by the prominence given to Abramoff's clients. One disillusioned conservative said in an interview that the Marianas were sold to the group as a place having "a sub-minimum wage that worked." This person added, "This was allegedly a meeting about conservative principles. Instead, it turned into a freak show. You had the gaming tribes and the sweatshop taskmasters. It was absurd. That's why I stopped going."

Some former members of Congress also recall that some of the trips to the Marianas backfired. Former House Majority Leader Dick Armey, R-Texas, now a lobbyist with the firm Piper Rudnick, said he was "kind of miffed" that his staffers didn't get clearance before they went on a Marianas junket that drew unfavorable publicity after pictures appeared of a golf outing on the islands.

Criticism aside, Abramoff built a team of lobbyists at Preston Gates that helped to put the firm in the top 10 among K Street lobbying shops. And as his star rose, Abramoff attracted plenty of attention from rival lobbying firms seeking to boost their revenues. In early 2001, he moved to Greenberg Traurig with a team of six lobbyists.

Not long after the jump, Abramoff expanded his Indian gambling practice, and he firmly established his reputation as a major rainmaker and as an effective pitchman for conservative clients and their causes.

"Jack has become an important figure in Washington because he represents a new and different kind of lobbyist," said Reed, who is now running the Bush re-election effort in five Southern states. Like lobbyists Haley Barbour and Ed Gillespie, Reed added, Abramoff "is more identified as a strategist and builder of the Republican majority than for his lobbying practice alone. His business is largely a means to that end."

Former colleagues and Hill aides tout Abramoff's mix of tenacity and clever framing of issues. "Everybody knows that Jack's style is scorched-earth," said one former partner. "It's very ideological and movement-conservative-based." One high-level GOP Hill aide added that Abramoff is adroit at "understanding the audience he's preaching his stuff to" and that he is "very effective at fundraising and philosophically appealing to members."

In addition to the Indian tribes, Abramoff built a practice that included a mix of well-known domestic clients like Tyco and Channel One, as well as foreign clients that included the government of Eritrea, a coalition of Islamic banks, and a Hong Kong entity called Rose Garden Holdings.

Millions From the Tribes
But Abramoff's skills were demonstrated in spades in his work for the tribes that operate casinos. From 2001 to 2004, Abramoff's work for four tribes -- the Coushattas, the Saginaw Chippewas, the Mississippi Choctaws, and Agua Caliente -- produced just over $15 million in revenues for Greenberg Traurig and another $31 million in fees for Scanlon, according to The Post. Abramoff says he touted Scanlon's Capitol Campaign Strategies to the tribes for handling state-based grassroots lobbying work.

Chris Petras, the former director of legislative affairs for the Chippewas, said, "Jack really shattered the traditional lobbying paradigm," adding that Abramoff helped make the tribe into a "serious policy player in Washington." According to Petras, who worked closely with Scanlon and Abramoff and who was ousted in a tribal council election earlier this year, the tribe received about $8.6 million in federal appropriations as a result of Abramoff's efforts.

To boost the tribes' clout, Abramoff pushed them hard to make bigger campaign contributions to friendly lawmakers and party committees, as well as to conservative allies. Abramoff explains that he suggests such tactics for all of his clients "as a way for them to further expand their political and policy reach." Overall, over the past three election cycles, the four tribes made about $2.6 million in political contributions, roughly two-thirds of which went to GOP candidates and committees, according to the Center for Responsive Politics.

The Chippewas, for instance, gave generously to a few members: An $18,000 contribution went to DeLay's political action committee -- Americans for a Republican Majority -- in February 2002; and on the same day, a $15,000 check went to the Republican National Committee. The tribe handed out other big checks in recent years to less-obvious groups: $10,000 each in May 2003 to the Kentucky GOP and the New Hampshire GOP, for example, according to tribal documents.

Conservative groups in Washington also reaped small windfalls. Norquist's group, for one, received a $25,000 check from the Chippewas. But late last year, the tribe elected a new council; it soon dumped Abramoff and Scanlon and ended the contract with Greenberg Traurig. Some members of the tribe hotly deny that they received significant benefits from their big lobbying payments to Greenberg Traurig -- which included a monthly retainer of $180,000.

For the Chippewas, critics note, new gambling competitors at racetracks, dubbed "racinos," are a big worry. Last year, the tribe paid Scanlon an estimated $6 million for his grassroots help in building a database to stop a pro-racino bill from moving through the Michigan Legislature. The bill passed the state House, and some tribal members fear it has a good shot at getting through the state Senate. "The bottom line is that the bill wasn't stopped," said one council critic. "The way I see it, we didn't get our money's worth."

Some Scanlon critics also charge that he had a role in electing the previous tribal council, which then turned around and hired him. The FBI is reportedly looking into whether tribal funds were used for this purpose.

In Louisiana, meanwhile, the Coushatta tribal council is sharply split about just what the tribe got for its big payments to Greenberg Traurig. One high-profile argument centers on an effort to fend off competition from the Jena Band of Choctaw Indians, which has tried to get into the casino business. The Jena tribe, which hired Patton Boggs for legal help in Washington, was trumped by some of Abramoff's efforts, which included getting a number of powerful members of Congress to sign letters to Interior Secretary Gale Norton.

Norton received letters from, among others, Mississippi's GOP Sens. Trent Lott and Thad Cochran, opposing a compact for the Jenas. In March 2002, Norton turned down the Jena Band's request. But last year, the Jena tried to get a compact for a different site, outside of the reservation. Four House leaders, including Speaker Dennis Hastert, R-Ill., and DeLay, signed a letter to Norton warning that approving a compact on a location off a tribe's reservation could spur more gambling. Late last year, Norton approved this compact, which is awaiting final approval from Louisiana.

Coushatta Chairman Lovelin Poncho and other tribal leaders were invited to the White House in 2002 to meet President Bush, an invitation that was spearheaded by Norquist, with help from Abramoff. Norquist explained that he organized once-a-year White House meetings with the president for small groups of legislators and tribal leaders who signed pledges supporting the administration on taxes, the war on terrorism, judicial matters, and other issues.

Nonetheless, as with the Chippewas, some newer Coushatta council members have been leading the charge to fire Greenberg Traurig. The council is currently embroiled in a power struggle over what to do with their lobbyists. Harold John, the Coushattas' secretary-treasurer, fired off a letter in early March informing Greenberg Traurig that its services and monthly retainer of $125,000 were being terminated. But others on the council contend that John had no authority to fire the firm.

David Sickey, who was elected to the tribal council last year, charges that Greenberg Traurig's work for the tribe was skimpy and that the fees seem outrageous. "We welcome the Senate probe and applaud the efforts of Senator McCain," Sickey said in an interview. Sickey has said in other news accounts that an internal audit by the tribe showed that most of the millions of dollars in payments to Abramoff and Scanlon were taken from tribal health, education, and social service funds.

Among other things, the McCain inquiry may shed light on the unusually large donation of $566,000 that the tribe made to the American International Center in Rehoboth. The center was a large client of Greenberg Traurig's from 2001 to 2003, paying the firm $1.5 million over the period, according to disclosure reports.

Just what the center did is hard to determine. Its Web site declared, "AIC is determined to influence global paradigms in an increasingly complex world," and "AIC is bringing great minds together from all over the globe." The center, located on property that Scanlon purchased for some $6 million, garnered extra attention when The Post reported that two of its principals, David Grosh and Brian Mann, were, respectively, an ex-lifeguard and a former yoga instructor who were old friends of Scanlon's. The center is no longer operating, and Scanlon declined to comment.

But several lobbying sources have told National Journal that one part of the center's mission was to help promote Malaysian interests and boost the country's image with Congress. The effort started sometime in mid-2001, according to sources, with the idea of using the center as a way to help the Malaysian client maintain anonymity.

The work for the Malaysians included at least one congressional trip in January 2002, when Reps. Pete Sessions, R-Texas, and Gregory Meeks, D-N.Y., visited Kuala Lumpur on a fact-finding mission involving terrorism and trade issues. Two members of Greenberg Traurig were also on the trip, which, according to congressional records, was paid for by the Institute of Strategic and International Studies, a Malaysian think tank that is believed to receive some funding from the Malaysian government.

Further, Greenberg Traurig lobbyists and Abramoff were involved in helping to organize meetings in May 2002, when the Malaysian prime minister visited Washington, according to three sources. Abramoff, at his lawyer's suggestion, declined to comment.

One Washington lawyer who does work related to the Foreign Agents Registration Act said the arrangement sounded as if it was meant to serve a skittish foreign client who wanted to fly under the radar. "Fairly often, foreign governments don't like it known that they're paying and using Washington lobbyists," he said. "By doing it through a think tank, it gives the effort a friendlier image."

Other Abramoff business ventures have raised eyebrows. In 2000, Abramoff teamed up with some old friends -- businessman Adam Kidan and Ben Waldman, a former Reagan administration official -- to buy SunCruz Casinos, in Florida. Abramoff was a SunCruz director and reportedly was paid $500,000 a year for his services. In February 2001, after the deal went through, former SunCruz owner Gus Boulis was found dead, in what investigators say was a gangland-style slaying. No one has ever been charged in the murder.

Scanlon, meanwhile, was handling press for the floating casino company. He persuaded a friend on Capitol Hill, Rep. Bob Ney, R-Ohio, to tout Kidan. Ney made a floor statement in the House in October 2000, praising Kidan for his "renowned reputation for honesty and integrity." What Ney didn't know at the time was that Kidan was about to be disbarred from practicing law in New York and had been linked in news stories to organized crime.

Scanlon subsequently told a Florida newspaper in July 2001 that he regretted giving bad information to Ney, the chairman of the House Administration Committee. On November 30, 2001, perhaps coincidentally, Scanlon made a soft-money donation of $50,000 to the National Republican Congressional Committee.

Ney spokesman Brian Walsh told National Journal it was "very unfortunate ... that information about Kidan's disreputable background was not shared with the congressman." Walsh added that Ney had nothing to do with Scanlon's donation.

Meanwhile, not long after the murder of Boulis, Abramoff gave his interest in the casino venture to Boulis's estate.

Mr. Religion or Mr. Gambling?
Abramoff now has his hands full with McCain and possibly the FBI probe. To help in his battle, he's using Washington lawyer Abbe Lowell and the New York public-relations firm Dan Klores Communications. Sources say that Abramoff's team has tried to find a lobbyist with good ties to McCain to help with the upcoming hearing. In the interview, Abramoff added that he's spending most of his free time working on behalf of the various religious and charitable efforts that he's undertaken over the years.

Meanwhile, Greenberg Traurig has hired lobbyist Randy Scheuneman for help on Capitol Hill and is awaiting the results of Schuelke's outside investigation.

Norquist and other allies seem certain that all of the controversy will blow over. "Jack will be fine," Norquist said. "He's hardworking, smart, and completely up-front."

Norquist sounds confident, too, that Abramoff's friends in Congress and the White House will stand with him, emphasizing his effectiveness as a fundraiser for candidates and party committees, as a "lobbyist in sync with the movement," and as a key player in GOP outreach to the Jewish community. Abramoff, added Norquist, "has done so much to back the party and the movement, that any sensible president and Republican leaders in Congress will want him as an ally."

But others aren't so sure. "There was always a concern ... raised about the size of the retainers that Abramoff received," said Don Pongrace, who heads the Indian lobbying practice at Akin Gump Strauss Hauer & Feld.

A longtime acquaintance of Abramoff's described a disconnect between the lobbyist's principles on the one hand and his gambling interests and tribal lobbying on the other, and said that the disconnect may have warped his judgment. "He was always Mr. Conservative and Mr. Religion," this source said. "When Jack decided to get into the gambling business, it was viewed as untoward."

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