Lobbyist’s Plea Sets Off Scramble
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Lawmakers and congressional staffers are scurrying for legal help and political cover after a prominent and well-connected Washington lobbyist, Jack Abramoff, pleaded guilty yesterday to felony charges of conspiring to bribe public officials, fraud, and tax evasion.
Abramoff, 47, entered the pleas at a hearing in federal court in the capital. This afternoon, he is expected to appear in Miami before another judge to enter pleas to similar charges stemming from a Florida cruise ship casino venture.
“This case is very active and ongoing,” a Justice Department official overseeing the probe, Alice Fisher, said at a news conference. “There are many prosecutors and many investigators looking at this case. And, again, we’re going to follow this wherever it goes.”
Prosecutors declined to say which specific members of Congress were under investigation, and none was named in the formal charges filed yesterday. However, some of the charges track with gifts and campaign contributions that Abramoff gave to Rep. Robert Ney, a Republican of Ohio. The Justice Department said the gifts, which included a trip to Scotland to play golf, were part of an “agreement to perform a series of official acts to benefit defendant Abramoff’s businesses, clients, and others. “Prosecutors said the congressman, described in court papers as “Representative no. 1,” promised to support legislation sought by Abramoff, to place statements in the Congressional Record, and to promote an application by one of the lobbyist’s clients to install wireless telephone equipment in the Capitol.
Mr. Ney’s office issued a statement yesterday saying he did “nothing wrong” and was not subject to “any improper influence from Jack Abramoff or anybody else.”
“I obviously did not know, and had no way of knowing, the self-serving and fraudulent nature of Abramoff’s activities,” Mr. Ney said. A defense attorney retained by the congressman, Mark Tuohey, did not return a call seeking comment on any discussions Mr. Ney may have had with prosecutors.
Prosecutors said Abramoff’s illegal dealings involved “public officials and their relatives.” The Justice Department also alleged Abramoff bilked his most lucrative clients, several Indian tribes seeking gaming rights, out of about $25 million.
At the hearing yesterday, Abramoff agreed with the facts set forth by the government and promised to testify truthfully in any future criminal trials spawned by the investigation.
“All of my remaining days, I will feel tremendous sadness and regret for my conduct and for what I have done,” Abramoff told Judge Ellen Huvelle, according to Bloomberg News. “I only hope that I can merit forgiveness from the Almighty and from those I have wronged.”
Under the plea deal with prosecutors, Abramoff agreed to a sentence of between 9 and 11 years in prison. His actual sentence, which will be determined by the judges involved, could be reduced if his cooperation is helpful to the government.
Reports that Abramoff was talking with prosecutors have triggered a frenzy of activity in Washington, as people who could be caught up in the inquiry try to secure legal counsel.
“Everybody’s scrambling,” a white-collar defense attorney, Joshua Berman, said. He said the investigation was generating more business than usual because the Justice Department is targeting lawmakers, Congressional staffers, and lobbyists. “You have three separate industries or businesses where people are scrambling.”
Political damage from the investigation is already being felt, largely by officials who took large amounts of campaign contributions from Abramoff and his clients. Senator Burns, a Republican of Montana who is up for re-election this year, agreed last month to return about $150,000 in donations connected to Abramoff. “Abramoff appears to have deliberately lied to dozens – maybe hundreds – of members of Congress, Democrats and Republicans alike,” Mr. Burns said in a statement yesterday. The senator has not retained a defense attorney, but has offered to co-operate with prosecutors, a spokesman, James Pendleton, said.
Senator Dorgan, a Democrat of North Dakota, recently returned $67,000 in money with Abramoff ties, while Senator Baucus, a Democrat of Montana, returned nearly $19,000.
Democrats have noted that most of Abramoff’s gifts and donations went to Republicans. GOP officials have countered by pointing out the lobbyist’s connections with Democrats.
An attorney for another lawmaker involved in the probe, Rep. Tom DeLay of Texas, acknowledged in an interview yesterday that the former House majority leader was close to Abramoff. “They’ve been friends for a long time,” a lawyer who is representing the lawmaker in a separate criminal case in Texas, Dick DeGuerin, told MSNBC yesterday. “Apparently, Abramoff was into some stuff that even his friends didn’t know about.”
Mr. DeGuerin said Mr. DeLay’s dealings with Abramoff were “aboveboard.” The attorney said twice during the televised interview that the lawmaker would continue to stand by the disgraced lobbyist. “Tom DeLay’s not going to abandon Jack Abramoff just because Jack Abramoff has done some illegal things,” Mr. DeGuerin said. “Jack Abramoff supported the conservative causes that are close to Congressman DeLay’s heart.”
The shock waves from the scandal reached the White House as the Democratic National Committee repeated its call for President Bush to return more than $100,000 in donations Abramoff solicited for the president’s re-election campaign. The White House referred questions about the donations to the Republican National Committee, which did not return a call seeking comment for this story.
Two former associates of Abramoff are already co-operating with prosecutors after pleading guilty to charges stemming from the probe. In November, a public relations executive and business partner of Abramoff, Michael Scanlon, pleaded guilty to conspiring to defraud clients and bribe public officials. Another businessman who worked with Abramoff, Adam Kidan, entered guilty pleas in Florida last month in connection with the riverboat casino part of the probe.
The court documents filed yesterday suggest to legal observers that prosecutors are planning to charge or apply pressure to Congressional staffers in order to get them to turn up the heat on their bosses. “My guess is they want to go after some of these smaller fish,” Mr. Berman said.
The official charges against Abramoff include a claim that he deprived his clients of “honest services” by failing to inform them about his practice of taking a 50% cut of the fees clients paid to Scanlon and other associates. Prosecutors said the payments were “kickbacks” and that those involved described the arrangement as “gimme five.”
Using those payments as basis for a federal criminal charge is open to debate, according a law professor at Stanford University, Robert Weisberg. “It’s a very, very elusive kind of fraud,” he said. “It’s very unclear what law is being violated when some of these things are customs of the trade.”
In many industries, referral fees or commissions are common and not always disclosed, though the payments rarely approach 50%. “If it’s a small amount and done by a lot of people, then it’s okay. If it’s more than that, then it’s not okay?” Mr. Weisberg asked. “Nobody knows what the legal standards are because nobody knows what the moral standards are,” he said.
Mr. Berman said that such issues would have been raised at any trial, but are largely moot now that Abramoff has cut a deal. “In this particular case, Abramoff is going to eat whatever they want him to eat,” the lawyer said.