A Lobbyist's Progress
From the December 20, 2004 issue: Jack Abramoff and the end of the Republican Revolution.
Dec 20, 2004, Vol. 10, No. 14 • By ANDREW FERGUSON
Abramoff joined the law-lobbying firm of Preston Gates Ellis & Rouvelas Meeds (the name partner Gates is the father of Bill Gates) and later moved to the firm Greenberg Traurig. In both offices he was assisted by Scanlon, who had worked for DeLay as press secretary. Scanlon eventually left Greenberg to strike out on his own, relying on Abramoff for business referrals. And from the start there was a lot of business to go around. One of Abramoff's greatest early successes as a lobbyist was won on behalf of the casino-owning Choctaw tribe. Indian casino profits had been exempted from taxation, and when some in Congress suggested taxing them, just as the government taxes casino profits from Las Vegas and elsewhere, Abramoff managed to convince the Republican leadership that such a tax would be an outrageous violation of Republican principle. The issue nicely demonstrated the elasticity of conservative ideology when properly deployed. Any tax of any kind on Indians, Abramoff argued, would contradict the anti-tax position that had become a marker of House Republicans. The Indian reservations, bolstered by gambling, could serve instead as "free market laboratories"--a "low-tax, unregulated, sovereign economic model for communities around the nation." Moreover, Abramoff told his fellow Republicans, casino profits would wean Indians from their unhealthy dependence on Washington.
Abramoff's ingenuity quickly earned him a reputation as the premier lobbyist for Indians in Washington--though he only worked for casino-owning tribes, who were, after all, the only "free market laboratories" that could afford Washington lobbyists. He regularly arranged fact-finding trips for congressmen and their staffs to the casinos, especially those with golf courses.
Abramoff told the Post earlier this year that those Indian tribes "are engaged in the same ideological and philosophical efforts that conservatives are--basically saying, 'Look, we want to be left alone.'" Abramoff was echoing his old friend Norquist, who has dubbed the conservative movement, in its present manifestation, "the leave us alone coalition." Norquist has worked on behalf of casino tribes, too, and they have donated generously to his group Americans for Tax Reform, sometimes at Abramoff's insistence. And we should add that the tribes don't want to be left alone, you know, all the time. Abramoff has also bragged of the millions of tax dollars he has snagged for his Indian clients, in the form of more conventional pork-barrel appropriations for roads, schools, water projects, sewers, and the rest.
In Beltway lobbying, as elsewhere, diversification is the key to success. It is essential for a lobbyist like Abramoff--who boasts of his passion for ideology--to stretch his conservative arguments over as wide a variety of clients as possible. Channel One, the for-profit TV channel that pumps commercial-laden programming into public school classrooms, hired both Reed and Abramoff in the late 1990s to defend it against conservative criticism. Abramoff dismissed the channel's right-wing opponents for pursuing "an anti-free-market, anticommercial agenda." The textile industry in the Marianas islands, a U.S. protectorate, hired Abramoff when congressional Democrats tried to impose U.S. labor regulations on its sweatshops, where low-wage workers imported from China and the Philippines produced garments marked "Made in the USA." Abramoff arranged trips to the islands, where there was also a nice golf course. Among other congressional Republicans and Democrats, DeLay toured the sweatshops and pronounced the islands "a perfect Petri dish of capitalism." Before 9/11, Abramoff lobbied for the dictatorships in Pakistan and Malaysia. After 9/11, according to National Journal, he signed up as lobbyist for the General Council for Islamic Banks and Financial Institutions, a consortium of banks that operate according to sharia, or Islamic law.
None of this lucrative representation--I hurry to note--would raise an eyebrow among the capital's well-heeled political class. Democratic lobbyists have fattened off Washington for years. Abramoff was merely the first Republican to discover that pretending to advance the interests of conservative small-government could, for a lobbyist, be as insanely lucrative as pretending to advance the interests of liberal big-government; in reality, of course, lobbyists advance their own interests above all. It helped, too, when conservatives revised their philosophical commitments to embrace the nonsensical neologism "big government conservatism." Given this ideological elasticity, it was only a matter of time before Republicans achieved "parity" on K Street as they have in the country at large. No K Street firm can long endure without being half-Republican--thanks in large part to the exertions of Jack Abramoff.
Not surprisingly, then, it took an outsider to notice something fishy about the dealings between Indians and Abramoff.
IN SEPTEMBER 2003, a reporter for the daily Town Talk in Alexandria, Louisiana, wrote a story about a local Indian tribe, the Louisiana Coushattas, who run a casino in nearby Kinder. An internal audit, the reporter learned, had revealed that the tribe had been spending an inordinate sum on Washington lobbyists. In one year's time, they had paid $13.7 million to Michael Scanlon's firm Capitol Campaign Strategies, another half million to a "think tank" called the American International Center, $2.4 million to Abramoff's firm Greenberg Traurig, and another $485,000 to Abramoff himself. Though the tribe's casino generates about $300 million a year, the tribal government was running a $40 million deficit, and no tribe member, according to the newspaper, could quite explain what the lobbyists had done for the money. With a follow-up a month later, the Town Talk story found its way into the email queues of Washington lobbyists early this year, and eventually inspired the stories in the Washington Post, which inspired the Senate hearings.
Abramoff and Scanlon appeared at the hearings separately, and both refused to answer questions, invoking the Fifth Amendment. True to Senate traditions, however, their presence at the hearings was not really meant to elicit information; the two witnesses were there mostly so senators could browbeat them before the television cameras. "I don't know how you go to sleep at night," said Sen. Kent Conrad, in a typical rebuke.
In truth, Conrad's point was well taken. The story lines put together by the committee's investigators, and especially the emails and memos they released as evidence, show a riot of presumption and greed on the part of Abramoff, Scanlon, and Reed. The activities covered by the committee involved six tribes. With variations from tribe to tribe, Abramoff and Scanlon's basic method in dealing with clients was this: Abramoff would urge a tribe to hire Scanlon for assistance in a "grass-roots" activity--helping to organize a tribal election, for example, or ginning up a letter-writing campaign to state legislators or congressional lawmakers. Scanlon would usually subcontract out the work, and collect the fees. These in turn would be shared with Abramoff--unbeknownst to the tribes or to Abramoff's own firm. Over three years, the tribes paid at least $66 million to Scanlon's firm, Capital Campaign Strategies. At least $21 million of that was then routed to Abramoff.
"Jack Abramoff owed the tribes he represented a duty to disclose his financial stake in the multimillion dollar contract he was steering Michael Scanlon's way," said Sen. John McCain in an opening statement. McCain's dudgeon assumes that there is a code of honor among lobbyists that Abramoff had somehow breached. If such a code exists, it's not often consulted. There was, however, a legal logic behind the secrecy. By law anyone who spends at least 20 percent of his billable hours meeting with government officials on behalf of a client is a lobbyist. (Hence the wry Washington axiom: A lobbyist spends 20 percent of his time lobbying the government, 80 percent lobbying his client.) Lobbyists must publicly disclose their clients and fees. Abramoff is a lobbyist.
But Scanlon is not. He is a "political consultant," a "public affairs strategist," a "media relations specialist"--in Washington these phony-baloney job titles are interchangeable. As such he doesn't have to disclose his fees and clients. By directing Abramoff's clients to hire Scanlon, who then charged them enormous fees, the two men could make as much money as possible without having to disclose anything.
One 2003 email from Abramoff to his accountant and released by the committee gave a small example of how the swag was divided:
"I think I understand what he [Scanlon] did. We received $5 million into CCS . . . he divided the $5 million into three piles: $1 M for actual expenses, and $2 M for each of us."
It helped, too, that there were several conduits the money could pass through. The most colorful, and mysterious, of these was Scanlon's think tank, the American International Center, into which the tribes paid millions of dollars. The prestige of real think tanks in Washington, quasi-academic research groups like the American Enterprise Institute and the Brookings Institution, has greatly increased the popularity of the term. Almost anything can be called a think tank nowadays. Scanlon started his in 2001. It's set up in a large house he bought (for $4.2 million, according to the Post) two blocks from the ocean, at the resort community of Rehoboth Beach, Delaware. A reporter for National Journal visited its website shortly before it was taken down. The AIC, said the website, had the "global minded purpose of enhancing the methods of empowerment for territories, commonwealths, and sovereign nations in possession of and within the United States." Further, it sought "to expand the parameters of international discourse in an effort to leverage the combined power of world intellect." Living in the beach house were the two resident scholars: David Grosh had been named Rehoboth's "lifeguard of the year" in 1995, and Brian Mann, the Post reported, is a former yoga instructor.
Another recipient of the tribe's generosity was the Capital Athletic Foundation, a charitable organization founded by Abramoff and used to support a private boys school he opened in Maryland, the Eshkol Academy. Both Eshkol and the foundation are now defunct. When one of Abramoff's tribes, the Tigua of El Paso, Texas, had trouble paying its retainer, the lobbyist came up with an innovative solution--a "brand new deal," as he put it to the tribe's representative, Marc Schwartz. Abramoff suggested an "elderly legacy program": The tribe would take out term life insurance on its oldest members, naming the school as beneficiary. As the oldsters dropped off and the money rolled in, the school would pay Abramoff's retainer out of the proceeds. "Once the group of tribal elders has completed [a medical] exam and are accepted by the insurance company," Abramoff explained in a memo, "the financing phase will commence immediately." According to Schwartz, the elders of the tribe declined the arrangement. Too morbid, they said.
BECAUSE ABRAMOFF and Scanlon have not yet had a chance to present their rebuttal to the committee's evidence, it's still unclear what services they performed in exchange for the millions they received. But the committee was able to illuminate one original mystery--why the Louisiana Coushatta tribe hired the pair to begin with.
As we've seen, Abramoff prized casino tribes as "low-tax sovereign economic models." But even "laboratories of free enterprise" don't like competition. Often tribes hired Abramoff to make sure that other tribes did not develop their own sovereign economic models which might drain away business. When three rival tribes in neighboring Texas opened casinos, drawing customers away from their casino in Kinder, the Louisiana Coushattas hired Abramoff and Scanlon. Their idea was to prod Texas Republicans to shut down the new casinos, either through the Texas legislature or the courts. Scanlon promised to launch a "grass-roots campaign" to pressure the Texans.
And he enlisted Abramoff's old colleague Ralph Reed to help. Since their salad days together in College Republicans, Reed had learned to prosper in politics as Abramoff had. His firm, Century Strategies, specializes in "Strategic Business Development Assistance, Organizational Development, Direct Mail and Voter Contact Services, Fundraising Management, Research and Analysis, Creative Media Planning, Public and Media Relations, and List Management and Procurement." Whatever these terms may mean, they're expensive.
Though not yet as rich as his mentor, Reed is far more famous, and far more careful with his reputation. As a pillar among conservative evangelicals and an ardent foe of gambling, Reed refuses to take casino tribes as clients. The tribes therefore hired Scanlon, who hired Reed. Century Strategies was paid at least $4.2 million to organize a grass-roots campaign--working phone banks, writing letters--to shut down the Texas tribes' casinos and, as Reed put it in one email, "get our pastors riled up." Half of the $4.2 million sum received by Reed's firm came from the American International Center, the think tank on the beach. Sure enough, in February 2002, the Texas casinos were shuttered by a Texas court, acting pursuant to an order sought by the Texas attorney general John Cornyn (now a U.S. senator).
The Texas tribes were devastated, of course, but Abramoff was energized. Shortly after the court order, through an intermediary, he approached one of the tribes, the Tigua of El Paso, offering to use his lobbying magic in Washington to get their casino reopened. The Tigua had no way of knowing that Abramoff and Scanlon had been involved in the campaign to shut down their casino.
On February 6, 2002, Abramoff emailed Scanlon under the header I'm on the phone with Tigua: "Fire up the jet, baby, we're going to El Paso!"
Scanlon responded: "I want all their MONEY!!!"
A few days later, Abramoff, in a more sober mood, addressed a proposal to a Tigua representative via email. "Our motivations for this representation are manifold," Abramoff wrote. He wanted to protect "tribal sovereignty," he said. "While we are Republicans and normally want all Republicans to prevail in electoral challenges, this ill-advised decision on the part of the Republican leadership in Texas must not stand. And we intend to right this using, in part, Republican leaders from Washington."
Abramoff himself offered to help the Tigua for free--on two conditions. One, that "if we succeed, we can expect to have a long-term relationship with the tribe by representing their interests on the federal level"; and two, that the Tigua hire Michael Scanlon for "grass-roots lobbying." "He's the best there is in the business." Cost: $4.2 million.
The emails released by the committee, with their schoolyard vulgarities and adolescent chest-thumping, titillated Washington for days after excerpts were published in the Post this fall. (Abramoff to Reed: "I'd love us to get our mitts on that moolah!!") And the brazenness of the Abramoff-Scanlon maneuver with the Tigua--pushing the state government to shut down the tribe's casino, then offering to lobby the federal government to reopen it--was a jolt even to the most hardened Washington observers. (The emails and other documents can be seen in their entirety at the committee's website: www.indian.senate.gov.)
Yet as often happens in the capital's lobbying culture, what's really fascinating isn't what's exceptional but what's typical. For apart from its price tag, which even lobbyists agree was excessive, the lobbying effort launched by Abramoff and Scanlon for the Tigua was perfectly ordinary. Indeed, it's almost a textbook case of the sly manipulation of federal power on behalf of those who are willing to pay up--with the middlemen as the ultimate beneficiaries.
On February 18, 2002, Scanlon and Abramoff flew by chartered jet to present the Tigua their proposal for "Operation Open Doors." In its breathless tone, its bogus self-confidence, its pompous phrasing, the document is a towering monolith of Beltway Baloney.
The singular objective of our strategy is to open the doors of the Speaking Rock Casino within the next 4 months. . . . This political operation will result in a Majority of both federal chambers either becoming close friends of the tribe or fearing the tribe in a very short period of time. Simply put you need 218 friends in the U.S. House and 51 Senators on your side very quickly, and we will do that through both love and fear.
The idea was to persuade some accommodating lawmaker to attach a few sentences to an otherwise unrelated piece of legislation. The language would alter the tribe's federal charter, override the ruling of the Texas court, and make the tribe once again eligible to operate a casino.
And yet! "Make no mistake: the true value of this strategy is not the legislation. Quiet [sic] frankly the legislative solution itself is not what one would call rocket science." Generating "political support," however, is rocket science--and easily as expensive as anything NASA ever dreamed up. It involved constant polls, activated phone banks, and two (2) "fully customized databases"--one "Grassroots Database" and one "Qualitative Research Database"--"containing every piece of information fathomable." According to the committee, Abramoff and Scanlon also provided the tribe with a list of political "targets"--Republican congressmen, senators, political action committees, and organizations, such as Norquist's Americans for Tax Reform and Abramoff's Capital Athletic Foundation, to which they insisted the tribe give money. "If you execute this strategy in its entirety, your doors will be open and gaming [Indian for gambling] will return in the immediate future."
A few days after Abramoff and Scanlon's presentation to the Tigua, the El Paso newspaper ran a story about the closing of their casino: "450 Casino Employees Officially Terminated."
Via email, Scanlon sent the story to Abramoff. "This is the front page of todays paper while they will be voting on our plan!"
Abramoff fired back: "Is life great or what!!!!"
But some things in life are too good to be true. Though the tribal council approved the plan and paid the money, in the end the Tigua "fix" didn't work out. The rocket science failed. For one thing, Scanlon's firm farmed out the database work to a subcontractor who charged less than $100,000, even though records obtained by the committee show that Scanlon charged the tribe $1.8 million for it. But even the sub-rocket science, the legislative solution, didn't work. It was not for lack of trying.
First Abramoff and Scanlon had to find a bill on which they could tack their "language." Abramoff emailed a subordinate: "I need to know asap which pieces of legislation are likely to be passed through both House and Senate in the next three months. . . . How do we find silly little things which are moving which can have some technical corrections language attached?" In March 2002 they settled on an election reform bill, a silly little thing sponsored by Rep. Bob Ney, another onetime revolutionary from the House Republican Class of '94 and now firmly settled in the House leadership. Ney had also, just the month before, seen his chief of staff take a lucrative lobbying job with . . . Jack Abramoff. Abramoff emailed Scanlon the good news: "Just met with Ney!!! We're f'ing gold!!!!! He's going to do Tigua."
In a statement, Ney now says he was "duped by Jack Abramoff." But by all accounts, including one last week in Roll Call, it was a curious duping.
Ney says Abramoff had assured him that the Senate sponsor of the election reform bill, Sen. Christopher Dodd, would support the inclusion of the Tigua language. Indeed, Scanlon had already paid off three Democratic lobbyists, including a member of Dodd's campaign finance committee, to persuade Dodd to accept the insertion. In April, Abramoff took Tigua officials to meet Ney. The meeting lasted nearly two hours. Ney, one of the Tigua representatives testified, "was extremely animated about Mr. Abramoff and his ability as a representative lobbyist in the city [and] he had tremendous sympathy for the plight that the tribe had gone through." A few days later, the Tigua donated $30,000 to PACs controlled by Ney.
Then the Tigua got stingy. They declined to pay $50,000 to finance a skybox--all good lobbyists have skyboxes--for Abramoff at a Washington sports arena. In June, Abramoff emailed the Tigua again: "Our friend . . . asked if you could help (as in cover) a Scotland golf trip for him and some staff (his committee chief of staff) for August. The trip will be quite expensive (we did this for another member--you know who) 2 years ago. Let me know if you guys could do $50k . . . they would probably do the trip through the Capital Athletic Foundation as an educational mission." Already short of cash, the Tigua declined.
In July, Ney heard from Dodd that the senator would not support the inclusion of the Tigua language. "I had been misled by Jack Abramoff," Ney has said in his statement. "The matter was then closed from my perspective." A week later, however, he and the lobbyist had patched things up. Ney flew to Scotland on a chartered jet with Abramoff, another lobbyist, an official of the General Services Administration, and their friend Ralph Reed. They played golf at St. Andrews. Abramoff had found someone else to pay for the trip. The Tigua never did get their "fix."
A FUNNY THING HAPPENS when you talk to lobbyists, especially those with Indian casino clients, about the Senate investigation of Abramoff and Scanlon. None of them will talk for the record, of course, but they are surprisingly unanimous that all this unpleasantness will soon blow over.
"I think that story has about run its course," one told me the other day. "Really, after you get past Jack's excesses--which are Jack's--there's not much there."
"I'm hearing there won't be any more hearings," another told me. "It's done. They've nailed Jack. End of story."
This is just wishful thinking, though. The new chairman of the Indian Affairs committee, Sen. McCain, has made it clear he has much more material to ventilate in hearings that will continue next year. But the lobbyists' defensiveness is understandable. Stripped of its peculiar grossness, Abramoff's Indian story really is just another story of business as usual in the world of Washington lobbying, and the longer hearings like McCain's drag on, the more likely it is that even the Republican "grass-roots" will wise up. That closed, parasitic culture of convenience--with its revolving doors, front groups, pay-offs, expense-account comfort, and ideological cover stories--is as essential to the way Republican Washington works, ten years after the Revolution, as ever it was to Democratic Washington.
In an interview about Abramoff for National Public Radio a couple months ago, his old friend Norquist said, "To this day I can't find anything he did or he's accused of doing that's illegal, immoral, or fattening." A few days later I came across another quote from Norquist, from a profile of Abramoff in the National Journal in 1995, soon after Abramoff had announced he would become a lobbyist, back when the Revolution was still young.
"What the Republicans need is 50 Jack Abramoffs," Norquist said. "Then this becomes a different town."
It was a bold statement, typical for the time, but even then it raised a question we now know the answer to: Would the Republicans change Washington, or would it be the other way around?
Andrew Ferguson is a senior editor at The Weekly Standard.