The Magazine

The Friends of Jack Abramoff

They're not all Republicans.

Jan 16, 2006, Vol. 11, No. 17 • By MATTHEW CONTINETTI
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"THIS IS A REPUBLICAN scandal," Harry Reid, the Democrats' leader in the Senate, told Fox News Sunday host Chris Wallace in December. Wallace had asked Reid about his relationship with Jack Abramoff, the lobbyist who last week pleaded guilty, in two separate investigations, to five counts of mail fraud, tax evasion, wire fraud, and conspiracy. Reid said there was no relationship. "Abramoff gave me no money," he said. "So don't lump me in with Jack Abramoff."

Reid might not have taken money directly from Abramoff, a lifelong Republican and conservative activist, but he did accept donations--some $66,000 worth--from Abramoff's clients, Indian tribes operating casinos throughout the United States. And Reid's willingness to do so, and his reluctance to return the Abramoff-related funds, as many of his Republican colleagues have done, suggests that Washington's latest lobbying scandal may be more complex than partisans have let on, and more difficult for Democrats to make partisan hay out of than pundits now think. Consider another example.

On February 2, 2002, Abramoff wrote an email to his lobbying partner Michael Scanlon. "I'm on the phone with Tigua! Fire up the jet, baby, we're going to El Paso."

"I want all their MONEY!!!" Scanlon replied.

Until the previous month, the Tigua tribe had operated the Speaking Rock casino in El Paso, which a Texas District Court, adjudicating a suit brought against the tribe by Texas Attorney General John Cornyn--now a U.S. senator--had declared illegal. Abramoff, Scanlon, and Ralph Reed, the former executive director of the Christian Coalition, had worked behind the scenes on behalf of another tribe, the Louisiana Coushattas, to make sure that the Tigua casino stayed closed. They were successful.

But Abramoff and Scanlon were also greedy. Now that the Tigua were out of luck, they reasoned, wouldn't the tribe want to see their casino reopened? And wouldn't they want, further, to hire influence peddlers to petition the government on their behalf? Most important, wouldn't they pay those influence peddlers a whole lot of money to do so? The answer to all three questions was yes.

Abramoff approached the Tigua and told them that he could use his connections in the federal government to the tribe's advantage. He also said that his representation would cost nothing; only if he were successful would he ask the tribe to consider putting him on retainer. But Abramoff's representation would not be enough. The Tigua would also need to hire an expert in "grassroots" politics. He had someone in mind--his silent partner Scanlon. Abramoff "explained to us that Mr. Scanlon was the 'preeminent expert in grassroots politics,'" recalled Marc Schwartz, a Tigua representative, in a 2004 hearing before the Senate Indian Affairs Committee. What's more, Schwartz testified, thanks to Scanlon's "experience with Representative Tom DeLay," for whom he had served as spokesman, Scanlon "had developed a reputation as the, quote, 'go-to guy' for the most difficult campaigns."

Scanlon's program, "Operation Open Doors," came at a price: $4.2 million. What the Tigua did not know was that Scanlon planned all along to send half that amount back to Abramoff in the form of a $2.1 million check to Kay Gold LLC., an Abramoff front. The two friends called this arrangement "Gimme Five."

"As you know," Scanlon wrote in a January 9, 2003, after-action report to Schwartz, his tribal contact, "the election reform bill was targeted as the vehicle for the necessary legislative language needed to reopen the Speaking Rock Casino." This was because the Help America Vote Act of 2002, a grab-bag election reform bill also known as HAVA, was a sure legislative bet: It was due to pass Congress quickly, and the president would almost certainly sign it. "Fortunately," Scanlon continued, "Congressman Bob Ney (R-OH), with whom we have good relations and a solid working arrangement, was managing the House process." But at that time Democrats controlled the Senate, which meant that Scanlon's work had to be bipartisan. "Senator Christopher Dodd (D-CT)," he wrote, "managed the Senate."

Schwartz told Sen. John McCain in November 2004 that he recalled "an agreement between Mr. Abramoff and Senator Dodd early in the process. And Representative Ney came on the scene somewhat later." Schwartz's testimony jibes with the contents of an April 12, 2002, memo Scanlon sent to his tribal contacts, in which he wrote that "we have Senate support," but that "they are looking for political cover."

The route by which Scanlon had supposedly secured Dodd's cooperation was circuitous. His firm, Scanlon & Gould, aka Capital Campaign Strategies, paid another firm, Lunde & Burger, $50,000 to lobby the Connecticut Democrat. "He called me about the Tiguas' wanting to reopen their casino," Brian Lunde, a former Democratic National Committee executive director who in 2004 was the national chair of Democrats for Bush, later told the New York Times. "I checked around, and it was the formal position of the DNC to have that reopened." Lunde and Burger entered into a $10,000 subcontract with yet another "public relations strategist" to lobby Dodd directly. Enter Lottie Shackelford.

LIKE MANY WASHINGTONIANS Lottie Shackelford came to this city to do good and stayed to do well. She has been a vice chairman of the Democratic National Committee since 1989. She is also a lobbyist. She was the first woman to be elected mayor of Little Rock, Arkansas, and her career has followed the arc of that state's former governor, Bill Clinton. In 1993 Clinton appointed Shackelford, who had served on his presidential transition team, to the Overseas Private Investment Corporation, an obscure government agency that oversees subsidies for U.S. businesses investing abroad. Also that year she was named executive vice president of U.S. Strategies Inc., a lobbying firm. Later she became executive vice president of another lobbying firm, Global USA, Inc. (Much of her bio can be read on the website of the pharmaceutical company Medicis, on whose board Shackelford sits.)

Among Shackelford's clients in 2005: FM Policy Focus, which paid Global USA Inc. $45,000 for six months' work to lobby the House and Senate on "regulatory reform issues" and the "Federal Housing Finance Reform Act of 2005"; the "Metro-Miami Action Plan Trust," which hired her to "assist with procurement of appropriated funds"; and Hyundai Motor Company, which paid her to work on "issues related to hydrogen fleet and infrastructure demonstration and validation project," specifically "HR 2419, Energy and Water Development Appropriations Act, 2006, provisions relating to Department of Energy hydrogen program."

In 2002, when she contacted Dodd about the Tigua provision, Shackelford was also a registered lobbyist on behalf of Quest Software, as well as United to Secure America, which paid Global USA Inc. $10,000 to influence immigration reform legislation. She was not a registered lobbyist on behalf of the Tigua. She was, however, a member of Dodd's fundraising committee. "We directed her to make personal contact with the Senator throughout the campaign starting in April and lasting through the passage of the legislation in October," Scanlon wrote in his 2003 memo. Shackelford, he continued, was "critical."

In 2004 Dodd delivered a statement to the Senate Indian Affairs Committee. Shackelford "did approach my office," he wrote, "during the waning hours of negotiations over the HAVA legislation." And Shackelford did "inquire whether recognition provisions for the Tigua tribe could be included in the bill." However, according to Dodd, "the suggestion was summarily rejected."

No one seems to have told Bob Ney that. While Scanlon was working with the Democratic lobbyists, Abramoff had been working with the Ohio Republican congressman. On July 25, 2002, Abramoff received some disturbing news. Ney told him that he had met with Dodd to discuss HAVA, and brought up the Tigua. "Dodd looked at him like a 'deer in headlights,'" Abramoff later wrote to Scanlon, and "said he had never made such a commitment and that, with the problems of new casinos in Connecticut, it is a problem!!!"

The plan, in short, had failed. When the Help America Vote Act became law in October 2002, there was no provision reopening the Speaking Rock casino. Lobbyists, of course, get to cash their checks whether they are successful or not. Shackelford kept the $10,000. That she did so tells us that Jack Abramoff's story is not simply about how some Republicans work Washington for private gain. It's also about how Washington really works.

Matthew Continetti is a staff writer at The Weekly Standard and author of the forthcoming book, Can This Party Be Saved? How Money, Power, and Influence Have Corrupted the GOP (Doubleday).