Lobbyist is charged with conspiring to bilk Indians
Former DeLay aide, who may be cooperating in case, is likely to plead guilty
By MICHAEL HEDGES
Copyright 2005 Houston Chronicle Washington Bureau
Nov. 19, 2005, 9:26AM
http://www.chron.com/disp/story.mpl/front/3471273.html
WASHINGTON - A two-year federal probe into the business affairs of two lobbyists with political ties to U.S. Rep. Tom DeLay produced criminal charges Friday against one of them, former DeLay aide Michael Scanlon.
Scanlon, who partnered with controversial lobbyist Jack Abramoff after leaving DeLay's staff five years ago, was accused of conspiring to defraud Indian tribe clients of millions of dollars.
The former DeLay aide has a court appearance scheduled for Monday at which he is expected to plead guilty. Issuing a criminal information rather than an indictment is a strong indicator that Scanlon has been cooperating with federal officials and that the charges are a result of negotiations, legal experts said. The charges carry punishment of between 51 and 63 months in federal prison and a $250,000 fine.
DeLay, who once publicly called Abramoff his best friend, was not charged or implicated in the allegations by the U.S. Justice Department. A spokesman for DeLay said the lawmaker has not been contacted by federal prosecutors in the case.
But DeLay's connections with Scanlon, his press secretary from 1998 to 2000, and Abramoff, who accompanied DeLay on a lavish golf outing to Scotland, have prompted critics to call for an ethics investigation. DeLay has said he would welcome such a probe to "clear my name."
DeLay, the Sugar Land Republican, was forced to step down as House majority leader when he was indicted in Texas on campaign finance charges unrelated to Abramoff and Scanlon.
The charge against Scanlon marks a dramatic development in the investigation into whether Abramoff and Scanlon bilked Indian tribes in four states out of nearly $53 million while convincing the tribes that they could use political contacts to win them the right to build lucrative casinos.
Abramoff role mentioned
The federal charging document alleges that Scanlon and an unnamed lobbyist, who officials said was Abramoff, attempted to bribe an unidentified member of Congress.
An attorney for Rep. Bob Ney, R-Ohio, confirmed that Ney was the lawmaker and denied wrongdoing by Ney.
Prosecutors described a scheme in which "lobbyist A," apparently meaning Abramoff, persuaded Indian tribes to hire Scanlon to do public relations for them. Scanlon then charged enormous fees, reaching into seven figures, while kicking back half to Abramoff, prosecutors charged.
The tribes included the Texas Tigua Indians, who Scanlon and Abramoff charged $4.2 million to help keep open a gambling house in El Paso. The lucrative fees paid to the two men produced little for most of the tribes, including the Tiguas, who lost their El Paso gaming facility because of legal rulings.
"This was only a matter of time. The proof that he committed fraud speaks for itself," Carlos Hisa, lieutenant governor of the Tigua tribe, said of the charge against Scanlon.
Hisa said the tribe was preparing to file a civil suit against Scanlon and Abramoff. "I don't want them to walk away with a slap on the wrist," he said.
While only charging Scanlon with conspiracy to commit fraud, the information filed in the case cited violations of other federal crimes, including fraud, wire fraud and bribery.
As part of the conspiracy, Scanlon and the unnamed lobbyist would "provide things of value to federal public officials, including trips, campaign contributions, meals and entertainment in exchange for agreements that the public officials would use their official positions and influence" to benefit their clients, the charging documents said.
Trips and meals cited
The charging documents said the unnamed lawmaker and his staff accepted "a steady stream of things of value" from Scanlon and Abramoff, including a "lavish trip to Scotland to play golf on world famous courses" and "regular meals at Lobbyist A's upscale restaurant ... " between 2000 and 2004. Abramoff owned a restaurant in Washington during that time.
"Yes, he did perform certain acts — his office did — and there was certain other wining and dining situations like other people do, but he's the victim. He was misled," Ney's attorney, Mark Tuohey, told the Associated Press.
Ney accompanied Abramoff and Scanlon on a trip to Scotland in 2002, according to documents released by congressional investigators.
In return for those improper gifts, the federal charges said, the unnamed lawmaker agreed to support legislation sought by the lobbyists, and help "Lobbyist A" in his efforts to get a contract to install wireless telephone equipment in the House.
In 2002, Ney approved a license for an Israeli telecommunications company to install antennas for the House. That company paid Abramoff $280,000 and donated $50,000 more to an Abramoff charity.
Ney did not return calls for comment. When federal prosecutors subpoenaed documents from him earlier this month, he said, "As I have said repeatedly, we will cooperate fully with any inquiry."
Scanlon was one of several DeLay lieutenants who parlayed a position on the legislator's staff into a lucrative career in Washington influence peddling. After leaving DeLay's office, Scanlon started a company called Capital Campaign Strategies. He quickly linked up with Abramoff.
E-mail became exhibits
The actions of Scanlon and Abramoff first came to light in September 2003 when e-mails exchanged by the men were exhibits in a Senate Indian Affairs Committee hearing.
The duo openly exulted over the "millions" they were raking in from Indian clients they described in writing as "idiots" and "morons." In an e-mail, Abramoff said of the Tigua tribe of El Paso, "We need to get some $ from those monkeys!!!!"
Abramoff is already under federal indictment in an unrelated case.
In September, David Safavian, the top procurement officer for the Bush administration's Office of Management and Budget, was charged with making false statements in the Washington investigation of the lobbyists. He has pleaded not guilty.
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