Peter Stone discusses Heist: Superlobbyist Jack Abramoff, His Republican Allies, and The Buying of Washington.
Jack Abramoff's back-to-back plea agreements in early 2006, and the related plea deals of three of his former lobbying associates, have created high anxiety for several GOP members of Congress, Capitol Hill aides, and lobbyists, who are now under scrutiny by a federal criminal task force. Based on dozens of interviews with Indian tribal leaders, prominent conservatives, lobbying associates of Abramoff, current and former members of Congress, as well as new documents and email, "Heist" provides a close-up look at Abramoff's meteoric rise and fall as an extraordinarily powerful GOP fundraiser and lobbyist in Washington.
"Heist" is a feat of first-rate investigative journalism, a vivid story of political corruption, greed, and deceit - corruption that many informed analysts say could turn in the biggest congressional scandal in a generation. Peter Stone has covered lobbying and campaign finance issues since 1992 for the National Journal, where he reported exclusively on the influence-peddling scandal surrounding Abramoff since it first broke in early 2004; his book should be devoured by both liberals and conservatives - as well as those in the political center - to fully understand the dynamics and sweep of the Abramoff scandal- Cody's Books
Peter H. Stone
Peter Stone is a staff correspondent for the National Journal. Heâ€™s been covering lobbying and campaign finance issues for the magazine since 1992. "Heist" is his first book. Mr. Stone is a nephew of legendary journalist, I. F. Stone.
And then I want to welcome Peter Stone. He's writtenHeist: Superlobbyist Jack Abramoff, His Republican Allies,and the Buying of Washington. He's been covering lobbying and campaignfinance issues since 1992, for the National Journal. He's herefrom Washington D.C., and he's going to discuss his book and thentake some questions from you all, and then he'll be available to sign copiesof his book, if you'd like. They're for purchase right up here nextto the cash register. So if you would welcome, help mewelcome, Peter Stone. Thank you.Thanks, everybody. It's nice to be in Berkeley. I would have one moreperson here, my sister, who's lived in Berkeley for about threedecades and is a Chinese scholar, but she took off to Italy on somewild escapade with her boyfriend, so she's not here tonight.And an aunt of mine, I have other relatives in the bay area, longtime filmcritic for the San Francisco Chronicle. Retired now, named Judy Stone.But she came to hear me yesterday, so I can't-- I don't have anyrelatives here, so I'm depending on everybody here to ask very goodquestions, which I'm sure you will, and I imagine folks who turnedout probably have followed this scandal a little bit.It's been making enormous news for almost 2 ÃƒÆ’Ã¢â‚¬Å¡Ãƒâ€šÃ‚Â½ years now. I'vecovered it since practically the beginning when the WashingtonPost did the first story on it in late February of 2004. In all the yearsI've covered lobby, which is sixteen, in Washington for NationalJournal and for another publication Legal Times before, there's neverbeen a lobbying scandal quite like this. And it probably is one of thetwo or three biggest corruption scandals that Washington hasseen involving Congress, both a member of Congress, we now havethis month, Bob Ney has pleaded guilty to two felonies as part of theconspiracy that was led by Jack Abramoff, a longtime extremelyeffective GOP fund raiser, and powerful Republican lobbyist. One ofthe most powerful in Washington, whose career started in 1994but took off like a rocket after the Republicans won controlof Congress. He started lobbying in early 95.His career was aided significantly by two of his oldest friends, whohe's known since the early 1980s, who have been leaders of theconservative movement in Washington and nationally, now for acouple of decades. One was Ralph Reed, the former head of theChristian Coalition, who gave up his Christian Coalition work in 1997 andwent into the consulting business, and he immediately turned toAbramoff and in one of the immortal emails that you may haveheard about that have made this story bothastonishing and horrifying and humorous at the same time.Ralph Reed wrote to his old buddy Jack Abramoff, and I'm goingto paraphrase a little of it, but "Now that I'm done with Christian Coalition,I'm counting on you for work and counting on you as I start humpingfor clients." Humping, humping, yeah. H, humping, yeah, for clients.Corporate work. This is a paraphrase ofthis email that's been widely publicized.Anyway, Reed was one of Abramoff's closest friends, he becameinvolved with his Indian casino work, as you probably know. Abramoff wasknown for his work for several Indian casinos. He defrauded fourIndian casinos, which is what he plead guilty to early this year.He plead guilty to fraud scheme basically involving kickbacksthat he got from a covert partner who was a former aid toTom DeLay, former spokesman for Tom DeLay, Michael Scanlon.Abramoff was hired by several tribes to do lobbying for them in Washington,and Abramoff said to these tribes, one in Texas outside of El Paso,one in Mississippi, one in Louisiana and another in Michigan,he told these tribes, you know, you can't get what you want in Washingtonunless you hire this other fellow. Extremely effective grass-rootslobbyist, PR wizard, Michael Scanlon, who had just left DeLay's office.And at Abramoff's behest, several tribes hired Michael Scanlon for sixtribes paid him the astronomical sum of 66 million dollars over three years.These are the kind of fees that one normally associates withGeneral Motors or General Electric. But a little consulting firm runby Michael Scanlon, which was touted by Jack Abramoff as the go-to guyyou have to have him, to help you out generating phone calls, letters,grass roots support for you in Congress. So they hired Scanlon,they paid him 66 million dollars. What Abramoff did not tell the tribes,and was at the heart of the fraud, was that he had a secretbusiness deal with Michael Scanlon, to split most of this money, kickbacks.They jocularly referred to it as "give me five," in, again, in their emails,and as the "give me five" scheme progressed, of the 66 million dollars,Abramoff and Scanlon pocketed 42 million. 21 million each.Both men plead guilty, Scanlon first, late November last year,and then Abramoff in early January. Which set off a domino effect this yearof plea bargains. And incredible number. We've now got eight peoplewho have been convicted in the scandal, lobbying associatesof Abramoff, the plea was to fraud, the plea was also conspiracy to bribepublic officials. And the public officials are former top aids in Congress,two were top aids to Tom DeLay, Scanlon and a fellow namedTony Rudy, who was his deputy chief of staff, Rudywent on to be a lobbying associate for Abramoff.Former top aid to Bob Ney, who plead guilty, as I said, a few weeksago, another lobbying associate of Jack Abramoff's who joined him, and theygot Bob Ney to do a lot of things for them. Bob Ney put statementsin the Congressional Record to help them. Bob Ney promised tohelp one of the Indian tribes re-open their casino. This was one of thebiggest frauds of all, because Abramoff, in early 2002, had justspent six months closing down an Indian casino in Texas, helpingto close down an Indian casino, which he convinced another tribe hewas working for, in Louisiana, threatened their profits.So he worked to close down the Tigua casino, outside of El Paso,and then, within days, literally days, 24, 48 hours after it was closed,he was on the phone with the Tiguas, saying, "Hey, you've got aproblem. I think it's outrageous what they did to your casino. Thisis just intolerable. I think we can help you get it re-opened." He was inviteddown to El Paso, he wrote Scanlon, "Fire up the jets baby, we're goingto El Paso," they flew down in their private jet, and within a coupleweeks they'd signed a contract with the Tiguasfor 4 million dollars, to help this poor Indian tribe.I visited the Tiguas, I visited the Louisiana tribe, I visited theMichigan tribe, these casinos are, while we may associate a lot ofcasinos in this country with corruption and addiction, and I'm not going tosay that Indian casinos don't have some problems, but many of theseIndian casinos became economic mainstays for these tribes. These tribesstarted opening them in the early 90s, after Congress passed a law thatallowed Indian gaming, and in the case of the Tiguas, it was generating60 million dollars a year. The unemployment level of the tribe had gonefrom about 50% to zero, while the casino was going. And a lot of the moneywas put, interestingly, into health, education, and welfare programs. I sawa fantastic health facility they built for 20 million dollars with casino profits.Anyway, the Tigua story is outrageous because it involved a kind ofdouble dealing here, shutting them down first to help their longtime client inLouisiana, and then going to them within days and saying, Let us helpyou re-open it. They went to Bob Ney, one of their best friends in Congress,and they told Ney, they said, "Would you be able to put aprovision on an election reform bill?" Ney said, Okay, and Ney apparentlywas interested in going for some golf in Scotland too. Abramoff wasfamous for taking golf junkets to Scotland, he'd taken one with DeLay in2000, DeLay being his closest ally in Congress, who I should say is still underinvestigation in this scam, even though he's left Congress, but Bob Neywanted to go and St. Andrews, one of the most lavish trips inthe golf world, and one of the most expensive, so they planned a trip.To finance these trips they typically went to their clients. So theywent to the Tiguas and said, "Can you put up $50,000?" The Tiguas had justgiven $300,000 in campaign contributions, mostly to Republicans thatAbramoff had asked for a couple weeks before. So-- maybe becausethey were financially strapped, maybe because they were a littlecynical, they abstained from the contribution, but Abramoff kept pressingthem finally they went to another tribe in Texas. The Tiguas approached afellow tribe, who also could have benefited from this legislationthat he was going to supposedly introduce for them. Never happened.But another tribe kicked in $50,000 to a private charity, Abramoffdidn't do things openly much of the time, he set up conduit shelves, charities,non-profits run by friends, that became laundromats of sorts, pass-throughs,conduits, so his own private charity, called the Capital AthleticFoundation, of all things, which was on its website supposed to begiving $5,000, $10,000 grants to the boys clubs and the YMCA.I'm not making this up. It sounds zany and it is zany, but this is how thisguy operated. And I've said in my book, and I've said in a number of mytalks, that some of this stuff is so crazy, it reads, it sounds like, it couldhave been a script that Mel Brooks might have written for a movie likeThe Producers, if you've seen The Producers. It's totally wacky,the frauds and the scams were as wild as they come.Anyway, the junket took place in 2002, financed by another Indiantribe, and another gambling company, and a few other folks. The legislationnever happened. It was one of the favors that Ney acknowledged hedid for Abramoff. In his plea Ney said, basically, I sold my office toJack Abramoff, and a foreign businessman who is unrelated tothis scandal. Ney got tens of thousands of dollars, not only in the golf tripto Scotland, but in restaurant meals in Washington. Abramoff wasnot your typical lobbyist, he was an extraordinary entrepreneur, hustler,he had his own restaurant that he opened in 2002, and it became awatering hole, fund raising site in Washington that Republicans flocked to,some Democrats, but mostly Republicans, they promised liberalservings for Conservatives at the restaurant, something like that, I'mparaphrasing this, but Ney got thousands of dollars of free meals,the restaurant supposedly had accomplishedseveral other members of Congress, did very well there.DeLay allegedly, and maybe a member from California I shouldmention named John Doolittle, who is one of four members of Congress,Doolittle from Sacramento, is under scrutiny, he has not been chargedwith anything, Doolittle has said he's done nothing wrong, but Doolittledid receive tens of thousands of dollars in contributions from Abramoffand his tribe of clients, and form a very unusual foreign client in the part ofJack's infamous resume, was his representation of a US Territory in thePacific called the Commonwealth of the Northern Marianas, it's aterritory that is famous, or infamous, again, for its garment industry, where itemploys immigrant workers, mostly from China and also in Asia,women who are paid close to sweatshop wages, real sweatshop wages,they have an exemption from the US minimum wage laws. And Abramoffwas hired to preserve this exemption. And exemptions from USlabor laws. He did it for almost a decade, his primary backer in Congresswas Tom DeLay on this. Doolittle was also a supporter on this.Doolittle, besides getting campaign contributions, had another wayin which Abramoff helped him, and that was-- may have helped him, probablyhelped him Abramoff hired Doolittle's wife for 66,000 dollars,supposedly to help organize a fundraiser for his capital athletic foundations,come back here too. The fundraiser never happened, but she was paid$66,000 nonetheless. I think Doolittle is under intense scrutiny, and hiscampaign, as you may know, has suffered as a result of that. Senator ConradBurns of Montana is another Abramoff friend who got $150,000 incontributions, more than anybody in Congress.Burns' campaign has been very hard-hit by this.Richard Pombo, another Californian, is not, as far as I know, underinvestigation in the conspiracy case, but Pombo, too, was an ally ofAbramoff's, second-tier, not quite up there with the big four: Ney,Doolittle, Burns and DeLay. But Pombo was an ally and he toowas somebody whose campaign has been fairly hard-hit by this whole scandal.Of course, Pombo's also been battered by environmental groups,who seem to have a few gripes against him. These are some of thehighlights of the scandal. It is an incredible story. It's not going to endwith the election. These other investigations are under way.There's at least one former Bush Administration official, the numbertwo in the interior department, Steven Griles, who was an energy lobbyistbefore the Bush administration and he left about a year ago,year and a half ago, went back into lobbying. Once again, an energylobbyist. He is being looked at in the scandal and while Grover Norquist, oneof Abramoff's oldest friends, along with Ralph Reed, Grover Norquist beingthe leader of the powerful Americans for Tax Reform, who benefited fromAbramoff's clients, who allowed his organization to be used as a conduitagain to funnel some of the funds to Ralph Reed, the former Christian Coalitionleader who did not want publicity. He had to have his monies. The 6 milliondollars he was paid by Abramoff's clients sent through conduits and shells,Norquist group is maybe facing some scrutiny, tax issues, not criminal issues.Reed, as far as we know, is not facing criminal issues but his reputationtook such a beating in this scandal that as you probably know, his race, hisfirst race ever for elected office this year, in the small position of Lt. Governorof Georgia, which he was considered an absolute shoo-in for late last yearwhen he announced the race, Reed, who'd been a top advisor to theBush campaign in 2004, helped run strategy for five southern states, and wasa trusted confidant of Carl Rove, former head of the GOP in Georgia.He was seen as all but, you know, in office. And then the scandal newsstarted to pick up. More and more details of how he received his moneyfunneled through conduits because he didn't want his reputation as anopponent of gambling stained by the fact that he'd worked for Abramoff'sgambling clients, his niche, his work was mainly to help Abramoffprotect his gambling clients by knocking off other tribes and other gamblingentities nearby. That might have posed threats to Abramoff's clients.So Ralph Reed took his Rolodex, his old friends from the ChristianCoalition days, called them up, said "Hey, we have a good cause. Howwould you like to help rally social conservatives, religious conservatives,against that casino down the road there?" Most of these peopledid not know, but Reed surely did, that the reason they wereworking so hard to knock off these casinos was because theyposed a threat to Abramoff's client.These are extraordinary scams, it's an extraordinary corruption scandal,it's going to be going on for months more, and I'm glad you all are interestedin it, and I'd be glad to answer any questions that you have.