S. HRG. 108–720

TRIBAL LOBBYING MATTERS

HEARING

BEFORE THE

COMMITTEE ON INDIAN AFFAIRS

UNITED STATES SENATE

ONE HUNDRED EIGHTH CONGRESS

SECOND SESSION

ON

OVERSIGHT HEARING REGARDING TRIBAL LOBBYING MATTERS, ET AL

SEPTEMBER 29, 2004

NOVEMBER 17, 2004

WASHINGTON, DC

(
TRIBAL LOBBYING MATTERS
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96–229 PDF 2005

S. HRG. 108–720

TRIBAL LOBBYING MATTERS

HEARING

BEFORE THE

COMMITTEE ON INDIAN AFFAIRS

UNITED STATES SENATE

ONE HUNDRED EIGHTH CONGRESS

SECOND SESSION

ON

OVERSIGHT HEARING REGARDING TRIBAL LOBBYING MATTERS, ET AL

SEPTEMBER 29, 2004

WASHINGTON, DC

(
COMMITTEE ON INDIAN AFFAIRS

BEN NIGHTHORSE CAMPBELL, Colorado, Chairman

DANIEL K. INOUYE, Hawaii, Vice Chairman

JOHN McCAIN, Arizona,

PETE V. DOMENICI, New Mexico

CRAIG THOMAS, Wyoming

ORRIN G. HATCH, Utah

JAMES M. INHOFE, Oklahoma

GORDON SMITH, Oregon

LISA MURKOWSKI, Alaska

KENT CONRAD, North Dakota

HARRY REID, Nevada

DANIEL K. AKAKA, Hawaii

BYRON L. DORGAN, North Dakota

TIM JOHNSON, South Dakota

MARIA CANTWELL, Washington

PAUL MOOREHEAD, Majority Staff Director/Chief Counsel

PATRICIA M. ZELL, Minority Staff Director/Chief Counsel

(II)
(III)

C O N T E N T S

Page

Statements:

Abramoff, Jack, Washington, DC .................................................................... 14

Campbell, Hon. Ben Nighthorse, U.S. Senator from Colorado, chairman,

Committee on Indian Affairs ....................................................................... 1

Conrad, Hon. Kent, U.S. Senator from North Dakota .................................. 9

Dorgan, Hon. Byron L., U.S. Senator from North Dakota ............................ 11

Inouye, Hon. Daniel K., U.S. Senator from Hawaii, vice chairman, Committee on Indian Affairs ............................................................................... 4

Johnson, Hon. Tim, U.S. Senator from South Dakota .................................. 12

Lowell, Abbe, attorney ..................................................................................... 14

McCain, Hon. John, U.S. Senator from Arizona ............................................ 5

Milanovich, Richard, chairman, Agua Caliente Band of Cahuilla Indians . 19

Petras, Christopher, former legislative director, Saginaw Chippewa Indian Tribe of Michigan ................................................................................. 38

Sprague, Bernie, subchief, Saginaw Chippewa Indian Tribe of Michigan ... 22

APPENDIX

Prepared statements:

Milanovich, Richard ......................................................................................... 51

Petras, Christopher .......................................................................................... 54

Sprague, Bernie ................................................................................................ 53

Additional material submitted for the record:

Documents most pertinent to matters covered by this hearing .................... 57

NOVEMBER 17, 2004

Statements:

Campbell, Hon. Ben Nighthorse, U.S. Senator from Colorado, chairman,

Committee on Indian Affairs ....................................................................... 219

Conrad, Hon. Kent, U.S. Senator from North Dakota .................................. 227

Dorgan, Hon. Byron L., U.S. Senator from North Dakota ............................ 227

Hisa, Carlos, Lieutenant Governor, Ysleta Del Sur Pueblo .......................... 231

Inouye, Hon. Daniel K., U.S. Senator from Hawaii, vice chairman, Committee on Indian Affairs ............................................................................... 231

McCain, Hon. John, U.S. Senator from Arizona ............................................ 222

Schwartz, Marc, president, Marc Schwartz Partners, Inc. ........................... 228

APPENDIX

Prepared statements:

Campbell, Hon. Ben Nighthorse, U.S. Senator from Colorado, chairman,

Committee on Indian Affairs ....................................................................... 251

Dodd, Hon. Christopher J., U.S. Senator from Connecticut ......................... 252

Hisa, Carlos (with attachment) ....................................................................... 254

Schwartz, Marc ................................................................................................. 276

Additional material submitted for the record:

Documents most pertinent to matters covered by this hearing .................... 284

(1)

TRIBAL LOBBYING MATTERS

WEDNESDAY, SEPTEMBER 29, 2004

U.S. SENATE, COMMITTEE ON INDIAN AFFAIRS, Washington, DC.

The committee met, pursuant to notice, at 9:30 a.m. in room 216,

Hart Senate Building, Hon. Ben Nighthorse Campbell (chairman of

the committee), presiding.

Present: Senators Campbell, Inouye, Conrad, Cantwell, Dorgan,

Johnson, McCain, and Murkowski.

STATEMENT OF HON. BEN NIGHTHORSE CAMPBELL, U.S.

SENATOR FROM COLORADO, CHAIRMAN, COMMITTEE ON

INDIAN AFFAIRS

The CHAIRMAN. We will now move to the second matter on the

committee’s schedule this morning. The committee today is launching the first in a planned series of hearing into allegations of improprieties by Jack Abramoff and Michael Scanlon involving lobbying and so-called grassroots political activities on behalf of Indian

tribes.

To put these allegations into some context, Mr. Abramoff ran the

government affairs department for Greenberg Traurig, a Washington, DC law firm where he lobbied on behalf of several Indian

tribes. Mr. Scanlon owned Capital Campaign Strategies, a firm

that provided grassroots political support in the form of coalition

building, letter writing and telephone campaigns.

The allegations that touched off this committee investigation

came to light earlier this year in a series of newspaper articles. The

articles alleged that Mr. Abramoff convinced some of his tribal clients to retain Mr. Scanlon’s firm. Mr. Scanlon charged the tribes

exorbitant fees, while producing very little work, and Mr. Scanlon

split the overcharges with Mr. Abramoff.

Among the specific charges in the original and follow-up articles

that were included as late as yesterday, Mr. Abramoff and Mr.

Scanlon received more than $45 million in fees from tribal clients.

Mr. Scanlon paid Mr. Abramoff $10 million that was not disclosed

to the tribes or to Greenberg Traurig. Mr. Abramoff convinced at

least one tribe to make donations to the Capital Athletic Foundation, a local charity which the press reported Mr. Abramoff supports, and Mr. Abramoff and Mr. Scanlon may have influenced tribal elections.

While our investigation is continuing, we have come to some very

disturbing conclusions. That is, the accusations in the newspapers
2

were not entirely accurate. In fact, the truth is it is much worse

than as reported. The articles vastly understated both the amounts

the tribes paid to Mr. Scanlon and the amounts he gave to Mr.

Abramoff. In fact, all told, six tribes paid more than $66 million to

Mr. Scanlon, and Mr. Abramoff received more than $21 million

from Mr. Scanlon for his share of the scheme.

These are rather eye-popping sums of money, to be sure. As you

might guess, it appears that Mr. Scanlon and Mr. Abramoff did not

want a lot of people to know how much money they were making.

The committee’s investigation has revealed that Mr. Abramoff did

not inform his partners at the Greenberg firm of this arrangement.

Neither did he or Mr. Scanlon disclose this arrangement to their

tribal clients.

The allegation that concerns me the most is that Mr. Abramoff

and Mr. Scanlon may have tried to manipulate the outcomes of

tribal elections for their own personal profit. Our investigation has

found in at least two instances, Mr. Abramoff and Mr. Scanlon

sought to profit by becoming involved in attempting to manipulate

tribal elections. They helped elect tribal council members at no

charge, but apparently with the understanding that they would be

compensated at a later date.

Shortly after successful campaigns by the candidates Mr.

Abramoff and Mr. Scanlon supported, they solicited and received

multimillion dollar contracts aided by the tribal council members

that they helped elect. Clearly, these circumstances raise serious,

but unanswered, questions about whether there was an explicit or

implicit quid pro quo, ‘‘we get elected and then you will give us big

money contracts.’’

Today, the committee will hear testimony from individuals on

both sides of these allegations. Their testimony will shed considerably more light on the information that I have discussed so far. In

recovering the information that I have discussed so far, the committee and its staff has combed through literally thousands of

pages of documents. While these documents were available to committee members prior to this hearing, they have not been available

to the public.

To assist the members as well as the general public, the committee staff has prepared those documents most pertinent to the matters covered by this hearing. I now offer in the form of a motion

these documents for the record, and move that they be entered into

the record at this hearing.

Senator INOUYE. Second.

The CHAIRMAN. Senator Inouye seconds it. Those in favor say

aye.

[A chorus of ayes.]

The CHAIRMAN. Are there any opposed?

[No response.]

The CHAIRMAN. Hearing none, that will be included. All the documents will be part of the record.

[Referenced documents appear in appendix.]

The CHAIRMAN. Now, I will relay in brief the story the documents

provide on how Mr. Abramoff and Mr. Scanlon successfully manipulated tribal elections for their own profit.
3

In the case of the Agua Caliente Band of Cahuilla Indians, who

we will hear from later today, Mr. Scanlon did everything but actually vote for the tribal candidates that he supported. Just before

the 2002 Agua Caliente tribal election, Mr. Scanlon asked Mr.

Abramoff in an e-mail:

How much do you want me to spend on the AC race, the Agua Caliente race? I

have to get a team out there as soon as possible and to rotate a new team in after

that, so travel is going to run about $20,000 and materials about $5K to $10K.

Should we go for it?

Mr. Abramoff’s instructions were, yes, go for it big time, which

is just what they did. Mr. Scanlon’s own documents now on the

record show that he ran the overall strategy, crafted the messages,

wrote his candidates’ speeches, coordinated a candidates night, ran

the get-out-the-vote drive, and even counted the votes, which

should really raise some eyebrows.

Shortly thereafter, Mr. Scanlon pitched his business to the Agua

Caliente and his own successful candidate made the motion to approve his contract over the objections of long-time Chairman Richard Milanovich.

The same pattern occurred at the Saginaw Chippewa Tribe of

Michigan. We will hear their story later also. For example, just before the Saginaw Chippewa elections of 2001, Mr. Abramoff told

Mr. Scanlon:

I had dinner with Chris Petras of the Sag-Chip. He was salivating at the $4 million to $5 million program described to him. Is that enough? Probably not. They

have their primary for tribal council on Tuesday which should determine if they are

going to take over.

That is, take over the general election in November.

He is going to come in after the primary with the guy who will be the chief if

they win, a big fan of ours already, and we are going to help him win. If he wins,

they will take over in January and we will make millions.

By the way, we are having some of the e-mails blown up and

shown to the public. You may or may not be able to read them, but

I have asked staff just to try to keep up with my presentation by

rotating those charts.

The day after the election in which seven of the eight candidates

running as the slate of eight to one, Mr. Scanlon sent out the following e-mail to his employees and Mr. Abramoff:

Well, team, last night was amazing. The slate of eight kicked ass, and I want to

thank all of you for helping out and watching the bottom line. We had less than

3 weeks to take 8 guys we never met before and get them elected. It was a great

plan and great execution by a great team. Just to recap, we elected 7 out of our

slate of 8. We now control 9 of the 12 seats on the Council.

I was wondering who ‘‘we’’ is as I was reading that e-mail.

Maynard Kahgebab, who is the elected chief of the organizational meeting on December 4 and hopefully we will be doing some future work for the tribe in the near

future. That makes us two-to-one in tribal elections this year.

Earlier this year, the slate of eight were voted out of office, due

largely to the allegations at the heart of this investigation. Mr.

Abramoff financed a recall effort run by the ousted tribal council.

I will close my opening statement by bringing to light one additional matter that I find perhaps most troubling on the personal

record. It appears from their own words, Mr. Abramoff and Mr.

Scanlon held their tribal clients in absolute contempt, clients, mind
4

you, that paid them millions of dollars. E-mails obtained by the

committee show that they regularly referred to their clients using

contemptuous, even racist language.

Allow me to give you one example I am talking about. In an email discussing a dinner meeting with a client, which is now part

of the record, Mr. Abramoff asked Mr. Scanlon to meet with a client. The reason Mr. Abramoff could not attend:

I have to meet with the monkeys from the Choctaw Tribal Council. You need to

close the deal with a client.

Mind you that these ‘‘monkeys,’’ as Mr. Abramoff refers to the

tribal council of the Mississippi Band of the Choctaw Indians, had

enriched him over a 5-year period with over $7 million in lobbying

fees. The story the committee will hear today using Mr. Abramoff’s

and Mr. Scanlon’s own e-mails and documents is not a pretty one.

It is a story of greed run amok. It is a story of two already powerful, wealthy men lining their own pockets with the hard-earned

money of people whom they held in contempt and low regard.

I will have questions as we move along, but I would like to yield

to Vice Chairman, Senator Inouye, for his opening statement, then

Senator McCain.

Senator INOUYE. Thank you very much.

STATEMENT OF HON. DANIEL K. INOUYE U.S. SENATOR FROM

HAWAII, VICE CHAIRMAN, COMMITTEE ON INDIAN AFFAIRS

Senator INOUYE. For the past 7 months, as noted by the chairman, newspapers and journals of national renown have been reporting on the findings of their research into allegations that Indian tribal governments have engaged the services of professional

lobbyists and so-called grassroots organizations and the costs associated with those contracts.

Some have asserted that the amounts charged to tribes have

been excessive or that revenues received by those employed by the

tribal governments far exceeded the value of the products and services provided to the tribes. Sadly, excessive fees and large profits

are part of everyday life in our Nation’s capital. Ordinarily, they

may not amount to a violation of Federal law.

With that in mind, however, if the allegations of interference in

the election processes of tribal governments and the purposeful manipulation of circumstances to solicit business from the tribes are

proven to be accurate, we will have to explore whether any of the

actions taken are violations of criminal law.

Today, the committee is delving into just two of a series of dealings with at least six Indian tribal governments. As I understand

it, there will be further hearings to follow this one. So I join my

colleagues on the committee today to listen and to learn what may

have taken place, and whether the activities described constitute a

pattern and practice of dealings that are either inappropriate or illegal.

Therefore, I fully support my chairman in his decision to initiate

this investigation because if proven true, the allegations are by any

measure deeply troubling and profoundly serious.

Mr. Chairman, it saddens me that after the glorious events of

last week, when thousands of Native people came to our National

Mall to celebrate the opening of the National Museum of the Amer-
5

ican Indian, and what we all hoped to be the beginning page of a

new chapter in our Nation’s relations with the first Americans,

that we must now turn our attention to something that at the minimum appears to be another most unseemly manifestation of the

exploitation of the Native people of this land.

Mr. Chairman, this is not a happy matter. I think I would rather

be almost anywhere else today, but as members of the Senate Committee on Indian Affairs, we take our responsibility seriously. So I,

as I suspect all of my colleagues on this committee will do, will reserve judgment until all the facts are brought to light.

I thank you, sir.

The CHAIRMAN. I thank my colleague.

Senator McCain.

STATEMENT OF HON. JOHN MCCAIN, U.S. SENATOR FROM

ARIZONA

Senator MCCAIN. Thank you, Mr. Chairman.

I want to thank you and the vice chairman for your tremendous

effort on behalf of this investigation and your continued dedication

and effort of many years on behalf of Native Americans.

Mr. Chairman, etched in the history of our great Nation is a long

and lamentable chapter about the exploitation of Native Americans. It began with the sale of Manhattan and has continued every

since. Every kind of charlatan and every type of crook has deceived

and exploited America’s native sons and daughters.

While the accounts of unscrupulous men are sadly familiar, the

tale we hear is not. What sets this tale apart, what makes it truly

extraordinary, is the extent and degree of the apparent exploitation

and deceit. Earlier this year, the Washington Post reported that

Jack Abramoff, and influential lobbyist, together with Michael

Scanlon, a self-styled public relations executive and former Capitol

Hill staffer, collected over $45 million in 3 years from a handful of

Indian tribes around the country.

In the case of one tribe, not the subject of today’s hearings, the

funds were allegedly paid from accounts reserved for tribal housing, education and health care. That same tribe and another reportedly paid millions of dollars into an outfit called the American

International Center, a self-proclaimed think-tank run by two of

Mr. Scanlon’s buddies at Rehoboth Beach, one a yoga instructor

and the other a lifeguard.

Even in this town where huge sums are routinely paid as the

price of political access, the figures are astonishing. But what the

tribes actually received for such astronomical sums is mystifying.

In the 7 months since the article ran, the committee on Indian Affairs has worked with my staff on the Commerce Committee to examine the relationship between Mr. Abramoff and Mr. Scanlon and

their relationship with the Indian tribes they represented. I am

pleased to report that we now have the cooperation of all of the

tribes mentioned in the Post article, along with others not mentioned.

Even Chief Phillip Martin of the Mississippi Band of Choctaw Indians, who defended Mr. Abramoff at the outset of this investigation, wrote last month in a letter to Chairman Campbell and me

that, quote:
6

In the light of information we have recently obtained from various sources, it now

appears that our tribe may in fact have been the victims of serious wrongdoing by

Abramoff and Scanlon. Thus, despite my prior concerns, I appreciate your committee’s work on this matter.

I thank Chief Martin for his sentiments and I extend my gratitude to all the tribes cooperating in this investigation.

I am especially grateful to the Saginaw Chippewa Indian Tribe

and the Agua Caliente Band of Indians who are participating in today’s hearings. Both tribes have cooperated with us since the beginning. I commend the tribes and their leaders for having the wisdom to understand that this investigation is not an attack on tribal

sovereignty, for displaying the courage to cooperate in the face of

their critics, and for having the perseverance to see this through

until the bitter end.

We have also obtained and are grateful for the cooperation of Mr.

Abramoff’s former employer, Greenberg Traurig, which like his

former clients may have been deceived by this vainglorious and

once-powerful rainmaker.

Not surprisingly, we have not received the voluntary cooperation

of Mr. Abramoff and Mr. Scanlon. We have had to subpoena documents from Mr. Abramoff and Mr. Scanlon. Even at this late date,

their production of documents remains incomplete. I am told Mr.

Scanlon and his attorney have frustrated the committee’s attempts

to serve Mr. Scanlon with a subpoena for this hearing. Last I had

heard, Mr. Scanlon was dodging the U.S. Marshals attempting to

serve him.

I want Mr. Abramoff and Mr. Scanlon to know that their failure

to cooperate in the face of compulsory process will not be tolerated,

and their attempt to slow-roll this committee will not be brooked.

Once the chairman has ruled on their outstanding objections, I will

urge the committee to pursue contempt if their compliance with the

subpoenas is not immediately forthcoming. The time for games has

ended.

Despite Mr. Abramoff’s and Mr. Scanlon’s obstinence, the committee has begun to unravel the complex and tangled web they

wove. In the case of both tribes testifying today, the documents

show that Mr. Abramoff and Michael Scanlon systematically

sought out impressionable tribal leaders and representatives, seduced them with promises of power and prestige, and helped them

obtain positions of power within their tribes. Once in power, their

allies on the tribal council steered multimillion dollar contracts to

Mr. Abramoff’s lobbying firm and Mr. Scanlon’s PR company.

Mr. Abramoff also directed the tribes to donate generously to a

long list of political action committees and candidates, think-tanks

and charities. As the Washington Post reported only yesterday,

prominent among the charities was the Capital Athletic Foundation, Mr. Abramoff’s personal charitable foundation which he primarily used to fund an all-boys school he established. Mr. Abramoff

and Mr. Scanlon did so all the while privately deriding and maligning their clients.

Chairman Campbell described for us Mr. Abramoff’s and Mr.

Scanlon’s interference in tribal elections and governance, and revealed the utter contempt these men held for their clients. But to

truly understand this story and appreciate the depth of their mis-
7

conduct, we need to consider the interference and contempt against

the backdrop of the huge fees these men connived from the tribes. In addition to the $150,000 to $180,000 per month retainers the

tribes paid to Mr. Abramoff for lobbying services, it was widely reported that at Mr. Abramoff’s direction, the tribes paid Mr. Scanlon

over $45 million for ‘‘grassroots activity.’’ It was also widely publicized that unknown to the tribes, Mr. Abramoff received up to $10

million of these funds from Mr. Scanlon.

Financial records and internal e-mails reviewed by this committee establish that those figures, while shocking, are inaccurate. The

amounts paid to Mr. Scanlon and the amounts he paid to Mr.

Abramoff are much higher. Mr. Abramoff and Mr. Scanlon’s accounting, bank and tax records establish that between 2001 and

2004, six tribes paid more than $66 million to Michael Scanlon’s

company, Capital Campaign Strategies, which also did business as

Scanlon, Gould Public Affairs. The tribes include the Coushatta

Tribe of Louisiana, the Mississippi Band of Choctaw Indians, the

Saginaw Chippewa Indian Tribe of Michigan, the Agua Caliente

Band, the Tigua Indians of Ecelta del Sur Pueblo of El Paso, and

Pueblo Sandia Tribe of New Mexico.

These same accounting, bank and tax records clearly indicate

that Capital Campaign Strategies paid Jack Abramoff personally

and Kay Gold, a company owned and controlled by Mr. Abramoff,

over $21 million. The $21 million appears to be one-half of Capital

Campaign Strategies’ profit from its Indian client revenue over 3

years.

Let me emphasize what the $66 million figure does not include.

The $66 million does not include payments made by the tribes for

lobbying services provided by Greenberg Traurig. The $66 million

does not include the substantial payments made by these tribes directly to other entities owned or managed by Abramoff, such as the

Capital Athletic Foundation. The $66 million does not include the

substantial political and dubious charitable contributions that the

tribes made at Mr. Abramoff’s direction.

It is my hope the committee will address these payments at an- other time and another hearing. The $66 million only includes the

payments by the tribes to Mr. Scanlon’s Capital Campaign Strategies. It is those sums that we focus on today.

The first question we need to ask is why? Why did Mr. Scanlon

pay Mr. Abramoff half of his profit? After all, in his interview with

the Post reporter, Mr. Abramoff denied having any financial interest in Mr. Scanlon’s companies. The answer is surprisingly simple.

Mr. Abramoff and Mr. Scanlon were partners. Their partnership

apparently began over 3 years ago on June 18, 2001. In an e-mail

to Mr. Abramoff, Mr. Scanlon set forth his vision. Mr. Abramoff

would develop the client base and Mr. Scanlon would serve them.

In Mr. Scanlon’s own words:

Bottomline, if you help me get CCS a client base of $3 million a year, I will get

the clients served and the firm acquired at $9 million, we can split up the profits.

What do you think?

Lest there be any doubt on this point, one year later, Mr.

Abramoff extolled his partner’s virtues in an e-mail. After Mr.

Scanlon reported on the receipt of $3 million from the Louisiana

Coushatta for undisclosed services, Mr. Abramoff replied:
8

You are a great partner. What I love about our partnership is that when one of

us is down, the other is there. We are going to make dollars for years together.

Scanlon was equal in his enthusiasm, ‘‘Amen. You’ve got it boss.

We have many years ahead.’’

What is wrong with this relationship, some may ask? Possibly

nothing, had it been disclosed to the tribes, but it never was. Jack

Abramoff, the tribes’ trusted lobbyist and adviser, instructed the

tribes to hire Michael Scanlon for millions of dollars, but he never

disclosed that he would receive about half of the net proceeds from

the multimillion dollar contracts. In fact, it appears he hid his relationship with Mr. Scanlon from just about everyone.

In a March 25, 2002 e-mail, Mr. Abramoff writes to a close associate and confidante about his personal financial statement, ‘‘No

one knows about the CCS stuff.’’ Indeed, they did not. Yet Jack

Abramoff owed the tribes he represented a duty, a duty to disclose

his financial stake in the multimillion dollar contracts he was

steering Michael Scanlon’s way. That he and Scanlon did not speak

up was immoral. It was unethical and ultimately it may have been

illegal.

I know that Mr. Abramoff has attempted in the past to deny that

he directed the tribes to hire Mr. Scanlon. His e-mails tell another

story. In a December 2, 2004 e-mail, Mr. Abramoff wrote to Chris

Petras, the former legislative director of the Saginaw Chippewa

Tribe about racing initiatives in Michigan:

Where is Scanlon on this? What is he doing? Have you guys pushed the button?

We need to get him firing missiles. How do we move it faster? Please get the council

focused on this as soon as you can. Every day we lose now is going to hurt.

Mr. Abramoff apparently copied or forwarded the e-mail to Mr.

Scanlon, whose only reply was, ‘‘I love you.’’

What did the tribes receive for the millions of dollars they paid

Capital Campaign Strategies? According to some tribes, not much.

The Committee continues to investigate this issue. We do know

however, that Mr. Scanlon subcontracted out a substantial amount

of work to what appeared to be legitimate service providers. He did

so at an unbelievably small fraction of what he charged the tribes,

thus explaining the unconscionable amounts that he and Mr.

Abramoff were able to put into their pockets.

A February 20, 2003 e-mail from Mr. Abramoff to his accountant

last year sheds considerable light on how much money Jack

Abramoff and Michael Scanlon pocketed. In that e-mail, Mr.

Abramoff wrote:

I think I understand what he [Michael Scanlon] did. We received $5 million into

CCS from which I guess I am write, DC requires a gross receipts tax franchise tax.

He divided the $5 million into three piles: $1 million for actual expenses and $2 million for each of us.

Two million dollars for each of us. That phrase alone explains

why Mr. Abramoff so fervently pushed Mr. Scanlon’s services on

the tribes. ‘‘Two million dollars for each of us’’ also explains what

the tribes got or did not get for their money.

Many of you are probably wondering where those many millions

of dollars went after falling into the pockets of Mr. Scanlon and Mr.

Abramoff. According to the records reviewed by the committee thus

far, it appears Mr. Abramoff used his share to sustain his restaurant ventures, Signatures and Stacks, and to finance Eshkol,
9

the all-boys school he established. Since the tribes stopped paying

Mr. Scanlon, however, Mr. Abramoff has had to close Stacks and

Eshkol. Meanwhile, Mr. Scanlon invested heavily in real estate and

securities.

At the end of the day, wherever the money went, it should be returned to the tribes where it belongs. The story does not end here,

and I know that the hearing today will undoubtedly raise as many

questions as it answers. To the aggrieved tribes and Native Americans generally, I say rest assured that this committee’s investigation is far from over. Together, we will get to the bottom of this

and hopefully in the end our efforts will help other tribes avoid

their own tragic tale in this shameful chapter of American history.

I thank you, Mr. Chairman.

The CHAIRMAN. Thank you, Senator McCain.

[Applause.]

The CHAIRMAN. We prefer that we do not display a lot of emotion

in this committee. It is a U.S. Senate committee. The only people

that are allowed to get real angry and show emotion will be Senator McCain and me. [Laughter.]

I would like to add to your voice, though, that Mr. Scanlon has

been very adept at avoiding the U.S. Marshals, but he will come

up for air. The Senate committee will be here, and sooner or later

he will come in under his own volition or be escorted by the U.S.

Marshals.

Do other Senators have comments? Senator Conrad or Senator

Dorgan? Senator Conrad, go ahead and we will do it in order of appearance.

STATEMENT OF HON. KENT CONRAD, U.S. SENATOR FROM

NORTH DAKOTA

Senator CONRAD. Thank you, Mr. Chairman. I thank the committee for holding this hearing and conducting these investigations. I

must say, this is about as bad as it gets. I believe there is criminal

conduct here and it needs to be pursued not only by this committee, but by law enforcement as well.

I was struck by the article in the Washington Post on Sunday.

The beginning paragraph says Washington lobbyist Jack Abramoff

and public relations consultant Michael Scanlon quietly worked

with conservative religious activist Ralph Reed to help the State of

Texas shut down an Indian tribe casino in 2002. Then the two

quickly persuaded the tribe to pay $4.2 million to try to get Congress to reopen it. If this is not cynical behavior, I do not know

what is.

On the one hand, it turns out Scanlon and Abramoff paid Ralph

Reed $4 million to conduct a campaign to close down a casino, at

the very time they are asking the casino to hire them so that it can

get reopened. One week later, after Mr. Abramoff met with the

Tiguas who were in danger of getting their casino shut down, a

Texas consultant employed by the tribe thanked Abramoff for his

visit and said he would push his proposal. Abramoff forwarded the

e-mail to Scanlon with the message, ‘‘This guy needs us to save his

ass.’’

It goes on to say, Ralph Reed, the conservative religious leader,

was paid $4.2 million by Abramoff and Scanlon for his work oppos-
10

ing several tribal casinos. There is an e-mail traffic that is laid out

in the paper in which Abramoff writes to Ralph Reed, ‘‘Great.

Thanks, Ralph. We should continue to pile on until the place is

shuttered,’’ referring to the casino.

Perhaps we could get one of our guys in the legislature to introduce a bill which

disqualifies from state contracts any vendor who provides goods or services to a casino in the state. This way, Cornyn can sit back and not be scared. Let one of our

tigers go get him. Do we have someone like this and can we get it introduced as

soon as possible?

This is the response from Ralph Reed:

We have tigers. The Texas legislature is only in session every other year. Let me

check. Good idea.

Abramoff back to Reed:

Even if we never get it passed, it will scare the you-know-what out of vendors

and make life tough on the tribe. We should do it in [some other place blocked out]

too.

In an e-mail to Ralph Reed on February 11, Abramoff did not

mention he had been in contact with the Tiguas. He wrote:

I wish those moronic Tiguas were smarter in their political contributions. I would

love us to get our mitts on their moolah. Oh, well, stupid folks get wiped out.

Reed’s response:

Wow. These guys are really playing hardball. Do you know who their consultants

are?

Abramoff responded:

Some stupid lobbyists up here who do Indian issues. We will find out and make

sure all our friends crush them like bugs.

Who were their friends?

Chairman CAMPBELL. If I might interrupt the Senator just for a

moment. There are six tribes we are going to be dealing with a succession of hearings. The Tiguas will be one of them.

Senator CONRAD. I appreciate that. We are supposed to be dealing with Mr. Abramoff this morning. These are questions I wanted

to ask him. Unfortunately, he has not appeared.

The CHAIRMAN. He will be here.

Senator CONRAD. I would just like to close by pointing out, after

Abramoff became their lobbyist, three tribes, the Saginaw Chippewa Indian Band, the Mississippi Band of Choctaws, and the

Coushatta Tribe of Louisiana, contributed more than $2 million to

the Capital Athletic Foundation. The Choctaws also gave $1 million

to the National Center for Public Policy Research. Saginaw Chippewa officials have told Federal investigators they made the donations because Abramoff told them it would impress DeLay, a fellow

golf buff whom Abramoff described in a 1995 letter to Arnold Palmer as a very close personal friend. It goes on to say the ties between

Abramoff and DeLay go back a long way. Since 1997, Abramoff and

his wife contributed $40,000 to DeLay’s political action committees,

and last year the Capital Athletic Foundation contributed $25,000

to the DeLay Foundation for Kids.

DeLay has also shown support for causes important to

Abramoff’s clients. A source close to Abramoff, who asked not to be

named because of the continuing grand jury investigation, said

Abramoff lobbied DeLay’s office to organize a June 2003 letter co-
11

signed by DeLay, House Speaker Dennis Hastert, Majority Whip

Roy Blount, and Deputy Whip Eric Cantor that endorsed a view of

gambling law benefitting the Coushatta’s desire to block gambling

competition by another tribe.

The letter sent to the Interior Secretary said the House leaders

opposed a plan by the Jena Band of Choctaws to open a casino at

a non-reservation site, expected at the time to be outside Shreveport, Louisiana, not far from a casino owned by the Coushattas.

The intent of the letter was to protect the income from the

Coushatta’s casino, about $300 million a year.

I will close with this. A lobbyist, V. Heather Sibbison, a lobbyist

at the time for the Jena Band, said:

I do this for a living. I have never seen a letter like that before. It was incredibly

unusual for that group of people, who do not normally weigh-in on Indian issues

to express such a strong opinion about a particular project not in any of their home

states.

This is a pattern of abuse that is so extraordinary. Over $50 million of payments to Mr. Scanlon; back payments by him of over $20

million to Mr. Abramoff; political contributions being funneled to

not only individual candidates, but political organizations through

this foundation which was a front organization, or so Mr. Abramoff

indicates in the Sunday paper, that they were using it as a front

organization.

If there are not violations of law here, Mr. Chairman and members of the committee, I think all of us know that this is the most

extraordinary pattern of abuse and criminal conduct that has come

before this committee in the entire 18 years I have served here.

I have searched for language that would express what has been

done here. These people were engaged in behavior that is scuzzy,

outrageous. We have got to reach conclusion on this, Mr. Chairman

and members of the committee, and hold these people to account.

I am very glad to hear that the chairman will insist that these people be brought before this committee and be brought before the bar

of justice, because they deserve the full punishment that is provided for in the law.

The CHAIRMAN. Thank you, Senator.

Senator Dorgan, did you have a comment?

STATEMENT OF HON. BYRON L. DORGAN, U.S. SENATOR FROM

NORTH DAKOTA

Senator DORGAN. Mr. Chairman, let me be brief, because I think

your statement, the statement by Senator McCain, and others have

described what we have in front of us. I, too, was searching for adjectives, and you really cannot find adjectives that describe the passion I feel about what has happened here.

This is a circumstance, in my judgment, where having looked at

the material that has been presented here and also much additional material that is available, but has not yet been disclosed—

that is a cess pool of greed. It clearly is a disgusting pattern of certainly moral corruption and very likely criminal corruption.

I think that we have an obligation to follow this trail wherever

it leads to the very end. How did this money go from the tribes to

these consultants? Where did it end up? How did it end up there?

What services were performed or not performed?
12

Let me just also say that my colleague from Arizona, with whom

I serve on the Commerce Committee, has very strongly asserted

here the need for Congress to be involved in this investigation, as

has my colleague from Colorado. For that, I noticed yesterday my

colleague from Arizona, Senator McCain, has been attacked for actively pursuing this investigation. Look, we do not have any choice.

The Senator from Arizona understands, as do I and others, that

there are several questions here. Was there any federal money, any

Federal dollars that we send to tribes that found their way back

into this stream? If so, what was it? Where did it go? How was it

used?

Second, was there an abuse of charities? It appears to me there

was, and we have Federal laws dealing with how that money is

used. And third, we established the framework for Indian gaming

through a commission, and we certainly have an obligation to understand what has happened here just from the standpoint of that

area, because that is the area that I think produced a substantial

amount of this money.

So let me commend Senator McCain. I think if there is a straight

shooter in this Congress, if one person is described as the straight

shooter, it is Senator McCain. He is an independent cuss who

causes some of us to grit our teeth from time to time, but he calls

things like they are. This is not about politics. It is about corruption. It is about a pattern of corruption that is disgusting.

When you see on the board that is put up the way these people

described their clients, it is just pathetic. And then you see, as I

think Senator McCain, Senator Campbell and my colleague Senator

Conrad have described, a couple of people who pay someone else

money to try to get a casino shut down so they can go approach

them and see if they can bilk them for some money to open them

up, not disclosing they helped try to shut them down, it is once

again a pathetic, disgusting example of greed run amuck.

My hope is, Mr. Chairman, that we follow this to the very end

and find out what happened, how it happened, and make sure that,

as my colleague indicated, that those responsible are held responsible before the bar of justice, and also that we understand whether

there are any legislative areas that we need to deal with as a result of all of this.

Mr. Chairman, thank you for calling this hearing.

The CHAIRMAN. Thank you.

Senator Johnson.

STATEMENT OF HON. TIM JOHNSON, U.S. SENATOR FROM

SOUTH DAKOTA

Senator JOHNSON. Thank you, Mr. Chairman. I will be very brief.

I appreciate your decision to hold this hearing. This hearing will

reveal a story about a highly sophisticated and extraordinarily cynical scam driven by a few individuals who appear to have an insatiable desire to line their own pockets and utter contempt for their

clients. Some tribes were taken in by a few individuals because, in

part, credible law firms were themselves taken in by this scam.

Unfortunately, con artists find ways of taking advantage of major

corporations and major players every day. One should be able to

assume that if he or she engages a top law firm in the Nation, that
13

he or she will receive professional service characterized by integrity. I know the Committee is continuing its investigation of this

matter, and hopefully this hearing will bring to light a deeper understanding of the outrageous facts and the laws that may have

been violated, the pattern of corruption that clearly is involved.

I am pleased to see that Chairman Milanovich and Sub-Chief

Bernie Sprague are here today. Hopefully their testimony will expedite this investigation of the Committee and lead to the parties

involved being held accountable and justice being done.

Mr. Chairman, I applaud and associate myself with the statements of my colleague from Arizona and the other comments and

the statements of the members of this committee this morning.

The CHAIRMAN. Thank you.

Any further comments? Senator Conrad?

Senator CONRAD. Mr. Chairman, might I just say that I understand a member of this committee has been attacked publicly for

his role in this investigation. Senator McCain has been attacked

and that, too, is just outrageous and beyond the pale. Senator

McCain has done I think a public service by coming forward. I

think you as well, Mr. Chairman, have done a public service by authorizing this investigation to go forward. All of us of both parties

need to stand and defend those who are attacked by people who

have engaged in I believe criminal conduct.

For them to attack a member of this committee is simply outrageous. If they think for 1 moment that they are going to intimidate Senator McCain, they have another think coming. Some of the

people who are masters in intimidation tried to intimidate him.

They spent 5 years trying. It did not work then. If they think anything they can do will equal what has been done to him already,

they have another think coming. He is going to find a lot of friends

standing with him, as these scumbags attack him.

Senator MCCAIN. I thank my friend from North Dakota. I appreciate it. [Laughter.]

The CHAIRMAN. One time in a disagreement, I described Senator

McCain as like hugging a cactus, but I did not really mean that.

[Laughter.]

I am going to pursue this with some further hearings. As my

friends know, I will be leaving, but it is highly likely Senator

McCain will be the new incoming chairman, as he was before of

this committee, and if there is anybody within hearing distance or

sight of this hearing today that thinks this is going to go away, you

are in for a surprise. It is going to be for a long time.

With that, we will start with our first panel. That would be Jack

Abramoff. If he will come and be seated. As we mentioned before,

Michael Scanlon is still hiding out somewhere. We have not been

able to serve him.

Now, I would also remind our witnesses, for Mr. Abramoff and

for those people following that are going to testify, that if you have

your counsel with you, they are allowed to respond to you, allowed

to talk to you, but they will not speak to the committee unless they

are responding to a particular question by one of the Senators.

Mr. Abramoff, I am sure you are aware of this, but by appearing

before this committee, you are under oath. I have been advised to

swear you in.
14

[Witness sworn.]

The CHAIRMAN. We will now proceed, if you have an opening

statement.

STATEMENT OF JACK ABRAMOFF, WASHINGTON, DC,

ACCOMPANIED BY ABBE LOWELL, ATTORNEY AT LAW

Mr. ABRAMOFF. Mr. Chairman, I would ask if you would entertain a procedural question by my counsel.

The CHAIRMAN. Yes; go ahead.

Mr. LOWELL. Thank you, Mr. Chairman.

I was curious, given the statements by the various members,

many of whom I know and many of whom know my deep respect

for the processes of this legislative body, whether the committee

has considered in light of the statements about wrongdoing, criminal conduct, it is Senate Rule Number 26-5(b)(3). That is the rule

which talks about when hearings are appropriately held in an open

session and in a closed session, and specifically the Senate’s own

rules asks the chairman and members to consider when they are

about to conduct hearings in which the activities will:

Tend to charge an individual with crime or misconduct, to disgrace or injure the

professional standing of an individual, or otherwise to expose an individual to public

contempt or obloquy, will be the kinds of hearings which ought not to be done in

open session.

I was curious whether or not the committee had considered its

rule and what its findings had been on that.

The CHAIRMAN. The committee did hear your objections. They

were duly noted. In a letter that I sent to you on September 20.

I overruled those objections and do so now.

Do you have an opening statement, Mr. Abramoff?

Mr. ABRAMOFF. Mr. Chairman, I would request and hope that

the committee will include in the record the correspondence that I

have sent through my counsel, because it does explain my situation

better than I am able to do so myself this morning.

The CHAIRMAN. Without objection, all that correspondence will be

included in the record.

[Referenced documents appear in appendix.]

Mr. ABRAMOFF. Otherwise, I am prepared to answer your questions, sir.

The CHAIRMAN. Let me get right to it. I know that other members have a lot of questions. So what we are going to do is I am

going to time everyone and give everyone 6 minutes, and we will

go back two or three times, if that is acceptable to Senator Inouye.

Let me just get right to it, Mr. Abramoff.

Senator MCCAIN. Mr. Chairman, I think this is simply a clerical

matter, but I ask unanimous consent that your responses to Mr.

Lowell and Mr. Abramoff be included in the record at this time.

The CHAIRMAN. Without objection, they will be included in the

record.

[Referenced documents appear in appendix.]

The CHAIRMAN. At one time or another, according to your emails, you and Mr. Scanlon referred to tribes as morons, stupid idiots, monkeys, f-ing troglodytes, which you defined as a lower form

of existence and losers.
15

I want to associate my comments with Senator Inouye. We just

opened the National Museum of the American Indian. It was to celebrate the people who have been here for thousands of years. I

have to tell you that I was very personally offended by those comments. I think of all the time they have suffered in America in the

last 400 years, they have a right to preserve their dignity.

My question concerning your definition of those clients is this:

Why would you want to work for people that you have that much

contempt for?

Mr. ABRAMOFF. Mr. Chairman, I respect the committee’s process.

That is why I am here today. But in light of the correspondence

that occurred between the committee and my counsel, including the

committee’s decision not to make any provisions for my testimony

through a grant of legislative immunity, I have no choice but to assert my various constitutional privileges against having to testify.

I hope that sometime soon I will be able to do so in order to present

all the facts.

The CHAIRMAN. We look forward to that.

Senator MCCAIN. Mr. Chairman, could I ask? I believe that it is

required that Mr. Abramoff specifically assert his fifth amendment

rights. I would rely on counsel, but from previous hearings, I think

that that is a requirement that he specifically state his constitutional right under the fifth amendment.

The CHAIRMAN. Would you like to do that, Mr. Abramoff? Exert

your fifth amendment rights if you are going to decline to answer

the questions of the committee?

Mr. ABRAMOFF. Yes, sir; the privileges that protect my testimony

include the first amendment’s right to petition Congress and free

association; the fifth amendment’s due process right to have adequate notice and opportunity to be heard; the separation of powers

doctrine; and the fifth amendment’s right for a person not to become a witness against himself.

Senator MCCAIN. Thank you, Mr. Chairman.

The CHAIRMAN. I thank you.

I am going to continue asking some questions, and you can just

keep dodging if you want to.

Do you refer to all of your clients with the same kind of terminology you used for Indians, that is, idiots, monkeys, morons, and so

on?

Mr. ABRAMOFF. I respectfully invoke the same privileges, sir.

The CHAIRMAN. Two of the tribal leaders that were paying you

millions of dollars were Chief Phillip Martin of the Mississippi

Band of Choctaws and Chairman Richard Milanovich of the Agua

Caliente Tribe, who I have known for years, both of them. This full

committee has known them for years. They are highly respected by

the committee, highly respected in the Indian community, which is

not a very big community. Literally every Indian leader in the Nation knows each other on a first-name basis. Why would you refer

to them in such despicable terms?

Mr. ABRAMOFF. I respectfully invoke the same privileges, sir.

The CHAIRMAN. Okay, thank you.

I want to ask about some of your e-mails provided to the committee by our investigators, which were shown on the screen and on

the tripods, too. On July 9, 2002, you sent an e-mail to Mr. Scanlon
16

which referred to some of your clients, let me read it to you. I will

eliminate the profanities to avoid those, but you can fill in the

blanks: ‘‘Are you f-ing kidding me? I hate those f-ing boy scouts.

What a bunch of a-holes.’’ We can fill in all the blanks. To which

Indians were you referring?

Mr. ABRAMOFF. I respectfully invoke the same privileges, sir.

The CHAIRMAN. These do not sound like the comments of an educated man. It sounded like the comments of somebody out of 150

years ago and some form of bigotry. Knowing your background, I

happen to have a very, very strong concern for Jewish people in

America, because in many cases they suffered in history the same

things that Indians did. I would have thought that you would have

had much more sensitivity to Indian people.

On the same day, July 9, you sent another e-mail to Mr. Scanlon.

It reads:

Did we get a CCS check from the Kay Gold today? It sounds good to me. As for

the $64,000, I want to use it to buy a car, I decided. Can we do it so neither one

of us pays taxes on it?

Now, I think the Internal Revenue Service [IRS], as well as the

members of this committee, might be interested in knowing your

response to that. The Kay Gold Company, as I understand from our

staff investigators, has no employees, no clients, and does not do

very much business. It is a consulting company that operates out

of your home. Would you speak to that?

Mr. ABRAMOFF. Sir, I guess I can be asked hundreds or thousands of questions today, but for each one, I must respectfully invoke the privileges that I have stated before.

The CHAIRMAN. I will give you that opportunity.

On an e-mail to Mr. Scanlon dated December 7, 2002, let me

read that to refresh your memory. It sounds, by the way, that it

seems to me that you really mind the tribes. Let me read that one:

Let’s do it. We really need more money, but you and I must meet to work out

a strategy to get things moving. We are missing the boat. There are a ton of potential opportunities out there. There are 27 tribes, which make over $100 million a

year, according to the New York Times piece on November 24. Can you have your

guys do the research and find out which tribes these may be? We need to get moving on them. Can you come to town this weekend?

Now, were you interested at all in helping poor tribes, or just the

rich tribes?

Mr. ABRAMOFF. I respectfully invoke the privileges stated, sir.

The CHAIRMAN. On January 7, concerning the Agua Caliente,

your e-mail said:

We should orchestrate this to happen and then fly out there to war-game with

them and rake in the big money. I will even give you a shot to recoup your losses

on the golf course if that happens.

Mr. Abramoff, it is obvious that you are not going to answer

questions for the committee. I am going to give other members an

opportunity to ask some too, however. This is not a court of law.

It is a Senate hearing. I should think that you would be concerned

about some of the people that you deal with, and not just reduce

everything down to a dollar figure. But this certainly is the court

of public opinion. I have a hunch that when we are all done, if you

intend to get any further Indian contracts, you might think about

looking for another line of work.
17

I yield to Senator Inouye.

Senator INOUYE. Thank you very much.

After listening to all of the statements and after having read articles, am I to assume that you did make a few dollars?

Mr. ABRAMOFF. Senator, I respectfully invoke the privileges stated.

Senator INOUYE. As a good citizen of the United States, did you

file an income tax return?

Mr. ABRAMOFF. Senator, I must respectfully assert the privileges

stated.

Senator INOUYE. And in your income tax return, how did you describe this income?

Mr. ABRAMOFF. Senator, I must invoke the privileges previously

stated.

Senator INOUYE. Mr. Chairman, obviously I will not get any response, so I yield the floor.

The CHAIRMAN. Before I turn to Senator McCain, though, you

dealt with a number of Indian tribes, Mr. Abramoff. Indian people

traditionally, they even with non-Indians often asked him if they

would invite them to smoke a pipe. It sounds maybe strange to people that do not know the culture, but Indian people believe that

when you smoke the pipe, your voice is carried to the Creator.

Hence, you have to tell the truth and you have to be honest because he is going to know what you said, because it is on the smoke

that goes up to him.

When you had any dealings with Indian tribes, did you ever participate in that ceremony with them, to speak the truth?

Mr. ABRAMOFF. Senator, I respectfully invoke the privileges already stated.

The CHAIRMAN. Thank you.

Senator McCain.

Senator MCCAIN. I have no questions, Mr. Chairman.

The CHAIRMAN. Senator Conrad.

Senator CONRAD. Thank you, Mr. Chairman.

Mr. Abramoff, I do not think you are doing yourself any favor

here by invoking repeatedly your fifth amendment rights. It is your

constitutional right, but many of these questions have nothing to

do with your possible criminal conduct. They are questions that are

outlined in e-mails that you wrote in which you disparage the very

people that you are working for and engaged in what appears to

be just an out-and-out scam. I do not know what else anybody

could say. I do not know what in your conscience you must have

been thinking.

Did you in fact send an e-mail to Mr. Ralph Reed on January 7,

2002 in which you said:

Great. Thanks, Ralph. We should continue to pile on until the place is shuttered.

Referring to an Indian casino.

Perhaps we could get one of our guys in the legislature to introduce a bill which

disqualifies from State contracts any vendor who provides goods or services to a casino in the State.

Did you send such an e-mail?

Mr. ABRAMOFF. Senator, I respectfully invoke the privileges previously stated.
18

Senator CONRAD. Did you receive an e-mail back from Mr. Reed

in which he said,

We have tigers. Texas legislature only in session every other year. Let me check.

Good idea.

Did you receive such an e-mail from Mr. Reed?

Mr. ABRAMOFF. Senator, respectfully I invoke the privileges previously stated.

Senator MCCAIN. Mr. Chairman, could I mention something to

my colleague?

The CHAIRMAN. If the Senator from North Dakota would yield?

Senator CONRAD. Yes.

Senator MCCAIN. We have other witnesses. This witness is not

going to respond.

Senator CONRAD. I have some more questions that I would like

to put to the witness to give him an opportunity to break from this

invocation of the fifth amendment to address what are e-mails that

have been attributed to him.

I would like to ask, did you, Mr. Abramoff, you and your partner,

your colleague Mr. Scanlon, give $4 million to Ralph Reed?

Mr. ABRAMOFF. Senator, I respectfully invoke the privileges previously stated.

Senator CONRAD. Did you send an e-mail to Mr. Reed on February 11, 2002 in which you did not indicate you had been in contact with the Tiguas, but you said, and I quote:

I wish those moronic Tiguas were smarter in their political contributions. I would

love us to get our mitts on that moolah. Oh, well, stupid folks get wiped out.

Did you send that e-mail to Mr. Reed?

Mr. ABRAMOFF. Senator, I respectfully invoke the privileges previously stated.

Senator CONRAD. And when the Tiguas fought back by running

ads in the Washington Post, did you receive an e-mail from Mr.

Reed that said:

Wow, these guys are really playing hardball. Do you know who their consultants

are?’’

Did you receive such an e-mail?

Mr. ABRAMOFF. Senator, I invoke the privileges previously stated.

Senator CONRAD. And when you received that e-mail, did you respond by saying:

Some stupid lobbyists up here who do Indian issues. We will find out and make

sure all of our friends crush them like bugs.

Did you send that e-mail, Mr. Abramoff?

Mr. ABRAMOFF. Senator, I respectfully invoke the privileges previously stated.

Senator CONRAD. And who are the friends that you are referring

to in that e-mail, Mr. Abramoff? Who are the friends that you will

use to crush your adversaries like bugs?

Mr. ABRAMOFF. May my counsel ask a procedural question at

this time?

The CHAIRMAN. If the Senator from North Dakota specifically

asks the counsel.

Senator CONRAD. I am not asking.
19

Senator MCCAIN. I would ask my friend from North Dakota

again, this is not appropriate because any citizen has the right to

invoke their protections and their rights. If we are not careful, we

are going to be badgering this witness. We have further hearings

and investigations and further panels of witnesses to appear before

us. So I ask my colleague from North Dakota, after having been

chairman of this committee and served on it for many years, that

we move on.

Senator CONRAD. I am prepared to move on. I wanted to ask

these questions of Mr. Abramoff. These are the questions I have

prepared to ask him. I think it is legitimate to ask Mr. Abramoff

these questions. These are e-mails that he is alleged to have written. I think this committee is as outraged as I am by these e-mails.

I think Mr. Abramoff should have to confront in public session the

e-mails that he himself authored, according to the record of this

committee.

I have gone through now those that I had prepared for question,

so I am prepared to yield at this point. But I would say to my colleagues, and I would say to you, Mr. Abramoff, shame on you.

Shame on you.

The CHAIRMAN. I thank the Senator.

Obviously, we were going to do several rounds, but there will be

no answers from this witness apparently, so we will go on to our

second panel.

If Richard Milanovich, the chairman of the Agua Calientes and

Bernie Sprague would come forward.

Mr. LOWELL. Mr. Chairman, we are excused?

The CHAIRMAN. Yes; you are excused. Excused for this hearing,

but will probably be called back. I might tell you that, counsel.

Senator INOUYE. Mr. Chairman, for the record, who was the attorney?

Senator MCCAIN. Mr. Abbe Lowell.

The CHAIRMAN. Mr. Abbe Lowell was the attorney.

Chairman Milanovich, Sub-Chief Sprague, would you please

stand and raise your right hand and state after me?

[Witnesses sworn.]

The CHAIRMAN. Thank you for appearing. We will start in that

order, with Chairman Milanovich first.

STATEMENT OF RICHARD MILANOVICH, CHAIRMAN, AGUA

CALIENTE BAND OF CAHUILLA INDIANS, ACCOMPANIED BY

STEVEN ROSS, ATTORNEY AT LAW

Mr. MILANOVICH. Thank you, Mr. Chairman.

May I digress from my prepared statement, sir, members of the

committee?

The CHAIRMAN. That will be fine. Your complete written testimony will be included in the record if you would like to diverge

from that.

Mr. MILANOVICH. I would like to have the opportunity to read it,

but first I want to say, over the last several months, sir, I have

been made aware of the e-mails. When I read them, I was upset.

Today, after such a glorious week when we opened the National

Museum of the American Indian, knowing full well that the committee members sitting up here today made such a great effort to
20

make certain that it was done, and as Senator Inouye states, it is

a sad day today that we begin the week, this mid-week, to read

what a travesty has been done to tribes.

Thank you, sir.

Good morning, Chairman Campbell, Chairman McCain, Vice

Chairman Inouye and members of the committee. I am Richard

Milanovich, chairman of the Agua Caliente Band of Cahuilla Indians. I appreciate the opportunity to testify before you today. I

would like to commend the members of this committee and your

staff for bringing to light the malicious actions of two unscrupulous

individuals and those who acted to enable their enterprise.

While I had opposed the efforts of Mr. Abramoff and Mr. Scanlon

to obtain contracts with our tribe, distrusting their claims, methods

and quite frankly most of their costs, it was not until I saw the secret e-mails and other information obtained by the efforts of this

Committee that I began to truly comprehend the full nature of

their conniving actions.

This morning, I would like to address four areas. First, I would

like to provide you with a little background on our tribe. Second,

I will share with you my thoughts at the time Mr. Abramoff and

Mr. Scanlon contrived to obtain contracts with our tribe. Third, I

will highlight what we have learned over the past 7 months concerning their actions. Finally, I will describe some of the things our

tribe is doing in light of what we have learned.

First, I have served on the tribal council since 1977. My service

began as a member from 1977 to 1981, as Secretary from 1981 to

1984, when I was elected as chairman, a position I have been honored to hold for the past 20 years. From time immemorial, our people resided in the Palm Springs area. Our people developed complex communities in the Palm, Murray, Andreas, Tahquitz, Chino

Canyons and on the desert floor. With abundant water supply,

plant and animal life, the Agua Caliente Band of Cahuilla Indians

thrived. In 1876, the U.S. Federal Government deeded in trust to

the Agua Caliente Band of Cahuilla Indians 32,000 acres of our ancestral land as the Agua Caliente Indian Reservation.

We are industrious and creative, with a reputation for independence, integrity and justice. We are proud of our rich history and our

culture. The Agua Caliente Band of Cahuilla Indians’ constitution

and bylaws was adopted in 1955. The Agua Caliente Band of

Cahuilla Indians has a government-to-government relationship

with the U.S. Government as a federally recognized tribe and sovereign tribal entity. We have governmental authority over our reservation lands and people.

The tribe’s constitution and bylaws outlines a two-tiered democratic tribal government structure, the tribal membership and the

tribal council. The tribal council consists of five council members,

chairman, vice chairman, secretary and two members. The chairman, vice chairman and secretary serve 2 years and members serve

1-year terms. Under our constitution, action is taken by a majority

vote of the tribal council.

I would to preface my remarks on the topic of the tribe’s business

relationship with Jack Abramoff and Mike Scanlon with a general

statement that we are still learning, together with the committee,

of the efforts of these individuals to recruit individual tribal mem-
21

bers to collaborate in their deceitful undertakings. Concurrent with

the committee’s investigations, we of course have begun our own

internal investigations, but at the time the tribe entered into business arrangements with these individuals and their firms, we had

no idea of the steps they had already taken in order to manipulate

our democratic decisionmaking process.

While I am proud that these selfish efforts were only partially

successful, clearly these ill-motivated actions were a critical element of what appears to be a scheme to obtain large and unjustified payments from the tribe. As a result of the majority vote of the

council, and in my capacity as chairman, I signed service contracts

with Greenberg Traurig and Scanlon Gould Public Affairs in July

2002. Jack Abramoff and Greenberg Traurig were hired to assist

the tribe with all political and lobbying activities relating to a wide

range of public policy issues. Mike Scanlon and Scanlon Gould were

hired to help the tribe with respect to pending gaming compact

issues in California.

The first time that I met Jack Abramoff and Michael Scanlon

was in the course of their presentations seeking contracts to represent the tribe. Mr. Abramoff identified himself as a representative of one of the top law and lobbying firms in the United States.

The fact that these men and their services were associated with

such a prestigious firm was something upon which some of our

counsel relied. In large measure, Mr. Abramoff’s and Mr. Scanlon’s

presentations rest on their self-described success on behalf of other

tribes.

Personally, I was skeptical with regard to their presentation and

was more than skeptical of the fees that Mr. Abramoff and Mr.

Scanlon were seeking for their firms. I voiced my objections and

sought to defeat the effort to obtain contracts. But Mr. Chairman,

as I am sure you will understand and others on the Committee will

understand, sometimes being Chairman is not enough if others

have managed to collect the votes.

When the contracts and matters relating to the contract came to

a vote, the vice chairman and I found ourselves outvoted. Of

course, at that point in time, I had no idea that Mr. Abramoff and

Mr. Scanlon had already deceptively engaged in a full-scale effort

that they themselves valued at tens of thousands of dollars to defeat certain tribal council members, myself included, in order to

elect a slate more friendly to their sales pitch.

I was surprised and disappointed at some others on our council

who took a different view. But at this point, I was unaware of the

length that Mr. Abramoff and Mr. Scanlon had gone into enlisting

their support of certain individuals in our tribe. Of course, other

members of our council had also been deceived. At the time, I did,

however, take some solace in paying such a large retainer for Mr.

Abramoff’s services in that Greenberg Traurig is a law firm with

a responsibility to honorably treat its clients.

As Chairman, I thought it was my duty to try and make the best

of the situation. Looking back from where we sit today with the

knowledge of press reports and preliminary findings of this committee, it appears that some people at Greenberg Traurig were deceived, just as we were, regarding much of Mr. Abramoff’s

activities.
22

It is my sense that we have only seen the tip of the iceberg, but

already it appears that Mr. Abramoff and Mr. Scanlon, working in

conjunction with those who willingly enlisted to collaborate with

them, engaged in numerous instances of improper conduct.

Their own words demonstrate that they improperly sought to

manipulate for private gain the electoral processes of our tribe.

This occurred both before and after they were hired. It also appears

they did not view the tribe or even the tribal council as their clients. Instead, they worked on behalf of themselves and a small faction of tribal members they were seeking to elevate to a position

of total control by manipulating tribal elections. In the course of

their work for the tribe, Mr. Abramoff and Mr. Scanlon attempted

to hide information from the full council, while working covertly

with this collaborating faction.

Their own secret communications indicate a willingness to sacrifice the interests of the tribe in exchange for the opportunity to

make more money for themselves, of course. It appears that this

approach seeking an outcome that would actually hurt their clients

so that they could make more money was not unique in our case.

While there are a number of specifics that your investigation is revealing, perhaps the saddest is the utterly callous fashion in which

the mocked the interests of their clients they were actually hired

to represent, and displayed a willingness to engage in virtually any

conduct as long as they could make money.

In April of this year, the tribal council unanimously voted to suspend its relationship with both Greenberg Traurig and Scanlon

Gould. Based on information we already learned, we have taken

further action concerning the attempts to manipulate our tribal

elections. We have suspended certain individuals from appointed

roles in our government. We have retained the services of Darryl

Wold, a former chairman of the Federal Elections Commission, to

conduct an internal tribal inquiry into whether there were any violations of tribal law.

As chairman, I am working with our tribal council to reform our

laws regarding contracting, election and other procedural safeguards. Additionally, we have asked our legal counsel to aggressively pursue all avenues of obtaining reimbursement and compensation for injuries caused to our tribe. We will, of course, continue to work with the committee and other authorities.

Mr. Chairman, I would like to close by reiterating my gratitude

to you, Chairman McCain, Vice Chairman Inouye and the committee on your investigation. I will be happy at the appropriate time

to answer any questions that you may have.

Thank you.

[Prepared statement of Mr. Milanovich appears in appendix.]

The CHAIRMAN. Thank you.

Mr. Sprague.

STATEMENT OF BERNIE SPRAGUE, SUB-CHIEF, SAGINAW

CHIPPEWA INDIAN TRIBE OF MICHIGAN

Mr. SPRAGUE. Thank you, Mr. Chairman, and good morning to

the chairman and other members of the committee. I certainly

would like to thank you folks for inviting me out here today and

conducting this investigation.
23

This all started back in 2001 for me. I have been battling with

these guys ever since, and I am glad to see today that it is going

to come to a head. Hopefully, after today we can get down to the

bottom of what really happened in the last 2 or 3 years, not only

with my tribe, but with other tribes across the country. I would

like to read my statement for you this morning.

Good morning, Mr. Chairman and members of the committee. My

name is Bernie Sprague. I am the Sub-Chief of the Saginaw Chippewa Tribe. We have approximately 3,000 members located

throughout Michigan and the United States.

I have served my tribe for over 19 years and I have served as

an elected official for almost 7 years. These last 2 years have been

a difficult and trying period for the tribe and myself. On behalf of

the Saginaw Chippewa Indian Tribe, I want to thank the committee for allowing me to testify and for conducting this important investigation.

Our tribe has a long and painful history since we first came in

contact with settlers hundreds of years ago. Our treaties with the

U.S. Government ceded millions of acres of our ancestral land to

the Federal Government. Like many tribal nations across this

country, our people have endured generations of broken treaties

and empty promises. We have struggled for centuries against nonIndians who have used every tactic to steal our land and our precious resources that allowed our tribe to survive.

Unfortunately, Mr. Chairman, we fight a similar battle today.

They may wear fancy suits and expensive shoes, but their greed,

scare tactics, and unscrupulous behavior is the same our people

have faced for generations. And their goal to take from Indian people what is not rightfully theirs is once again being painfully repeated.

There is not a word in my native language that is strong enough

to describe what these people have done to my tribe. These unsavory characters who lie, deceive, and steal from Indian tribes need

to be exposed for who and what they are.

In the fall of 2001, a small group of Washington, DC lobbyists

quietly worked to elect 8 tribal members to the 12-member council.

As this committee knows, it is unheard of to have non-Indians involved in tribal elections. We do not know where they got the

money to run this campaign, but we do know these lobbyists

smeared the reputations of other candidates running for tribal

council through a series of slick brochures sent to tribal members.

This type of campaign has never happened before on our reservation. We now know these lobbyists have engaged in the same practices with other tribes across Indian country.

We were also shocked to learn that members of the former council and the former legislative affairs director who is here today,

who is not a tribal member, were deeply involved in this scheme.

We also now know that these lobbyists struck a deal with the candidates they supported. The deal was this: If you get elected to a

tribal council, the lobbyists would receive multi-million dollar contracts with the tribe.

Two days after the new council took office in December 2001, a

divided tribal council approved the contracts to hire these firms

against the strident recommendation of our legal counsel. In doing
24

so, they fulfilled their part of the deal. The Washington, DC lobbyists were hired and the looting of the tribal treasury soon followed.

In 2002, I was elected to tribal council in a special election. I

began to ask questions about the outrageous fees our tribe was

paying these lobbyists. I learned that there were no reports or documentation for any work they had supposedly performed.

One of the most outrageous examples of unaccounted-for services

involved the purchase of a voter database from Mr. Scanlon. Our

tribe paid nearly $4.5 million for a database of voters in Michigan.

That is right: $4.5 million for a database that we never saw. The

current tribal council researched this issue and found that you

could purchase a database of every voter in Michigan for less than

$75,000. To this day, we do not know where this money went and

this type of spending was repeated over and over and over again,

costing our tribe over $14 million.

There were other tribal council members who raised similar objections to this outrageous spending. Because we asked these questions and we told the tribal membership what was happening, the

council majority removed all of us from the tribal council. We continued to object to their looting of the tribal treasury. In the election of 2003, all but two of the former tribal council members lost

their seats.

Once a new council was elected in November 2003, we called in

Mr. Abramoff to discuss his contract. During this meeting, Mr.

Abramoff was asked if he had a financial or business relationship

with Mr. Scanlon. He looked us in the eye and told our counsel he

had no relationship with Mr. Scanlon at all. But now we know that

this was not true.

Mr. Chairman, I fully share your view that scheming to defraud

tribes must stop here and now, and that those responsible should

be prosecuted to the fullest extent of the law. You will be pleased

to know that the current tribal council has taken steps to ensure

this never happens again to our tribe.

We are committed to taking steps within our tribal government

to bring openness to our contracting process. We have drafted a

tribal ordinance that creates a hiring process that all public relations firms must follow. It ensures no secret deals or contracts for

anyone. It mandates all contracts must be approved at open tribal

council sessions.

Mr. Chairman and members of this committee, I am not here

just to tell you what has happened to our tribe. We have worked

to put together the pieces of this bizarre puzzle, but because we

have limited access to various records, we have not had a full accounting of where our money went. To this day, we do not have a

full account of what these lobbyists were doing. I encourage you to

continue this investigation as far as it needs to go.

Mr. Chairman, I want you to know that our tribe is prepared to

do whatever it takes to get back the money that was wrongfully

taken from us. We want to work with the committee to get to the

bottom of what these people did, and return to our people money

that can be used for educating our children and health care for our

elderly. From the beginning of this investigation, our tribe has fully

cooperated with the committee and you can be assured that we will

continue to do so.
25

Again, I want to thank the committee for holding these hearings.

I especially want to thank Senator McCain who has done so much

to improve the quality of life for Indian people and has been a leader in pressing for these hearings.

I am available for any questions you may have.

Thank you.

[Prepared statement of Mr. Sprague appears in appendix.]

The CHAIRMAN. Thank you, Mr. Sprague.

Chairman Milanovich, let me ask a few questions, and we will

do this in rounds, too. I will try to keep mine down to 5 or 6 minutes.

It is good to see you here today. Thank you also for being at the

opening of the National Museum of the American Indian.

Mr. MILANOVICH. Thank you, sir.

The CHAIRMAN. It seems to me you have been pretty much victimized beyond comprehension. Who brought Mr. Abramoff and Mr.

Scanlon to the attention of the tribal council in the first place?

Mr. MILANOVICH. May I make a statement first, sir? I do not

think it is necessary that the tribe or the tribes have been victimized. I do not like that term. We were not victimized. We were, I

am not sure what the proper term is, but we entered into a business arrangement not fully understanding, or those that approved

it, did not fully understand what was taking place. So we were not

victimized, sir.

As far as who first introduced us to Mr. Abramoff and Scanlon

Gould, that would have been our tribal secretary.

The CHAIRMAN. Did I understand you to say you are contemplating some legal action to try to recover some of the money that you

paid them?

Mr. MILANOVICH. There is a consideration on our part that there

should be some sort of remuneration from those individuals involved, yes, sir.

The CHAIRMAN. Did they disclose at any time their partnership

or deny it if they were asked?

Mr. MILANOVICH. They never disclosed.

The CHAIRMAN. They did not?

Mr. MILANOVICH. No, sir.

The CHAIRMAN. When you first hired Mr. Scanlon, did he make

any representations about how much work product he was going to

produce for the tribe?

Mr. MILANOVICH. He was quite, how do I put it properly, grandiose in his scheme as to how he was to put together a grassroots

effort concerning people in California, vendors in California and a

nationwide grassroots effort as well, to convince the Governor, yes.

The CHAIRMAN. The exhibits we showed, I think of exhibit 15

and 16 over there. You might put them up again, staff. Were you

aware of those at all before this hearing? They are appearing on

the screen. Were you aware of those at all before this hearing?

Mr. MILANOVICH. No, sir.

The CHAIRMAN. Were you ever aware that these two gentlemen

were working for particular tribal candidates?

Mr. MILANOVICH. No, sir; we did not learn this until within the

last several months and several weeks that we read copies of the

e-mail.
26

The CHAIRMAN. Sub-Chief Sprague, Mr. Petras is going to be up

next, but I understood you to say he is not a member of the tribe?

Mr. SPRAGUE. That is correct, Mr. Chairman.

The CHAIRMAN. How much discretion was he granted to make

deals for the tribe? Was it kind of carte blanche or did you oversee

each one of his decisions?

Mr. SPRAGUE. During the term under the former tribal chairman,

Chairman Kahgebab, Mr. Petras had a lot of authority. He had a

lot of lead-way. He was more privy to information than individual

council members were.

The CHAIRMAN. Was Mr. Petras the person that introduced the

so-called slate of eight to Mr. Abramoff and Mr. Scanlon?

Mr. SPRAGUE. Yes; I believe he was. Back in the fall of 2001

when our term was winding down, and their campaign had started,

myself along with other members in our community knew that

someone was running their campaign. It was not them. It was not

the individual council members.

The CHAIRMAN. Did Mr. Abramoff ever reveal his relationship to

Mr. Scanlon to you?

Mr. SPRAGUE. No; he did not.

The CHAIRMAN. I will come back to some more questions, but I

would yield to Vice Chairman Senator Inouye, if you have some

questions.

Senator INOUYE. Yes.

Chairman Milanovich, I presume there is a contract involved.

Mr. MILANOVICH. Yes, sir.

Senator INOUYE. Does the committee have a copy of that contract?

Mr. MILANOVICH. I believe they do. Yes, sir.

Senator INOUYE. In the negotiations, who was your counsel? Or

did you have a counsel?

Mr. MILANOVICH. We had a counsel, sir, but it hurts me to say

that there was such a movement on the council membership that

there was no full willingness to accept the review of our counsel on

the contract as it stood. It was more or less just ramrodded

through.

Senator INOUYE. Are you telling the committee that in negotiating a multi-million dollar contract, you did not have an attorney?

Mr. MILANOVICH. We had an attorney, yes, sir, but the advice

that was given was somewhat limited in that some members of the

council felt that it was sufficient to move forward with a draft of

the contract as proposed.

Senator INOUYE. Who proposed the draft of the contract?

Mr. MILANOVICH. It was presented by Mr. Abramoff initially, and

then it was approved, as was stated, by three members of the tribal

council.

Senator INOUYE. And the tribal council members, without conferring with your lawyers, said okay?

Mr. MILANOVICH. There was brief interchange between what the

contents of the document, the contract was, and tried more clarifying language what it really meant, but that was not sufficient to

keep the majority of the council not approving it.

Senator INOUYE. You just told us that in the last few months and

the last few days, you learned that some of the members of your
27

council had received assistance from these two men. Have you discussed this with these council members?

Mr. MILANOVICH. No, sir.

Senator INOUYE. Have they made any public statements?

Mr. MILANOVICH. No, sir.

Senator INOUYE. They have not apologized or anything like that?

Mr. MILANOVICH. I have not seen them.

Senator INOUYE. Are they still on the council?

Mr. MILANOVICH. No, sir; one was serving as a proxy member of

the council. The council took immediate action to suspend that person, and then she later resigned.

Senator INOUYE. So all of those who received assistance are no

longer on the council?

Mr. MILANOVICH. Not that we are aware of.

Senator INOUYE. In these negotiations, did the two men from

Washington suggest that they would provide you with monetary assistance?

Mr. MILANOVICH. At Christmastime of I believe it was 2003, they

sent me an expensive video camera, which I sent back. But other

than that, they knew how I felt about them. Their willingness to

maintain a secret cabal with certain tribal members was sufficient

for them to know that they were maintaining the relationship irrespective of what I was attempting to question or how I thought.

Senator INOUYE. Does your internal investigation indicate what

sort of payments the other council members received?

Mr. MILANOVICH. The investigation is ongoing as we speak sir,

so there has been no final determination.

Senator INOUYE. Chairman Sprague, did you have counsel, a lawyer, in your negotiations for this contract?

Mr. SPRAGUE. The first contract with Greenberg Traurig and

Jack Abramoff was reviewed by our legal counsel and he advised

the council not to sign the contract. The tribal council did not take

his advice and they approved the contract anyway.

Senator INOUYE. How did the council, your tribal council sign it?

Was it signed against the advice of legal counsel?

Mr. SPRAGUE. If the legal counsel gives you a recommendation

not do to something, the council has that right to accept that recommendation or discard it. In this case, they did not accept any of

the legal counsel’s recommendation about the contract.

Senator INOUYE. And this tribal council was the one that was

elected by these two men?

Mr. SPRAGUE. Yes; it was. Yes, they had the majority vote. Once

you have 8 out of 12, even if you do have the chairman elected, you

still have 7 votes. You still have the majority vote.

Senator INOUYE. Are these council members still members of

your council?

Mr. SPRAGUE. There is just one that is on the council with us

now. We have two other council members presently that have been

trying to defeat our efforts here.

Senator INOUYE. Have they had any discussions with you as to

what they did? About their relationship with the two men?

Mr. SPRAGUE. No; they have not.

Senator INOUYE. Have you conducted any investigation and have

you found any evidence of an unseemly relationship?
28

Mr. SPRAGUE. We have not. We started an investigation, but it

has not gotten serious. We have not gotten in depth with the investigation. Since we have been here and we have seen these e-mails

and we have seen exactly what has been going on, is what we had

suspected all along. Now, I think the council is going to be more

willing to take a more serious approach on these investigations, because there is obviously wrongdoing.

Senator INOUYE. So as far as you are concerned at this moment,

what you know is what you have seen in the papers and what you

have seen on the screen here?

Mr. SPRAGUE. Yes; we had suspected that they were helping

them in the 2001 election. We suspected they helped them in their

effort to recall myself and three other members of our executive

board, here just in 2003. The information that we have seen in the

past 2 days verifies those suspicions.

Senator INOUYE. Have the two men from Washington given you

gifts?

Mr. SPRAGUE. No; I could not even get a phone number of either

one of them for almost 1 year after I got on council in a special

election in 2002.

Senator INOUYE. Thank you.

The CHAIRMAN. Thank you.

Senator McCain, did you have questions?

Senator MCCAIN. Thank you, Mr. Chairman.

First of all, I want to thank both Sub-Chief Sprague and Chairman Milanovich for their courage. I know that they have been

under very intense pressures of varying kinds throughout this saga

and I want to thank you for standing up for the people that you

represent. I am very grateful for both of you.

A question for both of you. You both have said that there had

been efforts by these individuals to influence the outcome of tribal

elections. In that information, do you know whether money was

spent or not on behalf of these candidates?

Mr. MILANOVICH. Senator McCain, I am aware that according to

the e-mails and copies that we have received from the committee,

they spent upwards of $25,000 to $30,000 in 2002.

Mr. SPRAGUE. Senator McCain, the e-mails that I have seen concerning our tribe, Mr. Scanlon indicates that over a 4-month period, he spent over $100,000 on our tribe.

Senator MCCAIN. In order to influence the outcome of the election?

Mr. SPRAGUE. Yes.

Senator MCCAIN. The reason why I bring that up, Mr. Chairman,

I believe that it is illegal to interfere with tribal elections. My next

question is, according to tribal law, is that allowed?

Mr. MILANOVICH. Sir, we have ordinances prohibiting, well, conflict of interest and a code of ethics which more or less outline any,

so in that case, yes, it would not be allowed, sir. It would be

against tribal law, because it was not reported. Had they reported

it, perhaps there would have been a difference, but they did not

even report that they had used the services of Scanlon Gould.

Mr. SPRAGUE. Our laws are very relaxed. When it comes time for

elections, our people through the years have been elected because

of who they are in the community and the community knows who
29

they are and how they feel on issues. They know if they are an

honorable person or not. At this time, there is nothing specific in

our laws.

Senator MCCAIN. I think there are Federal laws, but I will check

on it. I am pretty sure there are.

Do you know of any moneys that were solicited by Mr. Scanlon

or Mr. Abramoff for other political purposes, such as for political

campaigns or also additional donations to other outside organizations, but particularly to other political campaigns?

Mr. MILANOVICH. Sir, in our process, the budget process, we have

a fiscal year beginning October 1. We ask our lobbyists to submit

a proposed list of contributions that would be made in the future

so they did make recommendations to particular legislators, Senators, Representatives, as well as PACs and other charitable organizations. Yes, sir.

Senator MCCAIN. And do you know roughly how much money

that was?

Mr. MILANOVICH. Somewhere, I do not really remember right

now.

Senator MCCAIN. Like hundreds of thousands?

Mr. MILANOVICH. Yes, sir.

Senator MCCAIN. Would you submit that list for the record for

us please?

Mr. MILANOVICH. I believe it has been submitted, sir.

Senator MCCAIN. It has been?

Mr. MILANOVICH. Yes.

Senator MCCAIN. And that is hundreds of thousands of dollars in

political contributions recommended by Mr. Scanlon and/or Mr.

Abramoff?

Mr. MILANOVICH. Correct.

Senator MCCAIN. How about you, Sub-Chief Sprague?

Mr. SPRAGUE. The Saginaw Chippewas were taken by Mr. Petras

and Mr. Scanlon and Mr. Abramoff over a 2-year period of approximately $1 million in contributions.

Senator MCCAIN. In campaign contributions?

Mr. SPRAGUE. Campaign contributions to people we never heard

of, people we knew nothing about, organizations, different things of

this nature. And we will get that list to the committee of all those

individuals that were donated to.

Senator MCCAIN. Were you aware of some moneys being used to

rent a skybox at FedEx Field here?

Mr. SPRAGUE. We had heard that, but we could not verify it, but

I think the e-mails have done that.

Senator MCCAIN. Had you heard that, Mr. Chairman?

Mr. MILANOVICH. We heard it and we actually participated,

again with the majority vote of the council to participate to the

tune of $300,000.

Senator MCCAIN. There are always certain ironies, Mr. Chairman. I guess that your tribes being done to purchase a skybox to

watch a Redskins game has a certain irony associated with it.

Mr. MILANOVICH. Pardon me, Senator. The skybox, there were

multiple boxes. It was not just that one venue. There were several

venues that they felt it was necessary I guess ask for the high-dollar value.
30

Senator MCCAIN. In order to make your tribe’s case to various

important people in Washington?

Mr. MILANOVICH. That was how it was presented to us, yes, sir.

Senator MCCAIN. And that was $300,000?

Mr. MILANOVICH. Correct.

Senator MCCAIN. Did you ever see a game?

Mr. MILANOVICH. No, sir.

Senator MCCAIN. Mr. Chairman, I have a lot of questions, but go

ahead.

Mr. MILANOVICH. Senator McCain, I want to say I did not want

to go see a game with them.

Senator MCCAIN. Thank you, sir. I can understand that.

Mr. MILANOVICH. Thank you.

Senator MCCAIN. Thank you, Mr. Chairman.

The CHAIRMAN. I do not blame you.

Senator Conrad.

Senator CONRAD. Thank you, Mr. Chairman.

Chairman Milanovich, how much money did your tribe pay over

to Mr. Scanlon and Mr. Abramoff?

Mr. MILANOVICH. The contract that we had with Greenberg

Traurig’s Jack Abramoff was $150,000 a month retainer plus expenses over a period of 18 or 19 months until the investigation

came to light through the Washington Post and we suspended our

relationship. With Scanlon Gould, it was a total as I recall of approximately $7.3 million in less than 1 year.

Senator CONRAD. So the total between those two would be over

$10 million?

Mr. MILANOVICH. I am certain of that, sir. Yes, sir.

Senator CONRAD. Chief Sprague, you testified previously that

your tribe paid over something in the neighborhood of $14 million?

Mr. SPRAGUE. Our tribe paid $10 million to Scanlon, a little over

$10 million, and just about $4 million to Jack Abramoff.

Senator CONRAD. So $14 million between the two, over $14 million.

Mr. SPRAGUE. Yes.

Senator CONRAD. Mr. Sprague, who did Mr. Abramoff say to you

that he and Mr. Scanlon had special influence with, if anyone, here

in Washington?

Mr. SPRAGUE. I never met Mr. Abramoff myself. His messages

were being delivered to our tribal council by our legislative director, Chris Petras. The few meetings that I was in that Mr. Petras

would come in a boast about Mr. Abramoff and his contacts, the

Senator’s name was, oh yes, Representative Thomas DeLay. He

was very powerful, and with Jack having access to this guy, he was

going to be able to do a lot of things for our tribe.

Senator CONRAD. So Mr. Abramoff was making representations

to the tribe that he had special influence with Representative Tom

DeLay. Is that correct?

Mr. SPRAGUE. That is correct.

Senator CONRAD. Did he assert that he had influence? Did he

give a reason why he had this influence with Representative

DeLay?

Mr. SPRAGUE. I do not recall that specific.
31

Senator CONRAD. Did he suggest that he had special influence

anywhere else in Washington?

Mr. SPRAGUE. The only word we got was that he was very powerful. He knows very powerful people. He does not mess with the little people. He goes straight to the top because he has contacts at

the top on both sides.

Senator CONRAD. Did he ever suggest that he had influence with

the White House?

Mr. SPRAGUE. Not that I recall. I imagine he did, because he was

always making these pitches to the council about how important he

was and how in danger we were.

Senator CONRAD. How endangered you were and how powerful

he was because of his contacts with Representative DeLay?

Mr. SPRAGUE. Representative DeLay and other powerful people

in Washington.

Senator CONRAD. Chairman Milanovich, in the representations

that were made to your tribe, did Mr. Abramoff and Mr. Scanlon

make representations to you as to who they had special influence

with here?

Mr. MILANOVICH. Yes, sir; when Mr. Abramoff introduced Mr.

Scanlon, his opening remarks were, or close to his opening remarks

were, Mr. Scanlon is was Congressman DeLay’s former aide. And

you know who Congressman DeLay is, inferring, I assume that he

was inferring that he had powerful friends.

Senator CONRAD. It is reported in the paper, yesterday’s Washington Post, that the Saginaw Chippewa gave money to the Capital

Athletic Foundation. Is that correct, Mr. Sprague?

Mr. SPRAGUE. That is correct.

Senator CONRAD. And do you know how much money was given?

Mr. SPRAGUE. I believe it was $25,000.

Senator CONRAD. $25,000. There is an assertion here that there

was some $2 million given by the Chippewa Indian Tribe, the Mississippi Band of Choctaw, and the Coushattas of Louisiana. So you

apparently were a small part of that.

Mr. SPRAGUE. Yes; and they were lucky to get that.

Senator CONRAD. They were lucky to get that. Can you tell me

why the decision was made to give to that particular charity?

Mr. SPRAGUE. Again, it was Mr. Petras comes in and says we

need to make this donation. So we asked what this foundation had

done, what it was for. His reply was that it benefits poor and needy

kids throughout the Washington, DC area and other members of

the Congress and the Senate, and people that support us support

this group, and it would be good for us to support the same foundation that others are supporting.

Senator CONRAD. And was it at the request of Mr. Abramoff that

this contribution was made?

Mr. SPRAGUE. Yes; through Mr. Petras. The vote came down four

to four. The chairman had to break the tie, and the chairman voted

to make the donation.

Senator CONRAD. It says in the paper of yesterday that Saginaw

Chippewa officials have told Federal investigators they made the

donations because Abramoff told them it would impress Congressman DeLay. Is that correct?

Mr. SPRAGUE. Yes, sir; that is correct.
32

Senator CONRAD. So Abramoff represented to you that if you

made these contributions to this foundation that he controlled, that

that would impress Congressman DeLay.

Mr. SPRAGUE. He did not tell us who controlled it. We did not

know who controlled it.

Senator CONRAD. He did not say that he controlled this foundation.

Mr. SPRAGUE. Right.

Senator CONRAD. But that the contributions to this foundation

would impress Congressman DeLay.

Mr. SPRAGUE. Yes, and others.

Senator CONRAD. Were you aware that in August, this foundation flew a chartered jet with six people, including Abramoff, House

Administration Chairman Robert Ney of Ohio, lobbyist and former

Christian Coalition leader Ralph Reed, and then-General Services

Administration Chief of Staff David Safavian to St. Andrews, Scotland for a golf outing? Were you aware of that?

Mr. SPRAGUE. No; I was not.

Senator CONRAD. Over $100,000 spent on that trip does not

sound like anything that would benefit the children of Washington,

DC, does it.

Mr. SPRAGUE. I could see through the smokescreen when they

presented it. It was not.

Senator CONRAD. And you voted against it?

Mr. SPRAGUE. Yes; I did.

Senator CONRAD. Well, there is much more to ask, but I think

my time has run out. I thank the Chair.

The CHAIRMAN. Thank you.

I have no further questions of this panel. Senator Inouye, did

you?

Senator INOUYE. Yes; I do.

Senator DORGAN. Mr. Chairman.

The CHAIRMAN. Excuse me. Senator Dorgan, I apologize. I did

not see you down there. Go ahead.

Senator DORGAN. Mr. Chairman, just briefly, I think my colleagues have asked the requisite questions. I think our next witness will probably give us some additional information about some

of this.

If I might just ask, on document number 25 is I believe the contract with the Saginaw Chippewa Indian Tribal Council, or at least

the public relations plan, document 25. Under ‘‘goal,’’ it says the

goal is to make this tribal council the most powerful and effective

administration in the history of the Saginaw Chippewa Indians of

Michigan and secure their re-election.

What is your impression of what they meant by that, ‘‘secure

their re-election.’’ Whose re-election?

Mr. SPRAGUE. That statement, that section of that contract, plus

the excessive fees, is what encouraged me to start my investigation

back in early 2002. The tribal council knows that they have no

right, and it is a violation of our laws, to use tribal funds for their

campaigns or for their reelections. They know that and they were

told that, and I pointed that out to them. I was brushed off,

brushed aside.
33

Senator DORGAN. Let me ask Chairman Milanovich, has your

tribe yet determined whether the conduct of Virginia Siva and

Candace Patencio violated any tribal election ordinance?

Mr. MILANOVICH. Our investigation is ongoing, sir, so it has not

made a determination.

Senator DORGAN. Is it your impression that they acted in the

best interests of the tribe?

Mr. MILANOVICH. On a personal sense, it is that they acted for

their personal gain, sir.

Senator DORGAN. Document number 44 seems to appear that,

Chairman Milanovich, they were using your tribe’s money for activities to promote another tribe. Are you aware of that?

Mr. MILANOVICH. No, sir.

Senator DORGAN. Let me just follow-up a question my colleague

started regarding the Capital Athletic Foundation. The reason that

this is important is that it is classified asa charity. Apparently, the

Capital Athletic Foundation was described as a charity to you, perhaps to both of you, but it was not disclosed that Mr. Abramoff was

the person in control of that charity.

Exhibit 35 is a letter that I think is probably intended, November 1, 2002, that was sent to your tribe, or perhaps an internal letter, and it is not signed. Do you have exhibit 35 up there? You do,

I think. Exhibit 35 describes the request for three $25,000 donations. Mr. Sprague, do you know who signed this letter to the tribe?

Mr. SPRAGUE. I do not recall who signed it, but I recognize it.

These are donations that Mr. Petras came in with and requested

motions on.

Senator DORGAN. Would this likely have been a letter from Mr.

Petras to the tribal council?

Mr. SPRAGUE. It usually was, but the majority of the time they

would come straight from Mr. Abramoff and cc’d to Mr. Petras, and

then he would bring them to the council for action.

Senator DORGAN. Is it possible this was written by Mr.

Abramoff?

Mr. SPRAGUE. Yes; it is.

Senator DORGAN. Okay. We will ask Mr. Petras about that.

This particular memo requested three donations. Were all three

of those donations made? Do you recall?

Mr. SPRAGUE. The American Tax Reform donation was made.

Senator DORGAN. And what is the basis for your tribe making a

donation to Americans for Tax Reform?

Mr. SPRAGUE. I have no idea, Senator. I did not understand it

then. I opposed it and I do not understand it today.

Senator DORGAN. How was it represented to your tribe? $25,000

is a significant amount of money. How was it described to your

tribe? Why would a tribe be making a donation to Americans for

Tax Reform?

Mr. SPRAGUE. It was because Mr. Abramoff suggested that we

make these donations to these various groups and organizations.

Senator DORGAN. Because it would be helpful to you?

Mr. SPRAGUE. Because they help us.

Senator DORGAN. They would help you?

Mr. SPRAGUE. Yes.
34

Senator DORGAN. Did he describe how a donation like this would

help you?

Mr. SPRAGUE. No; he never described how.

Senator DORGAN. And so the tribal council decides to do this

without having any notion of how this could be helpful to the tribe?

Mr. SPRAGUE. That is correct.

Senator DORGAN. Just based on Mr. Abramoff’s representation?

Mr. SPRAGUE. That is correct. Well, based on the slate of eight

which has the majority. What Mr. Abramoff wants, he gets. What

Mr. Abramoff did not want me and other council members to have,

we did not have. That is way it worked. I think Mr. Abramoff and

Mr. Scanlon were more involved in running our tribal council for

2 years than we realized. Hopefully, this investigation will uncover

that.

Senator DORGAN. My guess is that it is probably not very easy

for you to come forward, for either of you to come forward at this

point. Based on what I know, and I have certainly had several opportunities to review the information that we have developed so far

in this investigation, it appears to me that there are a couple of

people here who set out to bilk tribes out of tens of millions of dollars.

While that is, in my judgment, likely criminal behavior in some

respects, certainly moral bankruptcy in others, it is also I assume

profoundly embarrassing to be part of a tribal council that found

itself bilked out of this money. When I asked the question, for example, why would you pay $25,000 to Americans for Tax Reform,

what would you get in return for that, what would be the motivation for making the donation, your response is that the tribal council voted to require us to do it, but apparently did not have any notion of why they were donating, except someone from Washington,

Mr. Abramoff, said we should.

Mr. SPRAGUE. That is correct.

Senator DORGAN. Do the other members of the tribal council understand how preposterous that sounds now? I assume they do.

Mr. SPRAGUE. They have not since 2002. I have been trying to

talk to members of the slate of eight, when I found out what the

agreement had said, the money that was being spent. But they had

their leader, they had their roles to play, they had their orders, and

they followed them.

Senator DORGAN. I am going to ask the next witness about this

memo. Let me just say also, you know, we have a full-scale crisis

in housing, health care, education on reservations across this country. It is unbelievable to me to see the way money was spent and

the way money was bilked out of tribes by these charlatans.

So let me, if I have some additional questions, submit them in

writing. Let me just say this, though. We have had some better and

some worse cooperation, I think, from various tribes and interests.

I think all of this panel appreciates very much your willingness to

step forward, talk about it from your perspective, and respond to

the requests of this committee, to help us understand what is going

on here. We appreciate your attendance here today and appreciate

your testimony.

Mr. SPRAGUE. Mr. Chairman, may I?

The CHAIRMAN. Yes.
35

Mr. SPRAGUE. I would just like to say that the members of the

Saginaw Chippewa Tribe, myself included, because of these two individuals, our tribe has lost a lot of money, lost a lot of respect here

in Washington and back home in our own State. Individuals were

humiliated by these individuals, fired from their jobs, removed

from our own tribal government, because we tried to get the truth

out to our members. These individuals came in, and they destroyed

reputations and took honor from many of our people. They need to

learn that they do not have that right.

There are laws that protect Native American people and people

from all races in this country from these type of individuals. I

think a good word to describe them would be they are like vultures,

just circling and circling. Like the one paper said, they wanted the

top 100 tribes. They were lining up their next targets, as vultures

flying, and I am glad that we are conducting this investigation.

I would like to read a short statement before we go. I am glad

to see that the committee has convinced Mr. Petras to attend this

hearing. As his statement suggests, he still supports the actions of

Mr. Abramoff and Mr. Scanlon. My council is here with me today.

I, as well as them, look forward to hearing how Mr. Petras can explain his way out of this negligence and disgraceful conduct.

Thank you.

The CHAIRMAN. It will be included in the record.

Senator Inouye, did you have further questions?

Senator INOUYE. Yes, I do.

I think for the record, because of their courage and good wisdom,

can we secure the names of the two in-house lawyers who recommended that your tribes not enter into a contract with these two

fellows?

Mr. SPRAGUE. Yes; we can provide those to you.

The CHAIRMAN. We would like to have them in the record now,

if you know their names.

Mr. SPRAGUE. Okay. For the Saginaw Chippewas, it was Michael

Phelan.

Mr. MILANOVICH. For ourselves, Art Bunce is the tribal attorney

who had some strong recommendations.

Senator INOUYE. Chairman Milanovich, you indicated that you

were provided with a list of candidates to support.

Mr. MILANOVICH. Yes, sir.

Senator INOUYE. And you supported these candidates with

money?

Mr. MILANOVICH. Some of the candidates were, it was agreed to

support, make contributions to the recommendations list, yes, sir.

Senator INOUYE. Were these contributions made in cash or by

check?

Mr. MILANOVICH. By check, sir.

Senator INOUYE. And how were the checks made out, to the individuals or to the campaign committees?

Mr. MILANOVICH. I do not recall. I do not really remember how

the checks were made out, undoubtedly to the committee, though,

or to the PAC, whatever it may have been.

Senator INOUYE. Were the candidates Federal candidates?

Mr. MILANOVICH. There were some Federal candidates, yes, sir.

Senator INOUYE. Were they from the State of California?
36

Mr. MILANOVICH. I do not remember. The list was long, and I

questioned and the vice chairman also questioned certain names on

the list because we did not know who they were. As SubChief

Sprague states, there were PACs, there were charitable organizations, and we did not know who they were. We questioned, but

again there was a forward movement of some tribal council members who said just approve it.

Senator INOUYE. Were you told that by supporting these candidates that your tribe would benefit?

Mr. MILANOVICH. In so many ways, yes, sir. Sometimes they did

say that we need to make these contributions in order to convince.

Other times, it was a just a good organization and it will make

somebody else happy.

Senator INOUYE. Were you receiving any benefits from these candidates?

Mr. MILANOVICH. Not that I am aware of.

Senator INOUYE. Have you received any since then?

Mr. MILANOVICH. Not that I am aware of.

Senator INOUYE. Were any of the contributions made to political

party organizations, like the presidential committees?

Mr. MILANOVICH. I do not recall a presidential committee, but

perhaps the two party committees.

Senator INOUYE. Democrat and Republican?

Mr. MILANOVICH. Yes, sir.

Senator INOUYE. To the campaign committees? Were they congressional or senate campaign committees?

Mr. MILANOVICH. Both, sir.

Senator INOUYE. Both?

Mr. MILANOVICH. Both.

Senator INOUYE. And they were made out by check?

Mr. MILANOVICH. Yes, sir.

Senator INOUYE. And you have the list and you can provide it to

the committee?

Mr. MILANOVICH. It has been submitted, yes, sir.

Senator INOUYE. You have a copy of it now?

Mr. ROSS. If the chairman would allow?

The CHAIRMAN. Yes; go ahead and proceed. Identify yourself for

the record.

Mr. ROSS. Steven Ross of Aiken Gump, Counsel for Agua

Caliente.

The committee has already received from documents previously

produced, documents that included the recommendations that Mr.

Abramoff’s firm had made to the tribe. The production was not

made by us, but by counsel for Greenberg Traurig.

Senator INOUYE. Did you make out the checks? Or did Mr.

Abramoff make out the checks?

Mr. ROSS. I think copies of the checks, which were made out by

the tribal administration, have been produced to the committee already.

Senator INOUYE. Can I ask counsel this question, Mr. Chairman?

The CHAIRMAN. Yes; please do.

Senator INOUYE. When these contributions were made, were you

told what sort of benefits you may anticipate?
37

The CHAIRMAN. My relationship with the tribe post-dates those

events. I am recently retained as counsel.

Senator INOUYE. Can the chairman advise us?

Mr. MILANOVICH. Would you restate the question please?

Senator INOUYE. When you made these contributions, were you

advised as to what the nature of benefits you might be able to receive from the recipients of your contributions?

Mr. MILANOVICH. Not directly, no, sir. It as mailed to us. If we

had questions, we questioned Mr. Abramoff or one of his staffers

with Greenberg Traurig. Why are we doing this? Why this contribution being made to this person or this candidate or this organization? Many times, it was just because it is for the best interests

of the tribe.

Senator INOUYE. Do you recall if any of the recipients are on this

committee?

Mr. MILANOVICH. No, sir.

Senator INOUYE. Thank you.

The CHAIRMAN. Senator McCain.

Senator MCCAIN. Very briefly, Mr. Chairman.

Mr. Sprague, when Mr. Abramoff or Mr. Scanlon of whoever it

is that made their presentations to you, I would like to make it

very clear, it is my understanding of your response is that they

would give you enormous influence on both sides of the aisle with

both parties on both sides of the Capitol. Is that correct?

Mr. SPRAGUE. That is correct.

Senator MCCAIN. Thank you. It was not just one certain individual or one party. This was going to give you great influence everywhere. Is that correct?

Mr. SPRAGUE. That is correct.

Senator MCCAIN. Did Mr. Abramoff ever disclose that the Capital

Athletic Foundation was his private foundation?

Mr. SPRAGUE. No; he did not.

Senator MCCAIN. Did he ever disclose that the vast majority of

money donated to the Capital Athletic Foundation would be used

to finance a private school that he established?

Mr. SPRAGUE. No; he did not.

Senator MCCAIN. Thank you, Mr. Chairman.

Mr. SPRAGUE. I have one thing I would like to add to the attorney list, a comment about Michael Phelan, when he suggested to

the council that they do not accept a first contract with Mr.

Abramoff, he was terminated about 3 weeks after that. Since then,

Sean Reed has been working for us, and he did review one of the

contracts with Capital Campaign Strategies, and he suggested

changes, and those changes were not made. After that, Mr. Reed

was never given the opportunity to review another contract.

The CHAIRMAN. We appreciate your appearance today. We may

have further questions that we will submit in writing, or in fact

may call you back, and Mr. Milanovich, for further testimony.

Yes, Mr. Chairman Milanovich.

Mr. MILANOVICH. Mr. Chairman, I would like to add that I also

have present in the room members of the tribal council and members of the tribe who are here to try to begin the healing process.

We have been hurt dramatically by individuals of the tribe who

worked for their personal gain and by outsiders who have taken
38

advantage of those individuals. Thank goodness, Senator McCain,

yourself, Senator Inouye, committee members are willing to stand

up and correct the wrongs that have been done against us, and to

stop any further actions like this from happening again.

We are but one tribe, Saginaw Chippewa are another, there are

four others involved, but we have to remember this happens across

the country. It happened to one of the largest law firms here in

Washington, DC, too. But the hurt is there. My heart is crying, but

by the same token they are turning to tears of joy, too, knowing

something is going to be done with those individuals.

Thank you very much.

The CHAIRMAN. Mr. Chairman, we are going to do everything we

can as a committee. As you probably know, there is an investigation going on at one of the federal agencies related to these hearings. In addition to that, certainly you have the right to pursue it

in the courts, too. I hope you do. If you have not already initiated

some action to get back some of that money, I hope you do that.

Mr. MILANOVICH. We will do what is necessary to make ourselves

whole, sir. Thank you.

The CHAIRMAN. We will be a partner to that action.

Thank you. I appreciate your appearing today.

Mr. SPRAGUE. Thank you again.

The CHAIRMAN. Now, we will proceed to our last panel which will

be Dr. Christopher Petras, who is the former legislative director for

the Saginaw Chippewa Indian Tribe of Michigan.

Mr. Petras, would you please rise and raise your right hand?

[Witness sworn.]

The CHAIRMAN. Please be seated and continue with your testimony. We will have some questions for you at the conclusion.

STATEMENT OF CHRISTOPHER PETRAS, FORMER LEGISLATIVE DIRECTOR, SAGINAW CHIPPEWA INDIAN TRIBE OF

MICHIGAN

Mr. PETRAS. Yes, Mr. Chairman; I ask that a written statement

that I prepared be submitted for the record.

The CHAIRMAN. It will be included in the record.

[Prepared statement of Mr. Petras appears in appendix.]

Mr. PETRAS. Thank you.

The CHAIRMAN. So do you want to adlib anything at all?

Mr. PETRAS. No, sir.

The CHAIRMAN. You just want to go for questions? All right.

Let me start then. It appears from information the committee

has obtained that you worked for the Saginaw Chippewa Tribe for

a number of years. How many years did you work for the tribe?

Mr. PETRAS. A little over 5 years.

The CHAIRMAN. Over 5 years. What jobs did you do for the tribe

in that 5 years? Was it always the same job?

Mr. PETRAS. Policy research analyst, interim director of legislative affairs, and then director of legislative affairs.

The CHAIRMAN. I understand from the former witness that you

are not a member of the tribe.

Mr. PETRAS. No, sir.

The CHAIRMAN. How did you happen to get a job with the tribe

in the first place?
39

Mr. PETRAS. I was at a concert at the Scaring Eagle Resort and

an individual who I knew that worked in human resources, this

was back in 1998, approached me and said that there was a position open, a new department called the Legislative Affairs Department at the tribe. She said that you would be a good candidate for

that.

I had been teaching political science and was familiar with Government processes to some extent. She said it would be good if you

put in an application. So I followed up on it. I turned in an application. A few weeks later I received a call from Kim Sawmick, who

was working in the department at the time, asking if I was interested in coming in to interview with then-Director William Cross.

I said sure. I came in and interviewed and accepted the job.

The CHAIRMAN. In dealing with your relationship to Mr.

Abramoff, we have exhibit three we can put up on the screen,

please. He states that you were going to come in after the primary

with a guy who will be the chief if they win, I mentioned this once

before, and we are going to help him win. If he wins, we will take

over in January and we will make millions.

Are you familiar with that statement?

Mr. PETRAS. No; I do not recall that statement at all.

The CHAIRMAN. When did you first meet Mr. Abramoff?

Mr. PETRAS. I met Mr. Abramoff basically in 2000. There was a

tribal council then that was headed by then-Chief Phillip Peters.

Ms. Sawmick had indicated to me that the council was interested

in looking for representation out here in Washington, DC to work

with Larry Rosenthal who was the lobbyist at the time for the

Saginaw Chippewa Tribe.

What I did is I went on the Internet and typed in cue words, basically ‘‘tribes’’ and ‘‘lobbyist’’ and several came up. There were

three companies that I contacted in Washington here. I came out

and did a preliminary discussion with the companies. I came back.

I asked Ms. Sammick if she would come out and review the companies with me, since she was a tribal member and was close, basically, with the tribal council at the time. She was the sister of

council member at the time David Otto. She agreed. We came out.

We interviewed with three companies. One was Preston Gates, in

which she met Mr. Abramoff.

The CHAIRMAN. So after that meeting, did you recommend the

tribe hire him?

Mr. PETRAS. She recommended that the tribe bring him in for an

interview.

The CHAIRMAN. Did you encourage or assist Mr. Abramoff in encouraging the tribes to donate to these so-called charities that he

promoted?

Mr. PETRAS. What my role was is the council, I would get a directive. So you understand how it worked in legislative affairs, we answered directly to the council so we had 12 different bosses to answer to. There were no efforts on my behalf to try to push either

way any type of political contribution. It would come in. The tribe

receives them regularly, and then they would be submitted to the

council to consider.

The CHAIRMAN. In this same e-mail, Mr. Abramoff said that you

were very excited about the prospect of hiring Mr. Scanlon. Whose
40

idea was it first to bring Mr. Scanlon in to run the tribal candidate

campaigns? Did Mr. Abramoff suggest that you bring Scanlon in?

Mr. PETRAS. Excuse me? Can you repeat that?

The CHAIRMAN. Whose idea was it to bring Mr. Scanlon in to run

the tribal candidate campaigns? Did Mr. Abramoff suggest that?

Mr. PETRAS. I do not recall any discussion related to bringing Mr.

Scanlon to run campaigns.

The CHAIRMAN. In his e-mails, Mr. Abramoff gives the impression that you knew fully how much he and Mr. Scanlon planned

on charging the tribe. Is that accurate or not?

Mr. PETRAS. No; the only discussion I ever had regarding that

with Mr. Abramoff was that, see, it began with Mr. Otto, after Mr.

Abramoff or Preston Gates had been hired back in 2000, they had

worked for the Saginaw Chippewa Tribe for about a month, and

Mr. Otto was very interested in Mr. Abramoff, and wanted to keep

in touch with him after they had been terminated, because Mr.

Abramoff had left for Greenberg Traurig. The tribal council at the

time decided not to hire the services of Greenberg Traurig and instead hired someone else.

I do not recall any discussion regarding bringing in Mr. Scanlon

to run any type of campaign.

The CHAIRMAN. After the tribal council members were taken out

of office, in your e-mails you asked Mr. Abramoff to provide $2,500

to help out former council members who were less than 50 signatures short of the recall, but were running out of money. Do we

have a poster of that e-mail? It is up there.

My question is, how much did Mr. Abramoff give in total for that

effort? That is an e-mail from you. I may be corrected by staff here.

That may be an e-mail from Abramoff to you, excuse me, but concerning the same thing.

Mr. PETRAS. That does not look like it is an e-mail from me. I

do not recall.

The CHAIRMAN. Do we have the right one up there? I cannot see

them from here. In any event, do you know how much Mr.

Abramoff gave in total to that recall effort?

Mr. PETRAS. I do not recall.

The CHAIRMAN. Did he do anything else to assist the recall effort

that you know?

Mr. PETRAS. I do not recall.

The CHAIRMAN. If you had it to do all over again, would you recommend him again to your employer?

Mr. PETRAS. I would let the council decide that.

The CHAIRMAN. But would you have recommended him again?

Mr. PETRAS. I do not know if the allegations are true on Mr.

Abramoff or not, so it would be difficult to say.

The CHAIRMAN. Okay.

Senator Inouye.

Senator INOUYE. Now, you were provided with a list of candidates to assist? Did the two men from Washington provide you

with a list of candidates that your tribe should assist?

Mr. PETRAS. When?

Senator INOUYE. Political candidates.

Mr. PETRAS. I do not recall any list of candidates being provided

to me.
41

Senator INOUYE. Were you called upon to provide counsel on who

your tribe should support in the political elections?

Mr. PETRAS. No; the elections were left up to the individual tribal

members.

Senator INOUYE. And you had no role to play in that?

Mr. PETRAS. No.

Senator INOUYE. Did you receive any gift or remuneration or

compensation from these two men from Washington?

Mr. PETRAS. All I recall receiving was a video camera-digital

camera, a leather travel document holder and some type of slide

projection desktop screen.

Senator INOUYE. Did you feel that it was proper or improper?

Mr. PETRAS. It was at Christmas. [Laughter.]

Senator INOUYE. Do you know whether the members of the council received Christmas gifts?

Mr. PETRAS. I do not know.

Senator INOUYE. Thank you, sir.

The CHAIRMAN. Senator McCain.

Senator MCCAIN. Dr. Petras, in late 2001, didn’t you and David

Otto meet with Michael Scanlon at a Bob Evans Restaurant and

discuss campaign strategy for the slate of eight?

Mr. PETRAS. The meeting, if it was at Bob Evans, I do not recollect where the meeting was, had to do with Mr. Otto was interested

in understanding what the Mississippi Choctaws do for their work.

Mr. Otto had been to Washington before and had attended a sporting event at the MCI Center. In the sports box, there was a magazine store, I cannot remember which magazine store, that praised

Chief Martin and the work he had done for the Mississippi Choctaws. Mr. Otto was interested in knowing how could they do that

for the Saginaw Chippewa.

The CHAIRMAN. You never discussed a strategy for the slate of

eight?

Mr. PETRAS. I do not recall discussing any strategy for a slate of

eight.

Senator MCCAIN. Do not recall or you did not?

Mr. PETRAS. I do not recall.

Senator MCCAIN. I see.

Now, obviously you are defending the tribe, what happened,

which is pretty bizarre. But let me read you a couple of e-mails of

what Mr. Abramoff and Mr. Scanlon thought about you. Do you remember e-mailing Todd Bollinger in 2003 about Kenny Loggins

concert tickets for State Representative Ehart? Do you remember

that? Let me refresh your recollection.

On February 18, 2003, you e-mailed Mr. Bollinger, and this was

your e-mail:

I just received a message from a state representative who is running for Congressman Nick Smith’s seat in 2004. His last name is Ehart. He wants tickets to the

Kenny Loggins concert.

When Mr. Bollinger passed on your request to Mr. Abramoff, Mr.

Abramoff replied, and I quote from Mr. Abramoff’s e-mail, ‘‘Neither

rain nor snow nor the heat of day will keep him from his appointed

idiocy.’’
42

In June 2002, while contemplating a trip out to the tribe, Ms.

Scanlon wrote Mr. Abramoff in an e-mail. Mr. Scanlon to Mr.

Abramoff in an e-mail:

I really think a trip out to those fools solo is not worth it regardless, because we

will not come back with cash or a firm commitment. But you throw in the pain in

the ass factor and the Petras bullshit factor, it is really a bad idea.

This is what these people thought of you, that you recommended

to the tribal council. Does that arouse any emotion in you, Dr.

Petras?

Mr. PETRAS. I do not know what the context is of it, sir.

Senator MCCAIN. This is the outfit that you recommended, Dr.

Petras. An e-mail, Mr. Abramoff, ‘‘How much is the Kay Gold

amount?’’ Mr. Scanlon responds: ‘‘800K.’’ To this, Mr. Abramoff

asked, ‘‘800K? I thought we got $1.9 million.’’ Mr. Scanlon replies,

‘‘We did. 800K for you, 800K for me, 250K for the effort, and 50K

went to the plane and miscellaneous expenses.’’

Do you think that is appropriate, Dr. Petras?

Mr. PETRAS. Again, I do not know what the context was of that

e-mail.

Senator MCCAIN. Remember, you are under oath here, Dr.

Petras.

Mr. PETRAS. I understand.

Senator MCCAIN. You never had anything to do with any of the

campaigns for tribal council. Is that correct or incorrect?

Mr. PETRAS. I do not recall at any time having anything to do

with the elections.

Senator MCCAIN. Wouldn’t you recall or not recall if you had

anything to do with a tribal election?

Mr. PETRAS. I do not recall, Senator.

Senator MCCAIN. I have no more questions, Mr. Chairman.

The CHAIRMAN. Senator Conrad.

Senator CONRAD. Dr. Petras, did you recommend Mr. Abramoff

to the tribal council as somebody they should hire?

Mr. PETRAS. That was Mr. Otto who did that. I was not present

at Mr. Abramoff’s presentation to the council.

Senator CONRAD. Did you recommend to Mr. Otto that he recommend Mr. Abramoff?

Mr. PETRAS. No; Mr. Otto was already pretty much determined

he wanted to have Jack Abramoff.

Senator CONRAD. Did you play any role in the hiring of Mr.

Abramoff?

Mr. PETRAS. No.

Senator CONRAD. You played no role. You played no role in the

hiring of Mr. Abramoff. That is your testimony here today?

Mr. PETRAS. My testimony regarding that question is that the

role in terms of what? I could not advise the council either way.

It was their vote. It was their decision. Mr. Otto had asked me to

keep in touch with Mr. Abramoff.

Senator CONRAD. Didn’t you come to Washington, Mr. Petras, for

the purpose of interviewing firms to hire?

Mr. PETRAS. That was Ms. Sawmick that recommended him.

Senator CONRAD. That is not my question to you, sir. Didn’t you

come on the trip to Washington to interview firms to hire to represent the tribe?
43

Mr. PETRAS. Yes.

Senator CONRAD. And didn’t you identify firms to hire through

your Internet search?

Mr. PETRAS. Yes.

Senator CONRAD. So how could you assert that you played no role

in the hiring or the recommendation of a hiring of a firm to hire?

Mr. PETRAS. I looked at my role was that I was bringing Ms.

Sawmick out as a tribal member to let her select who she was interested in having to bring back to the council to recommend, as

a tribal member.

Senator CONRAD. But sir, by your own testimony, you were involved in identifying the firms for her to select from. Is that not

correct?

Mr. PETRAS. Well, she could have gone with other firms. These

were just three firms that ended up being the three firms that we

were going to take a look at, for her to interview, to look at.

Senator CONRAD. And did you not recommend that those were

the three firms that she should look at?

Mr. PETRAS. I just said I just spoke with three firms, and would

you like to come out and talk to them.

Senator CONRAD. On what basis did you decide that those were

the three firms to talk to?

Mr. PETRAS. On the basis of their work with Native American

issues.

Senator CONRAD. Okay, so in fact you did play a role in helping

select the firms that were presented to her, for her recommendation back to the tribal council.

Mr. PETRAS. My role was not in terms of whether or not I said

you should hire somebody. She was the one who came out and

interviewed with them.

Senator CONRAD. Did she decide what firms she would interview?

Or did you make a recommendation to her what firms to interview?

Mr. PETRAS. I just said that I had spoken with three firms out

here.

Senator CONRAD. Those are the three firms that she interviewed

with.

Mr. PETRAS. That she came out to see, right. And then wanted

to know if there would be any others, and I said that would be up

to her to decide.

Senator CONRAD. Did Mr. Abramoff make claims to you about influence that he had here in Washington?

Mr. PETRAS. I do not think it was in terms of influence as it was

how many staff he had and their specializations where they came

from, so you could cover more offices on the Hill.

Senator CONRAD. Did he make assertions to you that he had special influence with certain members of Congress?

Mr. PETRAS. No; not special influence.

Senator CONRAD. Did he make suggestions to you that he had

special contacts, special relationships with certain members of Congress?

Mr. PETRAS. I only recall that it was in the context of his staff

had worked for members on the Hill.

Senator CONRAD. Do you recall who he said his staff had worked

for on the Hill?
44

Mr. PETRAS. Some.

Senator CONRAD. I am asking you specifically who the members

were. Certainly, you recall that.

Mr. PETRAS. Well, his staff consisted of individuals that worked

for Senators from Louisiana and House members; had worked for

some of the leadership. Just basically they had significant work experience out here in working with different legislators and with

committees.

Senator CONRAD. Chief Sprague indicated that there was an indication, a series of indications, that Mr. Abramoff and Mr. Scanlon

had special contacts with Representative Tom DeLay. Do you recall

that?

Mr. PETRAS. That they had mentioned that?

Senator CONRAD. Yes.

Mr. PETRAS. Only in the statement that was made that one of

his staff had worked for him previously.

Senator CONRAD. One of?

Mr. PETRAS. Mr. Abramoff’s staff.

Senator CONRAD. One of Mr. Abramoff’s staff had worked for

who?

Mr. PETRAS. For Mr. DeLay.

Senator CONRAD. For Congressman DeLay.

Mr. PETRAS. Right.

Senator CONRAD. And how about Mr. Scanlon? Were you under

the impression, did you have knowledge that Mr. Scanlon had

worked for Congressman DeLay?

Mr. PETRAS. Not until later.

Senator CONRAD. Not until later. And when the decision was

made to hire Mr. Abramoff and Mr. Scanlon, you say you did not

make the recommendation, but you narrowed down the number of

firms to interview and then a recommendation was made to the

council. Did you speak to the council at all?

Mr. PETRAS. Ms. Sammick and I did go into the council in 2000

and she had made the recommendation.

Senator CONRAD. Did you speak to the council at that time?

Mr. PETRAS. I do not recall what I would have said to the council.

Senator CONRAD. I am not asking you what you said. I am asking you, first, whether you spoke to the council when you went in

with the other representative. Did you speak to the council?

Mr. PETRAS. I do not recall.

Senator CONRAD. You do not recall whether you spoke or not?

Mr. PETRAS. No.

Senator CONRAD. Have you at any time made representations to

the tribe that Mr. Abramoff, Mr. Scanlon or you had a relationship

with the White House that would be useful to the tribe?

Mr. PETRAS. I do not recall doing that, and I definitely did not

have a relationship with the White House.

Senator CONRAD. Have you ever had your picture taken with key

staff at the White House?

Mr. PETRAS. With key staff such as?

Senator CONRAD. Well, have you ever had your picture taken

with key staff of the White House of the United States?

Mr. PETRAS. I do not know about key staff. We had our photo

taken with the President. [Laughter.]
45

The CHAIRMAN. I think that qualifies. [Laughter.]

Mr. PETRAS. Staff, I am assuming the staff that works, you

know, key staff under the President.

Senator CONRAD. Did you have your picture taken with Mr. Karl

Rove?

Mr. PETRAS. Yes.

Senator CONRAD. And did you make representations that this indicated you had special influence at the White House?

Mr. PETRAS. I do not recall that.

Senator CONRAD. You do not recall that.

Mr. PETRAS. No.

Senator CONRAD. Would it surprise you to know that people are

saying that in fact you did make such representations? That photos

with Mr. Rove indicated that you had special pull at the White

House?

Mr. PETRAS. I have no idea what others are saying. I have not

seen anything to that effect.

Senator CONRAD. If I can just conclude, Mr. Chairman.

How did the photo with the President come about?

Mr. PETRAS. That was through an organization that the tribe

contributed to through the RNC, the Republican Eagles.

Senator CONRAD. Republican Eagles. Do you recall how much the

contribution was?

Mr. PETRAS. It may have been $10,000.

Senator CONRAD. But it might have been more than $10,000?

Mr. PETRAS. My recollection is the tribe contributed twice, and

maybe the second time the donation amount went up.

Senator CONRAD. And how much would that have been?

Mr. PETRAS. I do not recall.

Senator CONRAD. I thank the Chair.

The CHAIRMAN. Senator Dorgan.

Senator DORGAN. Mr. Chairman, thank you.

Dr. Petras, how long have you had this problem with recall?

[Laughter.]

Senator DORGAN. Is this a new phenomenon related to this particular set of hearings or is this an ongoing serious issue?

Dr. Petras, I listened to your testimony. You say you do not know

what the truth is here and we are searching for the truth. We hope

that you could help us find the truth. When Senator McCain asked

you how it feels when the people that were your clients called you

an idiot, and you said it depends on the context. I do not understand that. You do not know the context. When somebody calls you

an idiot, why you need context to understand how you feel about

that?

Mr. PETRAS. Because I do.

Senator DORGAN. All right. Exhibit 35 was put up on the screen

a while ago. I would like to go back to exhibit 35. This was a request for contributions. It is unsigned, dated November 1, 2002.

Are you familiar with this document? Previous testimony suggested

at least it might have been a memorandum from you or it might

have been a memorandum from Mr. Abramoff passed through to

you to the tribe.

Mr. PETRAS. I am not sure.
46

Senator DORGAN. You cannot recall or you are just not sure? Or

is that the same thing?

Mr. PETRAS. I have not had a chance to read the document, so

I would not be able to——

Senator DORGAN. I would be happy to read part of it, if you wish.

I am not trying to be badgering here. Look, we need to understand

where all this leads, where it comes from, what the origin is. You

need to help us do that. You are not, frankly, being very helpful.

This is a memorandum that asks the tribe to make certain contributions. It asks the tribe to make a contribution to the Capital

Athletic Foundation, to Americans for Tax Reform, to the National

Republican Campaign Committee and so on. It seems to me that,

from previous testimony, it was either written by you or by Mr.

Abramoff.

The reason I am asking what the origin was is because I would

like to understand what was the representation to the tribe of what

their benefit would be from a contribution to the Capital Athletic

Foundation or to the Americans for Tax Reform, for that matter.

I am trying to understand what the origin was so I can ask who

made what representations about this.

Mr. PETRAS. With the Americans for Tax Reform, that focused on

the issue of taxation on tribal nations. That organization fought tax

issues and had worked doing the same thing for tribal nations. Mr.

Norquist had presented, I do not remember the year, but he had

presented to the National Indian Gaming Association Conference,

and did a presentation on taxation and tribes. He did not think

that that was good.

So my recollection is that struck a chord with Mr. Otto at the

time and some of the other council where they were presented with

a contribution request for the Americans for Tax Reform and they

voted and approved of it.

Senator DORGAN. Was that request from Mr. Norquist?

Mr. PETRAS. I am not sure.

Senator DORGAN. Was it a request from Mr. Abramoff?

Mr. PETRAS. I am not sure if it came from him either.

Senator DORGAN. Mr. Chairman, my hope was that we would get

more assistance from Dr. Petras. I indicated to the other panel, I

am sure there is some substantial embarrassment. There always is.

I think the tribes are victims here. The tribes have been victimized

by people that have bilked them out of a great amount of money

under false pretenses, it appears to me. The question of whether

it is criminal or not is left to officials in the criminal justice system.

The question of whether there are issues for us is something that

we are trying to explore.

We know there are issues here. The question is what and how.

My hope was that Dr. Petras would be able to clear up a few of

these issues. It appears that will not be the case. But I must say,

from the briefings that I have had on these issues, that what we

are talking about today merely scratches the surface on the range

of issues that surround this some $66 million in public relations

fees that tribes paid plus additional payments that we do not yet

have a complete handle on.

I think we are this morning simply scratching the surface on this

money, where it went, who requested it, who had benefitted, why,
47

how. We do know, I think now in many cases, especially this morning’s case, who the victims are. The one thing that disappoints me,

Dr. Petras, is that you do not see what we see from evidence that

is put on the screen.

What we have at the moment is a substantial trail of documents

and they are quite clear. The documents indicate a great disrespect

for the clients that these two people were serving. They document

that they did not disclose to you, for example, who controlled the

Capital Athletic Foundation. You were largely in the dark for all

of this. I am frankly surprised that you at this point reserve judgment.

The question is not about whether this was done to the tribes.

It clearly was. The questions are not who did it to the tribes. We

know who did it. The question is, how deep does this cesspool go

and what are the layers and what does it tell us?

So I am a little surprised that you come to us today suggesting

that, this might all be just fine. These contracts might be just all

right, and this might just be one large misunderstanding. It seems

to me that is what you are suggesting because you are reserving

judgment on everything, or not recalling anything.

Respond to that, if you would.

Mr. PETRAS. I have no comment on that.

Senator DORGAN. All right.

Mr. Chairman, thank you for the time.

The CHAIRMAN. This is the first hearing. We will be doing several

more. As you said, we are probably just scratching the surface. I

think that Mr. Petras may be back and hopefully his recall will be

better then, but at least he did not try to hide behind the fifth

amendment.

Senator DORGAN. No; but the fifth amendment is available to

people and coming and saying nothing and not recalling anything

is not much more helpful to us.

The CHAIRMAN. I am not sure what amendment covers that.

[Laughter.]

Senator Inouye, did you have a question?

Senator INOUYE. Yes; I have one question.

You were the legislative director of the Saginaw Tribe?

Mr. PETRAS. Yes.

Senator INOUYE. From what period to what period?

Mr. PETRAS. I was interim director for a few months, and then

was full director, and that was not even for a year. And then my

position was eliminated in January 2004.

Senator INOUYE. What were your responsibilities or duties as legislative director?

Mr. PETRAS. To basically work with the tribal council on policy

issues, conduct research.

Senator INOUYE. And in that capacity, did you participate in

council meetings?

Mr. PETRAS. Yes.

Senator INOUYE. Did you discuss with them, or did you have

someone speaking for you?

Mr. PETRAS. In terms of what?
48

Senator INOUYE. So far, you have testified that you did not have

any occasion to talk to the members of the council and that some

woman did all the talking.

Mr. PETRAS. That was with regard to Mr. Abramoff when he was

hired.

Senator INOUYE. In other matters did you talk to the members

of the council?

Mr. PETRAS. Yes.

Senator INOUYE. What were the subject matter of your dicussions

with tribal councils members?

Mr. PETRAS. Legislation, Federal, and State.

Senator INOUYE. And in those discussions, did you talk about

Washington representation? You were called upon to make recommendations on legislation, I presume. You were the legislative

director.

Mr. PETRAS. Well, it did not necessarily work like that. The council, it would depend on which council it is. Some councils would

hire their own lobbyist and not even tell us about it.

Senator INOUYE. I am talking about the Saginaw Council.

Mr. PETRAS. Right. That is who I am talking about. I served on

four councils, four completely different councils.

Senator INOUYE. You just testified that you were called upon to

make recommendations on legislation in Washington.

Mr. PETRAS. And? I am sorry, Senator. Can you re-phrase?

Senator INOUYE. In this discussion, did you tell them who they

should retain as counsel here in Washington? Or who they should

retain as a lobbyist?

Mr. PETRAS. Tell them who they should retain? No, I would just

bring in, tell whoever you would call, you have to send your materials to the council, and then they would schedule a meeting with

counsel and do their presentation.

Senator INOUYE. So you were just a conduit?

Mr. PETRAS. Basically.

Senator INOUYE. How much did they pay you, if I may ask, to

serve as conduit?

Mr. PETRAS. My salary was different. I had several. When I first started, it was $40,000. Then it went up. I do not recall, maybe in

the $50’s, then $75,000 as interim and then $100,000 as director.

Senator INOUYE. $100,000

But you made no recommendations as to who they should retain

as your agents here in Washington?

Mr. PETRAS. By the time I was director or interim director, the

lobbyists were already hired, the consultants for the tribe.

Senator INOUYE. And what was your relationship with these lobbyists?

Mr. PETRAS. To basically pass on what the policy objectives were

of the council.

Senator INOUYE. Well, apparently we are not going to get too far.

Do you have any questions?

Senator CONRAD. Yes; Mr. Petras, the lobbyists were already

hired when you were the legislative director. Is that correct?

Mr. PETRAS. Right.

Senator CONRAD. And did you do a review of the performance of

the people who were working for you here in Washington?
49

Mr. PETRAS. No; that was distributed to council in mid-year and

year-end reports from Greenberg Traurig.

Senator CONRAD. So you played no role in making ongoing recommendations to the council as to the performance of their lobbying firm in Washington?

Mr. PETRAS. My recollection was they understood, they were

coming out here and participating in the policy process themselves,

going to meetings, talking about the issues.

Senator CONRAD. Would you comment, would you make observations to the members of the council on how well or poorly the lobbying firm was performing?

Mr. PETRAS. No; I do not recall doing that.

Senator CONRAD. You never made an assessment to the members

of the council on the performance of the lobbying firms that had

been hired?

Mr. PETRAS. No; they would see, for example, if they were working on let’s say with a local government county to help fund a road

project, that would come into the council. They would see the legislation with the dollar amount in it, so they would know.

Senator CONRAD. You know, it sounds almost like an immaculate

conception here. You were in this position, but it is very unclear

to me listening to you what you did. It sounds like you did nothing

but take a batch of papers from this group and hand them to this

group. Was that your role?

Mr. PETRAS. I am not sure I would describe it like that.

Senator CONRAD. How would you describe it?

Mr. PETRAS. I was more taking the policy requests of the council,

different departments internally would go to the tribal council and

say, we could really use this type of program, like a residential

treatment center or a new school. And then that would be passed

on to Greenberg Traurig, and then they would say, well, you need

to have a proposal lined up, and then the different departments

would put their proposal together.

Senator CONRAD. Did you feel that you had some responsibility

for getting results on these various proposals?

Mr. PETRAS. Some.

Senator CONRAD. Let me ask you a final question, if I could.

Aside from the gifts that were given, that you have described previously, did Mr. Scanlon ever pay you money?

Mr. PETRAS. No.

Senator CONRAD. Did Mr. Abramoff ever pay you money?

Mr. PETRAS. No.

Senator CONRAD. Did any of their agents ever pay you money?

Mr. PETRAS. No.

Senator CONRAD. Did you ever have an understanding that you

would be hired in the future by either Mr. Abramoff or Mr. Scanlon?

Mr. PETRAS. No.

Senator CONRAD. Did you ever have an understanding that you

would receive compensation at any time in the future from Mr.

Scanlon or Mr. Abramoff?

Mr. PETRAS. No.

Senator CONRAD. So did you ever say to the council that you believed Mr. Abramoff was doing a good job?
50

Mr. PETRAS. I may have. The council, when he was hired with

Greenberg Traurig, was very involved. They came out here and

worked and came to meetings at their offices.

Senator CONRAD. You may have said to the council that you believed Mr. Abramoff was doing a good job?

Mr. PETRAS. Yes.

Senator CONRAD. Did you ever say to the council that you believed Mr. Scanlon was doing a good job?

Mr. PETRAS. I may have from time to time.

Senator CONRAD. You may have from time to time. How frequently would you have told the council that he was doing a good

job?

Mr. PETRAS. It would depend on what the project is. He was

hired for three separate projects, Capital Campaign Strategies

were.

Senator CONRAD. All right.

I thank the Acting Chairman.

Senator INOUYE. Thank you, Dr. Petras.

Mr. PETRAS. Thank you, Mr. Chairman.

Senator INOUYE. The committee will stand in recess until our

next hearing. For the next 2 weeks, the record will remain open.

So if any of you wish to supplement your testimony or submit additional documents, please feel free to do so.

[Whereupon, at 12:25 p.m., the committee was adjourned, to reconvene at the call of the chair.]
(51)

APPENDIX

ADDITIONAL MATERIAL SUBMITTED FOR THE RECORD

PREPARED STATEMENT OF RICHARD M. MILANOVICH, CHAIRMAN, AGUA CALIENTE

BAND OF CAHUILLA INDIANS

Good morning Chairman Campbell, Vice Chairman Inouye, Senator McCain, and

members of the committee. I am Richard M. Milanovich, chairman of the Agua

Caliente Band of Cahuilla Indians. I appreciate the opportunity to testify before you

today. I would like to commend the members of this committee and your staff for

bringing to light the malicious actions of two unscrupulous individuals, and those

who acted to enable their enterprise. While I had opposed the efforts of Mr.

Abramoff and Mr. Scanlon to obtain contracts with our tribe, distrusting their

claims, methods and, quite frankly, mostly their cost, it was not until I saw the secret e-mails and other information obtained by the efforts of this committee that I

began to truly comprehend the full nature of their conniving actions. This morning,

I would like to address four areas: First, I would like to provide you with a little

background on our tribe; second, I will share with you my thoughts at the time Mr.

Abramoff and Mr. Scanlon contrived to obtain contracts for their firms with our

tribe; third, I will highlight what we have learned over the last 7 months concerning

their actions; and, finally, I will describe some of the things our tribe is doing in

light of what we have learned.

I have served on the tribal council since 1977. My service began as a member

from 1977 to 1981, as secretary from 1981 until 1984, when I was elected as chairman, a position I have been honored to hold for the past 20 years.

From time immemorial our people resided in the Palm Springs area. Our people

developed complex communities in the Palm, Murray, Andreas, Tahquitz, Chino

Canyons and on the desert floor. With abundant water supply, plant and animal

life, the Agua Caliente Band of Cahuilla Indians thrived. In 1876, the Federal Government deeded in trust to the Agua Caliente Band of Cahuilla Indians 32,000 acres

of our ancestral homeland as the Agua Caliente Indian Reservation. We are industrious and creative with a reputation for independence, integrity, and justice. We

are proud of our rich history and our culture.

The Agua Caliente Band of Cahuilla Indians constitution and by-laws were adopted in 1955. The Agua Caliente Band of Cahuilla Indians has a government-to-government relationship with the U.S. Government. As a federally recognized tribe and

sovereign tribal entity, we have governmental authority over our reservation lands

and people.

The tribe’s constitution and by-laws outline the two-tiered democratic tribal government structure: The tribal membership and the elected tribal council. The tribal

council consists of five council members: Chairman, vice chairman, secretary and

two members. The chairman, vice chairman and secretary serve 2-year terms and

members serve a 1-year term. Under our constitution, action is taken by a majority

vote of the tribal council.

I would like to preface my remarks on the topic of the tribe’s business relationship

with Jack Abramoff and Michael Scanlon with the general statement that we are

still learning, together with the committee, of the efforts of these individuals to re-
52

cruit individual tribal members to collaborate in their deceitful undertakings. Concurrent with the committee’s investigations, we, of course, have begun our own internal investigation, but at the time the tribe entered into business arrangements

with these individuals and their firms, we had no idea of the steps they had already

taken in order to manipulate our democratic decisionmaking process.

While I am proud that these selfish efforts were only partially successful, clearly

these ill-motivated actions were a critical element of what appears to be a scheme

to obtain large and unjustified payments from the tribe.

As a result of the majority vote of the council, and in my capacity as chairman,

I signed service contracts with Greenberg Traurig, LLP, and Scanlon Gould Public

Affairs on July 9 and July 24, 2002. Jack Abramoff and Greenberg Traurig were

hired to assist the tribe with all political and lobbying activities relating to a wide

range of public policy issues. Michael Scanlon and Scanlon Gould were hired to help

the tribe with respect to pending gaming compact issues in California.

The first time that I met Jack Abramoff and Michael Scanlon was in the course

of their presentations seeking contracts to represent the tribe. Mr. Abramoff identified himself as a representative of one of the top law and lobbying firms in the

United States. The fact that these men and their services were associated with such

a prestigious firm was something upon which some on our council relied. In large

measure, Mr. Abramoff’s and Mr. Scanlon’s presentations rested on their self-described success on behalf of other tribes. Personally, I was skeptical with regard to

the presentation and was more than skeptical of the fees that Mr. Abramoff and

Mr. Scanlon were seeking for their firms.

I voiced my objections and sought to defeat the effort to obtain contracts. But Mr.

Chairman, as I am sure you will understand, sometimes being chairman is not

enough if others have managed to collect the votes. When the contracts and matters

relating to the contracts came to a vote, the vice chairman and I found ourselves

outvoted. Of course, at that point in time I had no idea that Mr. Abramoff and Mr.

Scanlon had already deceptively engaged in a full-scale effort that they themselves

valued at tens of thousands of dollars, to defeat certain tribal council members, myself included, in order to elect a slate more friendly to their sales pitch.

I was surprised and disappointed that some others on our council took a different

view, but at this point I was unaware of the lengths that Mr. Abramoff and Mr.

Scanlon had gone to in enlisting the support of certain individuals in our tribe. Of

course, other members of our council had also been deceived. At the time I did, however, take some solace in paying such a large retainer for Mr. Abramoff’s services

in that Greenberg Traurig is a law firm with a responsibility to honorably treat its

clients. As chairman, I thought it was my duty to try and make the best of the situation. Looking back from where we sit today with the knowledge of press reports

and the preliminary findings of this committee, it appears that some people at

Greenberg Traurig were deceived, just as we were, regarding much of Mr.

Abramoff’s activities.

It is my sense that we have only seen the tip of the iceberg-but already it appears

that Mr. Abrarnoff and Mr. Scanlon, working in conjunction with those who willingly enlisted to collaborate with them, engaged in numerous instances of improper

conduct. Their own words demonstrate that they improperly sought to manipulate

for private gain the electoral process of our tribe. This occurred both before and

after they were hired. It also appears they did not view the tribe or even the tribal

council as their clients. Instead, they worked on behalf of themselves and a small

faction of tribal members they were seeking to elevate to a position of total control

by manipulating tribal elections. In the course of their work for the tribe, Mr.

Abramoff and Mr. Scanlon attempted to hide information from the full council while

working covertly with this collaborating faction. Their own secret communications

indicate a willingness to sacrifice the interest of the tribe in exchange for the opportunity to make more money for themselves. It appears that this approach, seeking

an outcome that would actually hurt their client so that they could make more

money, was not unique in our case. While there are a number of specifics that your

investigation is revealing, perhaps the saddest is the utterly callous fashion in

which they mocked the interests of the clients they were actually hired to represent

and displayed a willingness to engage in virtually any conduct as long as they could

make money.

In April of this year, the tribal council unanimously voted to suspend its relationship with both Greenberg Traurig and Scanlon Gould.

Based on information we have already learned, we have taken further action concerning the attempts to manipulate our tribal elections. We have suspended certain

individuals from any appointed role in our government. We have retained the services of Darryl Wold, a former chairman of the Federal Election Commission, to conduct an internal tribal inquiry into whether there were any violations of tribal law.
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As chairman, I am working with our tribal council to reform our laws regarding contracting, election and other procedural safeguards. Additionally, we have asked our

legal counsel to aggressively pursue all avenues of obtaining reimbursement and

compensation for injuries caused to our tribe. We will, of course, continue to work

with the committee and other authorities.

Mr. Chairman, I would like to close by reiterating my gratitude to you, Chairman

McCain, Vice Chairman Inouye and the committee on your investigation. I will be

happy, at the appropriate time, to answer any questions that you may have. Thank

you.

PREPARED STATEMENT OF BERNIE SPRAGUE, SUB-CHIEF, SAGINAW CHIPPEWA INDIAN

TRIBE

Mr. Chairman, I am Bernie Sprague, Sub-chief of the Saginaw Chippewa Indian

Tribe. We have approximately 3,000 tribal members located in Arenac and Isabella

counties in the State of Michigan. I have served my tribe for over 19 years and I

have served as an elected official of the Saginaw Chippewa Tribe for almost 7 years.

These last 2 years have been a difficult and trying period for my tribe and myself.

On behalf of the Saginaw Chippewa Indian Tribe, I want to thank the committee

for allowing me to testify and for conducting this important investigation.

Our tribe has a long and painful history since we first came in contact with settlers hundreds of years ago. Our treaties with the U.S. Government ceded millions

of acres of our ancestral lands to the Federal Government. And like many tribal nations across this country, our people have endured generations of broken treaties

and empty promises. We have struggled for centuries against non-Indians who have

used every tactic to steal our land and our precious resources that allowed our tribe

to survive. Unfortunately, Mr. Chairman, we fight a similar battle today. They may

wear expensive suits and fancy shoes, but their greed, scare tactics and unscrupulous behavior is the same our people have faced for generations. And their goal to

take from Indian people what is not rightfully theirs is once again being painfully

repeated.

There is not a word in my language that is strong enough to describe what these

people have done to my tribe. These unsavory characters who lie, deceive, and steal

from Indian tribes need to be exposed for who and what they are.

In the fall of 2001, a small group of Washington, DC lobbyists quietly worked to

elect eight tribal members to the 12 member council. As this committee knows, it

is unheard of to have non-Indians involved in tribal elections. We do not know

where they got the money to run this campaign, but we do know these lobbyists

smeared the reputations of other candidates running for tribal council through a series of slick brochures sent to tribal members. This type of campaign has never happened before on our reservation. We now know these lobbyists have engaged in the

same practices with other tribes across Indian country.

We were shocked to learn that members of the former tribal council and the

former legislative affairs director, who is not a tribal member, were deeply involved

in this scheme. We also now know that these lobbyists struck a deal with the candidates they supported at Saginaw Chippewa. The deal was that if they got elected

to tribal council, these lobbyists would receive multi-million dollar contracts with

the tribe.

Two days after the new council took office in December 2001, a divided tribal

council approved the contracts to hire these firms against the strident recommendation of our Office of Legal Counsel. In doing so, they fulfilled their part of the deal,

these Washington, DC lobbyists were hired, and the looting of the tribal treasury

soon followed.

In 2002, I was elected to tribal council in a special election. When I began to ask

questions about the outrageous fees our tribe was paying these lobbyists, I learned

that there were no reports or documentation for any work they may have performed.

One of the most outrageous examples of unaccounted for services involves the purchase of a voter data base from Mr. Scanlon. Our tribe paid nearly $4.5 million for

a data base of voters in Michigan. That’s right, $4.5 million for a data base that

we never saw. The current tribal council researched this issue and found that you

could purchase a data base of every voter in the State of Michigan for less than

$75,000. To this day, we do not know where this money went. And this type of

spending was repeated over and over again, costing our tribe over $14 million.

There were other tribal council members who raised similar objections to this outrageous spending. Because we asked these questions, and we told tribal membership

what was happening, the Council majority removed all of us from tribal council. We
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continued to object to their looting of the tribal treasury and in the election of 2003,

almost all of the former tribal council members lost their seats in that election.

Once the new tribal council was elected in November 2003, we called in Mr.

Abramoff to discuss his contract. During this meeting, Mr. Abramoff was asked if

he had a financial or business relationship with Mr. Scanlon. He told our council

he had no relationship with Mr. Scanlon. We now know that was not true.

Mr. Chairman, I fully share your view that scheming to defraud tribes must stop

here and now and that those responsible should be prosecuted to the fullest extent

of the law. You will be pleased to know that the current tribal council has taken

steps to ensure this never happens again to our tribe. We are committed to taking

steps within our tribal government to bring openness to our contracting process. We

have drafted a tribal ordinance that creates a hiring process that all lobbyists must

follow. It ensures no secret deals or contracts for anyone. It mandates all contracts

must be approved at open tribal council sessions.

But, Mr. Chairman, and members of this committee, I am not here just to tell

you what has happened to our tribe. We have worked to put together the pieces of

this bizarre puzzle, but because we have limited access to various records, we have

not had a full accounting of where our money went. And we do not have a full account of what these lobbyists were doing. I encourage you to continue this investigation as far as it needs to go.

Mr. Chairman, I want you to know that our tribe is prepared to do whatever it

takes to get back the money that was wrongfully taken from us. We want to work

with the committee to get to the bottom of what these people did and to return to

our people money that can be used for educating our children and health care for

our elderly. From the beginning of this investigation, our Tribe has fully cooperated

with the committee and you can be assured that we will continue do so.

Again, I want to thank the committee for holding these hearings. I especially

want to thank Senator McCain who has done so much to improve the quality of life

for Indian people and has been a leader in pressing for these hearings. I am available for any questions you may have.

PREPARED STATEMENT OF CHRISTOPHER PETRAS, FORMER LEGISLATIVE DIRECTOR,

SAGINAW CHIPPEWA INDIAN TRIBE OF MICHIGAN

Mr. Chairman and distinguished members of the committee:

I am pleased to be here this morning to participate in this hearing regarding the

lobbying practices involving Indian tribes. I was employed by the Saginaw Chippewa Indian Tribe of Michigan in their Legislative Affairs Department for a little

more than 5 years beginning in December 1998 as policy research analyst and ending in January 2004 as director of legislative affairs. During my employment with

the Saginaw Chippewa Indian Tribe of Michigan I served under the direction of four

tribal councils, including an interim tribal council appointed by former Bureau of

Indian Affairs Assistant Secretary, Kevin Gover in 1999. My employment ended

with the tribe when the current tribal council headed by Chief Audrey Falcon and

Sub-chief Bernard Sprague voted to completely eliminate the tribe’s legislative affairs director position. A few newspaper stories however reported that I was fired.

This is not true and is reflected in the January 23, 2004 minutes of the tribal council, special session, minutes, where the minutes clearly indicate that the current

tribal council voted to eliminate the director of legislative affairs position as a departmental restructuring move and not for inadequate performance or any other

reason as reported in other news publications.

One newspaper printed a correction after incorrectly reporting in a story that I

was fired by the Saginaw Chippewa Indian Tribe’s current tribal council and only

was the correction printed until after the reporter re-checked the facts by reading

the January 23, 2004 minutes of the Saginaw Chippewa Tribal Council special session.

I have read over the past several months in news publications the attacks on

former tribal council members of the Saginaw Chippewa Tribe of Michigan who

voted through democratic tribal council procedures and with contract review by inhouse tribal legal counsel to hire consultants Capital Campaign Strategies and

Greenberg Traurig to assist the Saginaw Chippewa Indian Tribe of Michigan in advocating policy positions of the tribe at the Federal and State levels of government.

What is disconcerting about the news stories is the claim, by unidentified congressional staff, that no significant issues were present during the employment period

of Capital Campaign Strategies and Greenberg Traurig with the Saginaw Chippewa

Tribe of Michigan. This is not the case.
55

Indian country has experienced challenges to tribal self-sufficiency and determination over many decades. Policy proposals that attempt to undermine important tribal government service areas such as Indian health care, Indian education, and even

Indian free enterprise efforts have all surfaced. These threats have from time-totime specifically affected tribal nations, including the Saginaw Chippewa Indian

Tribe of Michigan. A tribal nation’s ability to express the will of its members to Federal, State, and local governments and participate in our American democracy requires both public officials and the general public to respect and have trust in the

capabilities of tribal leaders. Calling into question the intellectual capabilities of

tribal leaders to make policy and hiring decisions only insults Indian country and

assumes Native Americans are incapable of running their own governments. This

surely is not what tribal nations want or expect from public officials and the general

public.

Unfortunately, democratically elected Tribal-legislators and the tribal member

voters who elect them are facing a more personal threat to their self-sufficiency and

determination throughout Indian country. And that is an attack on their intellectual

capabilities to make informed decisions about what their tribal government needs

are and who they may hire to advocate their tribe’s policy positions at the Federal

and state levels of government. Tribal members who are elected democratically to

their tribal legislatures understand the needs of their governments much better

than non-Native Americans who typically are unfamiliar with the culture, Federal,

State, and local policy issues directly affecting a particular tribe, and especially

when it comes to understanding the intra-tribal family dynamics that often serve

as the compass for finding a tribal nation’s direction. Determining what is in the

best interest of a tribal nation should be left to a tribal nation to decide. The United

States, for example, does not establish policy for its citizens based on the desires

of what other countries feel the United States should offer its citizens. While outside

factors can clearly change the course of direction for a government, its path is chosen by the people through their elected representatives.

Tribal government leaders like their counterparts in Federal and State government are fully capable of making informed decisions and calculating the cost/benefits of those decisions. The decision of a tribal government to hire a company to advocate its policy positions and protect its economic well-being is the choice of that

tribal government and not that of tribal employee staff or outside observers. To subjectively challenge the decision of a tribal government to spend an amount agreed

to by the tribe and its vendor on services to be provided really challenges two

things: First, it challenges the intelligence of the elected tribal legislators and thus

their voters and second, it challenges the notion of a free-market system where individuals can enter into the market with a good or service and sell the goods or services at a price that they and the consumer agree to.

The Saginaw Chippewa Indian Tribe of Michigan made a decision to hire Capital

Campaign Strategies and Greenberg Traurig at an amount agreed to by both companies and the tribe. The decision to hire both firms was conducted by a democratic

vote of the tribal council. The tribe’s in-house legal counsel negotiated the contracts.

Opinions over whether or not the amount paid by the tribe to Capital Campaign

Strategies and Greenberg Traurig was too high is subjective and appears over the

last few months to be used in politicizing Native Americans and their intellectual

capabilities. While some unidentified congressional staff, as reported in newspapers,

may have felt that no significant Federal issues existed that affected Indian country

during the time Capital Campaign Strategies and Greenberg Traurig were hired by

the Saginaw Chippewa Indian Tribe, this clearly was not the position held by the

tribal council at that time.

In addition, the recently rendered Federal labor decisions affecting tribal government labor practices for example show that there actually were significant Federal

issues pending that affected Indian country. Not to mention for example that Indian

health care funding and education funding were and have been for some time significant policy issues for Indian country.

Tribal governments have come a long way in establishing strong and positive government-to-government relations with the United States. Now more than ever,

many tribal nations are hiring the best firms, protecting their self-sufficiency and

determination, and expressing the will of their Members to Congress and State legislatures. The Saginaw Chippewa Indian Tribe is one of those tribal governments.

Challenging a tribal government’s capability while at the same time politicizing the

cost of a mutually agreed upon contract for services between a tribe and a vendor,

sends a dangerous message to Indian country. Does the committee intend to review

all contracts with sovereign nations, or at least the current contracts with the current tribal governments? If Native Americans are treated as unintelligent decision-
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makers and their democratic tribal council procedures for approving contracts are

considered non-legitimate, Indian country progress will be set back 150 years.

In closing, I would like to thank the committee for granting me this opportunity

to share these thoughts on lobbying practices in Indian country.
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Æ

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TRIBAL LOBBYING MATTERS

WEDNESDAY, NOVEMBER 17, 2004

U.S. SENATE, COMMITTEE ON INDIAN AFFAIRS, Washington, DC.

The committee met, pursuant to other business, at 3 p.m. in

room 216, Hart Senate Office Building, Hon. Ben Nighthorse

Campbell (chairman of the committee) presiding.

Present: Senators Campbell, McCain, Inouye, Dorgan, and

Conrad

STATEMENT OF HON. BEN NIGHTHORSE CAMPBELL, U.S.

SENATOR FROM COLORADO, CHAIRMAN, COMMITTEE ON

INDIAN AFFAIRS

The CHAIRMAN. Good afternoon. I’m glad we have such a good

turnout for this. It’s an important hearing.

The committee hearing today is the second in a series of hearings

into allegations of improper business lobbying and financial transactions by Jack Abramoff, Michael Scanlon and their entities on behalf of Indian tribes. At the committee’s first hearing on September

29, 2004 the evidence and testimony showed that under a variety

of arrangements, six tribes paid Mr. Scanlon more than $66 million

and that Mr. Scanlon in turn paid Mr. Abramoff more than $21

million.

The September hearing also revealed that Scanlon and Abramoff

assisted in the campaigns and elections of tribal council members

at two of the tribes, did not charge for their services and after the

elections obtained multi-million dollar contracts from the same

tribal councils that they helped to elect. Finally, the hearing revealed that while they were being paid tens of millions of dollars,

Abramoff and Scanlon held their tribal clients in very low regard,

often referring to them as monkeys, troglodytes, morons, and

worse.

While the hearing in September disclosed this evidence, our investigation has continued to uncover other distasteful and shocking

details.

Today’s hearing will focus on the Tigua Tribe of Texas. The story

of Abramoff, Scanlon, and the Tiguas looks to me like nothing short

of a classic shakedown operation. These men, working with allies,

persuaded the State of Texas to force the closure of the tribe’s casino, located in El Paso. Having achieved this interim step of shutting down the tribe’s casino, Abramoff and Scanlon then approached the Tiguas, offering their services to assist the tribe in re-
220

opening its casino. For their services, they charged the tribe the

tidy sum of $4.2 million.

Documents uncovered by committee investigators shed more light

on the Tiguas. To assist the members, as well as the general public, committee staff has prepared those documents most pertinent

to the matters covered by this hearing. This is the stack I am holding, and I now offer these documents and move that they be entered into the record of this hearing.

Is there a second?

Senator McCain.

Senator MCCAIN. I second.

The CHAIRMAN. Senator McCain seconds it, and hearing no opposition, these documents will be included in our hearing testimony.

[Referenced documents appear in appendix.]

The CHAIRMAN. These documents demonstrate the extent of

Scanlon’s and Abramoff’s cynical manipulation of the Tigua Tribe.

Let me just point out a few of these things in detail.

In 2002, Mr. Abramoff first offered to help the Tiguas on a pro

bono basis, provided the tribe hire him in the future as a lobbyist

for between $125,000 and $175,000 per month. That’s some pro

bono work.

Then just last year, Mr. Abramoff approached the Tiguas with

yet another scheme that would have benefitted the Eshkol Academy, the Jewish boys school he founded located just outside of

Washington, DC. Mr. Abramoff declined the tribal request that he

be paid a retainer. Mr. Abramoff recommended that at no cost to

the tribe, the Academy would buy up term life insurance policies

on elderly tribal members and that the Academy would be named

as the beneficiary in case of their death.

In effect, Mr. Abramoff asked to be paid by putting prices on the

lives of tribal elders. We have witnessed a lot of unseemly and unethical and vulgar things during the course of this investigation,

but asking a tribe to pay a lobbyist with death benefits I think is

the most distasteful thing I think we have seen yet in this hearing

or the former one.

Writing to one of his key allies in the effort to shut down the

Tigua’s casino, Mr. Abramoff’s references the tribe’s donations to

the Democrats, saying, ‘‘I wish those moronic Tiguas were smarter

in their political contributions. I’d love to get our mitts on that

moolah.’’ And that’s in quotations. ‘‘Oh, well,’’ he continues, ‘‘stupid

folks get wiped out.’’ Stupid folks get wiped out. I think that about

says it all about their opinion about their very clients, the Tiguas.

Finally, on the day the Tigua Tribe voted on their contract, Mr.

Abramoff and Mr. Scanlon exchanged e-mails regarding a newspaper story about some 450 Indian employees at the tribe’s recently shuttered casino being thrown out of work. This group of

workers included an elderly woman who worried that she would

not be able to find another job because of her age. Mr. Scanlon was

evidently very excited that the article was on the front page, and

in quotes in his e-mails, ‘‘While they [the Tiguas] will be voting on

our plan.’’ Mr. Abramoff’s reply to that: ‘‘Is life great or what!!!’’

Now, I have been around this town for 2 decades. This strikes

me as more than cynical. Rather than being concerned about the

misfortunes of the tribe and some of its members, particularly the
221

elderly, that they were soliciting for business, Abramoff and Scanlon seemed happy, in fact almost gloating, about the prospect that

the Tiguas were having their casino closed, so that hundreds of employees would be thrown out of work, all because they were slated

to make millions on trying to get that very casino reopened.

There is another element to the Tigua story that I feel compelled

to address. It appears that Mr. Abramoff and Mr. Scanlon used the

good name and reputation of our fellow members in Congress in

their attempts to part the tribe from its money. You will hear today

from witnesses and read from documents indicating that Mr.

Abramoff and Mr. Scanlon contended that Senator Dodd and Congressman Ney were enlisted to spearhead efforts in Congress to

provide a legislative fix to the Tigua’s problems.

From what we know, that was not the case. Senator Dodd knew

nothing about the proposed legislative fix, never supported it. And

in fact, we are told that when the idea was proposed to his senior

staff, it was rejected at least three times. Congressman Ney agreed

to support a legislative fix after being told by Mr. Abramoff that

Senator Dodd wanted the language. So there was a lot of shady

things going on.

In short, the evidence demonstrates that Mr. Scanlon and Mr.

Abramoff told their clients that Senator Dodd and Congressman

Ney would push their proposal, knowing full well that was not the

case, in an effort to further persuade the Tigua Tribe into continuing to pay them more millions of dollars. Today, the committee will

hear from Carlos Hisa, the Tigua Tribe’s Lieutenant Governor, and

Marc Schwartz, a consultant who essentially was the point person

for contact between the Tiguas and Abramoff and Scanlon.

I would like to also mention another relevant item. For those of

you who watched or listened to the September 29 hearing or who

were here, you may recall that the committee repeatedly sought

the presence of Mr. Scanlon and had been obliged to issue a number of subpoenas to that effect. At first, Mr. Scanlon’s attorney declined to accept the subpoena, even though he had accepted other

committee subpoenas for Mr. Scanlon and the various corporate entities he owned or operated.

At that time, I said to the U.S. Marshals, asked them very specifically to find out why he had not been served and to try to make

sure that he was served when he did surface, and that at some

point he would sooner or later be coming before this committee.

That subpoena has been served, and I understand he is here in the

audience here today and we will hear from him just a little bit

later.

There is another person who I believe flouted the authority of

this committee. That person is Jon van Horne, who was served

with a document subpoena that was due on October 5. To this date,

the committee has not received the documents called for under the

subpoena nor an explanation for his non-compliance. This will be

the last committee hearing over which I preside as chairman, but

I am convinced that Senator McCain, who will be the new incoming

chairman, and Senator Dorgan, who will be the new vice chairman

when we start again, will take that into consideration. If those documents are not forthcoming, I would hope that they would ask for
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a vote of this committee to find him in contempt of Congress by not

providing the information the committee requested.

With that, I will just go ahead and submit the rest of my opening

statement into the record, because I know we have other members

here who would also like to comment. Since Senator Inouye is not

here yet, I will go ahead and ask Senator McCain if he would like

to offer some opening remarks, since you were instrumental in asking for this investigation.

[Prepared statement of Senator Campbell appears in appendix.]

STATEMENT OF HON. JOHN MCCAIN, U.S. SENATOR FROM

ARIZONA

Senator MCCAIN. Thank you very much, Mr. Chairman. And

thank you for your dedication to this effort.

In light of the fact that this may be the last committee hearing

you may chair before your retirement, I would like to express on

behalf of all my colleagues on both sides of the aisle your outstanding contributions to Native Americans, to their welfare and your

continued dedication and commitment, and your outstanding work

as chairman of this committee. We admire you and we respect you

and we will miss you enormously, and we wish you every success

in the future.

Is life great or what, exclaimed Jack Abramoff in an e-mail to his

friend and business partner, Michael Scanlon, on February 19,

2002. Few would have quibbled with Mr. Abramoff at the time. As

we learned during the committee’s September 29 hearing, the two

men shared a secret partnership that connived to collect at least

$66 million from six American Indian tribes across the Nation.

When Mr. Abramoff sent his February 19 e-mail, he had already received approximately $3 million from Mr. Scanlon’s companies.

Over the next couple of years, he would receive almost $18 million

more. The two, however, kept their partnership hidden from the

tribes and hidden from the world. For these two men, it was seemingly all about the money.

In February 2002, the money flowed, so life was indeed great for

Jack Abramoff and Michael Scanlon. At the same time, life was not

so good for the Ysleta del Sur Pueblo of El Paso, TX, also known

as the Tigua. The tribe was fighting for its financial life in the

Texas courts and legislature. According to a September 26, 2004 article in the Washington Post, the State of Texas had sought a judicial order closing the tribe’s Speaking Rock Casino.

The Post article also reported in some detail how Mr. Abramoff

and Mr. Scanlon had worked behind the scenes to support Texas’

efforts to close the casino. They had participated in a grassroots

and public relations campaign that was designed in part to lend political cover to Texas legal efforts. Evidence suggests that Mr.

Abramoff and Mr. Scanlon also worked behind the scenes in Texas

to quash the Tigua’s attempts at a legislative solution.

In an internal e-mail, Mr. Abramoff boasted to colleagues in

2003:

Bill is moving H.B. 809 in the Texas State House, which will enable Indians in

Texas to have totally unregulated casinos. If passed out of the House, criminal jurisprudence committee by a 6-2 vote, the current speaker, Tom Craddock, is a strong

supporter. Last year we stopped this bill after it passed the House using the Lt

Gov., Bill Ratcliffe, to prevent it from being scheduled in the State Senate.
223

Former Texas Lieutenant Governor did refuse to schedule legislation for a floor vote. The State’s legal efforts were successful and

the Tigua closed its casino on February 12, 2002. It was a low point

for the tribe.

According to tribal representatives the revenue generated from

the Speaking Rock Casino had helped to lift the tribe out of poverty. It enabled the tribe to provide education for its children and

health care for its elders. It had given them hope where there was

none before. The closure of the casino, according to the tribe,

threatened the promise of a new and better tomorrow for future

generations.

In the Tigua’s desperation and despair, Mr. Abramoff and Mr.

Scanlon found opportunity and hope, not for the tribe, but for

themselves. In the tribe’s misery, Jack Abramoff and Michael Scanlon saw money. ‘‘I’m on the phone with Tigua. Fire up the jet, baby,

we’re going to El Paso,’’ wrote Jack Abramoff in a February 6, 2002

e-mail. Responding, Michael Scanlon summarized their objective: ‘‘I

want all their money.’’

When Mr. Abramoff and Mr. Scanlon approached the tribe, they

painted themselves as sympathetic to the tribe’s plight. In a February 18, 2000 e-mail to tribal consultant Marc Schwartz, which we

have blown up onto a poster board, Mr. Abramoff wrote,

Our motivations for this representation are manifold, including the critical importance of not allowing tribal sovereignty to be eroded by the actions of the State of

Texas. 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.

Mr. Abramoff downplayed his primary motivation by writing

that:

It would be insincere of me not to note that our other motivations include the

hope and expectation that if we succeed, we can expect to have a long term relationship with the tribe by representing their interests on the Federal level.

Mr. Abramoff’s statement was the height of hypocrisy, the pinnacle of deception. The very injustice he described he and Mr.

Scanlon had helped to create.

With a straight face and without expressed remorse, Jack

Abramoff and Michael Scanlon solicited the tribe to retain them to

help reopen the Tigua casino. According to witnesses interviewed

by my investigators, neither Mr. Abramoff nor Mr. Scanlon ever

disclosed their role in the lobbying and public relations campaigns

waged to close the same Tigua casino. They certainly never disclosed the lucrative partnership they shared.

Their duplicity was pervasive. At the same moment they solicited

the tribe, Jack Abramoff wrote:

I wish those moronic Tiguas were smarter in their political contribution. I’d love

us to get our mitts on that moolah.

That’s exactly what Jack Abramoff and Michael Scanlon set out

to do. The very next day, on February 12, 2002, they traveled by

private jet to the Tigua Reservation in El Paso. There they made

their pitch.

According to witnesses at that meeting, Jack Abramoff offered to

help the tribe for free. He would later repeat that promise in his

February 18 e-mail to Mr. Schwartz. But Mr. Abramoff insisted
224

that the tribe had to retain Michael Scanlon for the effort to be successful. Jack Abramoff claimed that Michael Scanlon was a preeminent expert in grassroots lobbying. Michael Scanlon wasn’t

cheap, Mr. Abramoff told the tribe, but he was the best there was

in the business. Mr. Scanlon’s asking price: $5.4 million.

Of course, from the last hearing, we know that when Mr.

Abramoff advocated Mr. Scanlon’s interests, he was advocating his

own financial interests. Make no mistake: Jack Abramoff was not

going to work for free.

On February 18, 2002 Jack Abramoff submitted to the tribe a

document entitled Operation Open Doors, a proposal prepared by

Michael Scanlon. Mr. Abramoff endorsed the proposal wholeheartedly.

The proposal Mike Scanlon has prepared is, in my view, the best chance the tribe

has to overcome the gross indignity perpetuated by the Texas State authorities.

Operation Open Doors supposedly entailed a massive undertaking funded by a nationwide political operation.

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.

Scanlon said his firm promised to build two customized data

bases for the tribe, conduct numerous polls and wage a grassroots

and grasstops campaign. While he did not guarantee success, Mr.

Scanlon wrote, ‘‘Under no circumstances do we believe it could be

classified as high risk, either.’’ Mr. Scanlon’s promises have so far

proven empty. Witnesses interviewed by my staff have confirmed

that the data base was not customized. Scanlon/Gould did not even

construct it. They subcontracted out the work for less than

$100,000, a small sum that pales in comparison to the $1.8 million

he charged the Tribe for it. And it seems Scanlon/Gould failed to

provide the vast majority of services to implement the ‘‘massive undertaking’’ the tribe was told would occur.

On February 19, 2002, El Paso Times newspaper reported that

the tribe had to lay off 450 employees as a result of shutting down

its casino. It was not enough the two men sought to capitalize on

the tribe’s plight; they actually reveled in it. Mr. Scanlon forwarded

the article to Mr. Abramoff, advising him ‘‘This is on the front page

of today’s paper, while they will be voting on our plan.’’ It was in

response to Mr. Scanlon that Mr. Abramoff dashed off his ‘‘is life

great or what’’ e-mail.

Jack Abramoff and Michael Scanlon smelled money. In fact, 19

minutes later, Mr. Abramoff e-mailed Mr. Scanlon again. ‘‘One

hour, 45 minutes and counting, my friend.’’ The tribal council ultimately decided to move forward with the plan, believing Mr.

Abramoff’s representation that he already had ‘‘a couple of Senators willing to ram this through initially.’’

Key to Mr. Abramoff’s and Mr. Scanlon’s plan was secrecy. No

one was to know about their involvement in the effort to assist the

Tigua. According to witnesses interviewed by my staff, Mr.

Abramoff would take no money from the Tribe to avoid having to

register under the Lobbying Disclosure Act.

In meetings and telephone conversations with witnesses, Jack

Abramoff maintained his role was simple. He would have one or
225

more Representatives or Senators slip into a conference report very

discreet language allowing the Tigua to reopen their casino. After

passage of such an amendment, Michael Scanlon and his company

would then run a public relations campaign to beat back any attempts to repeal the language.

Almost immediately, Mr. Abramoff’s cover was nearly compromised when he was included on an e-mail list from a tribal representative. Mr. Abramoff was furious. In an e-mail to Mr. Scanlon,

Mr. Abramoff wrote, and I will try to redact the profanity so I don’t

offend anyone:

The f-ing moron put my name on an e-mail list. What a f-ing moron. He may have

blown our cover, damn it. We’re moving forward anyway and taking their f-ing

money.

That the secrecy and hence the effort may have been compromised could not dissuade Mr. Abramoff from taking the tribe’s

money. He was resolved to take the Tribe’s money whether he

could help them or not. Even before the Tigua signed a formal contract with Scanlon/Gould Public Affairs, Mr. Abramoff could not

wait for the money to arrive. On March 3rd, 2002, he asked Mr.

Scanlon, ‘‘Did we get the Tigua money?’’ Even after the tribe sent a check for $2.1 million, the two could

not contain their insatiable greed. On March 19, 2002, Michael

Scanlon e-mailed Jack Abramoff, asking, ‘‘Is he’’—meaning Marc

Schwartz—‘‘happy? Where is our f-ing money?’’ Abramoff responded 10 minutes later, instructing Mr. Scanlon to call Mr.

Schwartz and asked for ‘‘our damned money.’’ By the end of March,

the tribe had paid Scanlon/Gould a total of $4.2 million for what

was supposedly going to be a massive public relations campaign.

On April 8, 2002, Capital Campaign Strategies, the alter ego of Scanlon/Gould, paid $2.1 million to Mr. Abramoff’s company, K

Gold. During this time, Jack Abramoff and Michael Scanlon identified election reform as the vehicle into which they would insert the

Tigua’s provision.

Of course, only after the tribe had paid Scanlon/Gould millions

of dollars did Michael Scanlon reassess the likelihood of success. In

an April 2002 report to the tribe, Mr. Scanlon wrote that:

With political cover generated, we feel pretty good about our prospects of tacking

the legislation on and getting it through. But pleased be advised we are taking the

most high risk approach to this by using election reform as a vehicle.

Mr. Scanlon’s words stand in stark contrast to his earlier opinion

that his efforts could in no way be classified as high risk. Of

course, he now had the luxury of being less optimistic, since he had

the tribe’s money in his pocket.

Despite receiving $4.2 million from the tribe, Jack Abramoff and

Michael Scanlon wanted more. From mid to late 2002, Jack

Abramoff hounded the tribe for contributions to the Capital Athletic Foundation, his private charitable foundation that he used to

support the all boys school he had founded and operated in Maryland. He asked the tribe to contribute $50,000 to a golf trip to Scotland, sponsored by his foundation. Ultimately, the tribe declined.

That did not deter Mr. Abramoff and Mr. Scanlon, however. In

a September 18, 2002 e-mail, Mr. Abramoff reminded himself, ‘‘We

need more money for backlash after the Tigua launch.’’ 21⁄2 hours

later, Mr. Abramoff wrote to Mr. Scanlon:
226

Did you speak with Marc Schwartz? I have a great idea. Let’s tell him we are

launching all missiles to get the bill to vote and therefore we’re using all our resources, so that once the bill passes we immediately need more money. Okay?

Approximately 1 month later, election reform because law without the Tigua’s provision. To this day, the tribe remains unclear on

where the $4.2 million they paid Scanlon went, because it appears

it was not used for the purportedly massive PR campaign Mr.

Scanlon had promised to wage on their behalf.

Mr. Abramoff’s pursuit of more money from the tribe did not end

in 2002. Only last year, Mr. Abramoff attempted to convince the

tribe to take out life insurance on its elders and make Eshkol Academy, the all boys school he founded, the sole beneficiary. Mr.

Abramoff claimed that the proceeds of the policies would go to his

school, which would then pay Greenberg Traurig for the lobbying

fees incurred by the Tigua.

I again direct everyone’s attention to the poster, which reflects

Mr. Abramoff’s e-mail to Mr. Schwartz on the subject:

Marc, per our discussion, the following short memo describe the opportunity to obtain lobbying funds via the insurance program. This will also greatly benefit our

school, which means the whole world to me. If it can work, it’s truly a win-win. On

behalf of a registered non-profit charity, such as the school, CFS will enroll Native

American elders 75 years and older in term life insurance.

The premiums will be entirely financed with both debt and equity using the insurance policies, no obligation of any kind to the

tribe or Native Americans of the charity, and repaid by the proceeds of the policy at the demise of the insured. Any remaining

funds at that time will accrue to the charity. From these funds, the

school shall pay Greenberg Traurig its fees and any out of pocket

costs for a new Washington representation.

The Washington representation work done by Greenberg Traurig

made possible as a consequence of this program should be for the

sole benefit of the tribe, including efforts to obtain Federal appropriations, grants and other legislative and administrative assistance for the tribe.

After brief consideration, the Tigua rejected it, because ‘‘it just

wasn’t right.’’

The story I just shared with you and which we will learn more

about today is tragic. Jack Abramoff and Michael Scanlon preyed

upon the tribe and its members when they were most vulnerable.

They played upon their hopes and fears. They went to El Paso selling salvation and instead delivered snake oil. Those two men

walked away with money that would have gone and should have

gone to the children and elders of the tribe. Why? Because Jack

Abramoff and Michael Scanlon were all about the money.

In closing, I just want to thank the Tigua Tribe, Lieutenant Governor Hisa and Mr. Schwartz for their invaluable assistance and

continuing cooperation in the investigation and for their participation in today’s hearing. Mr. Schwartz told my investigators that

after the Washington Post articles broke earlier this year about the

other tribes, Mr. Abramoff called him and said, ‘‘Don’t worry, no

one will ever know about the Tigua.’’

Well, Mr. Abramoff, the committee knows and now the rest of

the world knows, too, about the gross indignity it seems you and

Mr. Scanlon perpetrated against the tribe. And I pledge, as a mem-
227

ber of the Committee on Indian Affairs, that we will not stop until

the complete truth is told.

I thank you, Mr. Chairman.

The CHAIRMAN. Thank you, Senator McCain.

I’d like to yield to Senator Dorgan, who will be the incoming vice

chairman of this committee starting in January. Senator Dorgan.

STATEMENT OF HON. BYRON L. DORGAN, U.S. SENATOR FROM

NORTH DAKOTA

Senator DORGAN. Mr. Chairman, thank you very much. Let me

add my voice to that of Senator McCain’s to thank you, Senator

Campbell, for the remarkable work you have done over a long period of time. It has been an honor to serve with you.

It would serve no purpose for me to repeat much of what Senator

McCain has just described. I think he has described this in great

detail and all I can say is that the substantial amount of reading

I have done, which includes almost all of the memos that have

been referenced here, leads me to say that those involved in this

sickening episode should all hang their heads in shame. It is a disgusting thing to investigate and to read. It is about double dealing,

it is about secret deals, it is about billing for services that were not

performed. But mostly it is about deceit and deception. I would

agree with Senator McCain, we need to follow this to the end of

the trail, find out who did what and hold them accountable for it.

So let me not repeat it. Let me thank my colleague, Senator

McCain for the statement that you have made, which I think is explicit in its detail. Thank you very much.

The CHAIRMAN. Senator Conrad.

STATEMENT OF HON. KENT CONRAD, U.S. SENATOR FROM

NORTH DAKOTA

Senator CONRAD. I thank the chairman and I want to thank my

colleagues as well, Senator McCain and Senator Dorgan. Certainly

Senator Inouye as well.

It is hard to find the words to describe this. It’s despicable, it is

corrupt. Most of all it is incredibly, deeply cynical. It is hard to believe that people could sit around and conjure up a scheme like

this, to on the one hand work behind the scenes to get casinos shut

down and then to go to the affected tribes and ask for millions of

dollars to get the casinos opened back up.

And all the time to refer to their clients as morons, as idiots,

troglodytes. It’s a level of arrogance that I must say is almost unparalleled. If you were to set out to write down a scheme that

would reveal the basest nature of people, you’d have a hard time

coming up with more examples than have been provided by this

case. This Jack Abramoff, Michael Scanlon, taking advantage of the

political system in the most crass and crude way, all for their own

enrichment.

You have to ask yourselves, what kind of people are these? What

kind of people are these that would cook up such a scheme and

then actually carry it out? It’s despicable. They deserve the

harshest treatment that the legal system can provide.

I thank the Chairman.
228

The CHAIRMAN. I thank you, and we will now proceed with the

first panel. That will be Lieutenant Governor Hisa of the Tigua

Tribe and Marc Schwartz. Would you please come to the table and

remain standing for 1 minute.

Will you please raise your right hand? Do you swear to tell the

truth, the whole truth and nothing but the truth, so help you, God?

Mr. HISA. Yes.

Mr. SCHWARTZ. Yes.

The CHAIRMAN. Thank you. Please be seated.

Mr. Schwartz, I think we’ll go ahead and start with you, if that’s

all right. Will you also identify the people who are with you, too,

besides the Lieutenant Governor.

STATEMENT OF MARC SCHWARTZ, PRESIDENT, MARC

SCHWARTZ PARTNERS, INC., ACCOMPANIED BY MITZI SHANNON AND JOHN BATOON

Mr. SCHWARTZ. Yes; this is my legal counsel, Mitzi Shannon, and

legal counsel for the Tique Tribe is John Batoon.

The CHAIRMAN. Thank you. Proceed.

Mr. SCHWARTZ. Thank you, Mr. Chairman and distinguished

members of the committee.

My name is Marc Schwartz, and I have had the privilege of

working with the Tigua Tribe in matters involving public relations

and government affairs since 1998. I’m sure many of you are wondering just how Abramoff and Scanlon came before the Tigua

Tribe, maybe more importantly, how seemingly bright folks could

have fallen for their schemes.

In early 2002, Mr. Abramoff, through an attorney representing

the Choctaw Tribe, had offered to visit with the Tigua Tribe about

a solution to their gaming problems. I first spoke with Mr.

Abramoff on February 6, and he expressed his indignation over

what had occurred with the tribe and specifically referred to the

need to right the terrible injustice that had been brought upon the

tribe.

Unlike others who offered solutions, Mr. Abramoff had both the

credentials, as best could be determined, and more importantly, it

offered the service of both himself and his firm at no charge. This

was quite a difference from the usual band of con men who surface

during a crisis to prey upon those involved in the crisis.

During Mr. Abramoff’s first meeting with the tribe on February

12, he characterized his presence at the meeting alternately as

being interested in righting the wrong that had been perpetrated

on the tribe and representing the tribe after his ultimate success

in the legislative effort. He explained to us that Mr. Scanlon was

the preeminent expert in grassroots politics and that with his experience with Representative Tom DeLay had developed a reputation

as ‘‘the go-to guy for the most difficult campaigns.’’

Also during that meeting, Mr. Scanlon represented that his part

of the effort would be expensive, essential and exclusive. He described in his proposal to the tribe shortly after the first meeting

that:

Operation Open Doors is a massive undertaking fueled by a nationwide political

operation. This political operation will result in a majority of both Federal chambers
229

either becoming close friends of the tribe or fearing the tribe in a very short period

of time.

After the initial meeting, in an e-mail to me dated February 18,

Abramoff said:

As we discussed, until we are able to achieve the Federal legislative fix, we at

Greenberg Traurig will not be engaged by the tribe for services officially. All our

work will be done on a pro bono basis. Once the legislation is signed by the President, we would anticipate the tribe engaging us to represent it at the Federal level

and assist with efforts to obtain a class III compact. Our normal rate in our tribal

government practice is between $125,000 and $175,000 per month.

Critical to the success of the program according to Abramoff and

Scanlon was the necessity to maintain absolute and complete secrecy. The friendly legislators that would be carrying this measure

for Abramoff required this, and Abramoff explained that this was

the most important concept to the program. Of course, secondly

possibly to the political contributions that had to be made in support of his friends.

From every outward view, Mr. Abramoff was searching for legislation and ‘‘friends’’ on the Hill that would do this for him. Mr.

Scanlon and his associates were busy creating the tribe’s monolithic political response effort that would be centered around a customized data source, one that I had come to believe from their accounts would be the envy of even the most sophisticated presidential campaigns.

In late March 2002, Abramoff had reported that he and his staff

had spoken to Representative Bob Ney, who was carrying the Election Reform Bill and agreed to carry the Tigua language. On March

26, I received a phone call from Mr. Abramoff, telling me that the

tribe needed to make additional contributions to Congressman Ney

through some PAC’s he had. He told me it was critical. I approached the tribal council with the request for the $32,000 in contributions and it was approved. Later that same day I received an

e-mail from a Greenberg Traurig staff person with the breakout

and addresses for those contributions.

Each of the additional contributions were outside of what the

council had previously approved as part of the initial agreement

with Abramoff. But those kinds of requests continued throughout

the summer of 2002. On June 7 of the same year, I received an email from Abramoff stating that Congressman Ney had asked if the

tribe could cover an expense for a trip to Scotland. The cost was

suggested to be $50,000, and again, Abramoff referred to him as

‘‘our friend.’’

As the election reform measure languished throughout the summer, Abramoff and Scanlon continued to report on substantial

progress and a virtual guarantee of success. During that time, I requested a meeting between tribal representatives and Congressman Ney. Abramoff set up the meeting in early August of 2002. In

an e-mail, Abramoff mentioned that Congressman Ney did not

want his trip to Scotland brought up, as he would show his appreciation to the tribe later.

For the rest of the months leading up to October 2002, both

Abramoff and Scanlon continued to report that the Senate side

would not be a problem, since Senator Dodd had agreed to include

the solution through his side. It wasn’t until the announcement of
230

the final passage of the election reform measure that Abramoff

phoned to say that Congressman Ney had reported Senator Dodd

had gone back on his word and stripped the measure from the committee report.

Mr. Chairman and members of the committee, you can only

imagine the sheer disappointment we all felt about these events.

For an almost sure thing, as Abramoff had stated numerous times,

to utter defeat was extremely hard to take. In a phone call on October 4, Abramoff said Congressman Ney wanted to speak directly to

the tribal council to express his outrage. On October 8, Congressman Ney held a conference call with the tribal council and told

them about his disbelief that Senator Dodd had gone back on his

word. He further reported that he would continue to work on the

issue and believed that the tribe was entitled to their gaming operation.

We were extremely disappointed by all of these actions and certainly by the results that we’ve discovered since the outcome of the

Washington Post articles.

I thank you all for your kind attention and for the opportunity

to share this information with you.

[Prepared statement of Mr. Schwartz appears in appendix.]

The CHAIRMAN. Normally we would take both testimonies first,

but since you have referred in your testimony to several of our colleagues, I’d like to yield to Senator Dorgan for a statement from

Senator Dodd.

Senator DORGAN. Mr. Chairman, the committee did contact Senator Dodd, with the information that Mr. Schwartz revealed. Senator Dodd asked that his statement be included in the record and

also read for the record, so I will read it, inasmuch as his name

was used.

The CHAIRMAN. Please proceed.

Senator DORGAN. This is all in quotes, statement of Chris Dodd

on Marc Schwartz testimony.

I don’t know Jack Abramoff or Mike Scanlon.

Again, this is Senator Dodd.

So any representations they might have made without my knowledge regarding

me and efforts at recognition of the Tigua Tribe are categorically wrong and false.

They never contacted me on recognition of the Tigua Tribe and I never represented

either to them or to Congressman Ney that I would in any manner work legislatively to recognize the Tigua Tribe.

Congressman Ney’s staffer, Lottie Shackleford, did approach my

office during the waning hours of negotiations over the HAVA legislation to inquire whether recognition provisions for the Tigua

Tribe could be included in the bill. The suggestion was summarily

rejected. The fact that the HAVA bill never included any legislative

language regarding this tribe should confirm that fact in no uncertain fashion.

Continuing to quote Senator Dodd:

I am particularly proud of the HAVA legislation and am angry that there were

those who were seeking to use it to advance their own interests. I am also, needless

to say, angry that unbeknownst to me, people were trading on my good name, especially since I have aggressively fought for years to reform the recognition process,

so that the criteria at the BIA is based upon facts and not politics.
231

I intend to continue to push for those reforms, especially since

this activity clearly highlights further problems with the recognition process. I had no involvement whatsoever in any effort to recognize this tribe. Mr. Abramoff and his associates need to be held

accountable for their duplicitous, greedy and underhanded actions.

That in its entirety is the statement from Senator Dodd that he

wished to be read into the record today.

The CHAIRMAN. It will be included in the record in written and

verbal form.

[Prepared statement of Senator Dodd appears in appendix.]

The CHAIRMAN. Senator Inouye, did you have any opening comment before we proceed with Lieutenant Governor Hisa?

STATEMENT OF HON. DANIEL K. INOUYE, U.S. SENATOR FROM

HAWAII, VICE CHAIRMAN, COMMITTEE ON INDIAN AFFAIRS

Senator INOUYE. Yes; I am sorry that I am late. But as you

know, we are having our appropriations conference now, trying to

resolve our differences before we end the session. Mr. Chairman,

as we undertake the second hearing on the lobbying practices, I

would just like to observe that in the 27 years I have served on this

committee, I do not believe we have had before us such a sad and

sickening set of circumstances. And I hope, Mr. Chairman, that we

will be able to reach a resolution of the matters as soon as possible

and that this may never happen again.

Thank you.

The CHAIRMAN. Thank you.

Lieutenant Governor Hisa, would you like to proceed?

STATEMENT OF CARLOS HISA, LIEUTENANT GOVERNOR,

YSLETA DEL SUR PUEBLO

Mr. HISA. Yes; Mr. Chairman, Mr. Vice Chairman, and members

of the committee. My name is Carlos Hisa. I am the Lt. Gov. for

the Ysleta del Sur Pueblo, a federally recognized Indian tribe located in El Paso County, TX.

The Pueblo was initially contacted regarding Jack Abramoff by

Bryant Rogers, an attorney in Santa Fe, NM, who indicated that

Jack Abramoff was a prominent Washington lobbyist who had

helped a number of Indian tribes. Attached under tab 1 is a memorandum from Norman Gordon, one of our tribal attorneys, to Tom

Diamond regarding a conversation with Bryant Rogers.

As a result of this contact, we authorized Marc Schwartz, our

public relations representative, to contact Jack Abramoff regarding

a possible proposal, which Mr. Schwartz did. Mr. Schwartz indicated that Jack Abramoff was a prominent lobbyist and worked for

one of the largest law firms in Washington, DC. He was identified

in various national magazines and newspapers as one of the top

lobbyists in Washington, DC, who had helped several Indian tribes

in legislative matters.

Jack Abramoff and Mike Scanlon came to El Paso in early February 2002 and met with Governor Albert Alvidrez, Marc Schwartz,

and tribal attorney Tom Diamond, and made a proposal for a lobbying effort to gain Federal legislation allowing the tribe to resume

gaming requiring an extensive lobbying effort by Scanlon/Gould Associates and Jack Abramoff.
232

On February 18, 2002, Jack Abramoff sent an e-mail to Marc

Schwartz, tribal representative, that set forth the services he proposed to provide to the tribe and a copy of the Scanlon/Gould Operation Open Doors proposal. Attached under tab 2 is a copy of the

e-mail and the enclosure. Mr. Abramoff represented that the legislative effort would not succeed without the implementation of Operation Open Doors and the required data base to be developed by

Scanlon/Gould.

On February 22, 2002, Jack Abramoff appeared before the tribal

council in El Paso, TX and made a verbal presentation of the proposal outlined in the February 18, 2002 e-mail and the Operation

Open Doors document. Subsequent to that meeting, later that day,

the tribal council made a counter-proposal to Abramoff lowering

the Abramoff-Scanlon/Gould proposal by $1.5 million, offering a

total compensation package of $4.2 million. Marc Schwartz was directed to communicate this to Abramoff, and did so. Abramoff accepted the tribe’s counter-offer.

Mike Scanlon provided a memorandum of agreement which was

executed by the tribe on March 5, 2002. Attached under tab 3 is

a copy of the memorandum of agreement.

Subsequent to the signing of the memorandum of agreement, the

tribal council directed Marc Schwartz, tribal representative, to be

the direct contact with Abramoff and Scanlon/Gould regarding the

Operation Open Doors project. The tribe provided all information

requested of Scanlon/Gould and Abramoff for the creation of the

data base required for Operation Open Doors and provided all cash

disbursements required for the political contributions and other expenses required by Operation Open Doors.

From April 2002 through the summer, numerous oral representations were made by Jack Abramoff and Mike Scanlon with regard

to the progress of the project. So specifically, they identified a number of bills what the language modifying the Restoration Act, which

would allow the tribe to resume gaming, were moving and the bill

language would be able to be slipped into those bills.

Late spring and early summer of 2002, Abramoff and Scanlon

identified the Election Reform Bill as the bill that would contain

the amendment to the Restoration Act language that would allow

the tribe to resume gaming. Marc Schwartz, tribal representative,

received a number of e-mails and verbal communications from

Abramoff and Scanlon that the progress of the bill was a little

slower than had been anticipated, but was moving forward and was

expected to fall into place in late summer.

During this period of time, the tribe made numerous requests

through its representative Marc Schwartz to Abramoff and Scanlon

regarding the data base and the progress of the Open Doors

project. We were told that the progress of the bill had slowed down,

but that everything was still in place on numerous occasions

throughout the summer of 2002. In October 2002, we were informed by Abramoff and Scanlon through Marc Schwartz that the

language amending the Restoration Act, which would allow the

tribe to resume gaming, was taken out of the Election Reform Bill.

After the Election Reform Bill passed at the end of 2002, without

the language amending the Restoration Act, which would have allowed the tribe to resume gaming, Abramoff and Scanlon continued
233

to make representations that there were other bills that would be

available to place the necessary language amending the Restoration Act into, and they expected to still successfully complete Operation Open Doors.

Tribal representatives met with Jack Abramoff and Michael

Scanlon in January 2003 where a similar representation was repeated. Additionally, the tribal representatives for the first time

were able to see the data base that had been purportedly created

to complete Operation Open Doors.

Subsequent to the disclosure in the Washington Post of the Senate committee investigations into alleged improprieties and misconduct by Jack Abramoff and Mike Scanlon, the tribe has examined all its documents, correspondence and spoken with key tribal

representatives, officials and employees involved to determine

whether or not services promised to be performed by Scanlon and

Abramoff were ever performed.

After a lengthy investigation, it does not appear at this time that

the date base was ever used in the manner represented in any way

to benefit the tribe, and there was never any success by Abramoff

or Scanlon in placing any language amending the Restoration Act

into any bill that was considered by Congress. More specifically,

Jack Abramoff and Scanlon/Gould Associates failed to provide the

following as they had promised.

No. 1, they failed to make contact with key suppliers and vendors

as outlined in Operation Open Doors, whether by personal contact,

phone calls or written communications.

No. 2, they failed to provide suppliers and vendors with letters

to send to their legislative representatives.

No. 3, they failed to provide a phone bank operation for large

suppliers and vendors.

No. 4, they failed to generate 375,000 contacts as set forth in Operation Open Doors.

No. 5, they failed to complete a program in the time promised.

No. 6, they failed to have employees of vendors and suppliers

write and call in to targeted legislative districts.

In fact, the data base was essentially a compilation of the tribe’s

supplier, vendor and customer lists, which were provided to Scanlon/Gould and Jack Abramoff. It appears that Scanlon/Gould did

nothing more with respect to the creation of the data base than rearrange the list provided to them by the tribe.

It now appears that Abramoff and Scanlon, under cover of various religious groups, worked behind the scenes to shut down the

operation of the tribe’s casino and then came to El Paso, and with

false promises said to the tribe that they could get the casino reopened through Operation Open Doors, undoing the wrong they

had secretly helped cause, so they could cheat us out of our money.

We ask that you do the following: Punish the people who cheated

us; help us recover the money we were cheated out of; and pass

laws to protect all Americans from corrupt political activity.

On behalf of my tribe, the Ysleta del Sur Pueblo, I want to thank

the committee for its critical work in investigating and remedying

the wrong perpetrated by Jack Abramoff and Michael Scanlon on

my tribe and on other Native American tribes. Thank you.

[Prepared statement of Lt. Gov. Hisa appears in appendix.]
234

The CHAIRMAN. Thank you. I am going to ask some questions,

then yield to my colleagues. I read your testimony, and on the last

page, as you mentioned, you had asked us to punish the people

who cheated you. One of the reasons this committee has moved a

little bit slowly is that there is an ongoing investigation by the Justice Department. It has yet to be determined what they will come

up with, but I have a hunch that’s going to be done, very frankly.

Second, to help you recover the money, that’s probably going to

be something you’ll have to take up in the civil courts, to try to get

your money back. And I hope you do that, very frankly. And third,

to pass laws to protect all Americans from corrupt political activity,

we’ve already got them on the books. Passing the laws and getting

them implemented, there’s always a loophole somewhere or a way

to get around them if a person is larcenous in nature, very simply.

So we hope that the ones we already have on the books are going

to be enough to do the job.

In any event, let me ask a couple of questions of each of you before I yield to my colleagues. Mr. Schwartz, thank you, and by the

way, thank you both for cooperating with this investigation. I know

sometimes it’s a little embarrassing or difficult to come before a

committee, in front of the cameras and newspaper people and so

on, and admit, that very frankly, you got skinned. That’s not an

easy thing to do.

I’d like to ask you a couple of questions about it. Was this the

first time the tribe has dealt with a high-powered Washington

firm? Maybe Mr. Schwartz could answer that.

Mr. SCHWARTZ. This had been the first time that the tribe—yes,

Senator, it had been the first time.

The CHAIRMAN. Good. Well, I hope, very frankly, there’s a lot of

them, look in the yellow pages, and you’ll find pages and pages of

people who represent different entities in America. I would hope

you understand that this is not a norm in my view, for most people

that are back here representing their clients and different things.

It’s just something that happened, that went terribly wrong.

On February 18, I think we have it, in fact exhibit 16, it was either up there a minute ago where it is now, Jack Abramoff proposed his lobbying work for the Tiguas would be done on a pro

bono basis. Did you take that to mean that that was a normal process by which firms dealt with tribe here, that they would do things

on a pro bono basis? In fact, they do, but the glitch here of course

was, it was at least implied, we do it on a pro bono basis, and then

you ante up with $125,000 to $175,000 per month after we get it

done. Did you take it to—did you believe at the time that was a

normal kind of thing that’s done?

Mr. SCHWARTZ. No, Senator; we did not think it was a normal

situation.

The CHAIRMAN. Did you think that when he proposed that that

would have been a fair exchange, or did it strike you as a quid pro

quo arrangement?

Mr. SCHWARTZ. Absolutely, based on his discussions with us privately in telephone calls and then in front of the council that there

would be a payoff, so to speak, for the firm, once the casino was

opened. So yes, it certainly would have been a quid pro quo.
235

The CHAIRMAN. Mr. Hisa, these activities were particularly offensive to me, what was called the Elderly Legacy Program. Being Native American yourself, how did you react to that, when you found

out they were going to pay for the lobbying efforts with a scheme

that would take out life insurance policies on your tribal elders?

Mr. HISA. I felt uncomfortable. It didn’t seem right.

The CHAIRMAN. And it was rejected by the tribe, too, is that correct?

Mr. HISA. It was approved initially, but the tribal council got together outside the meeting and we discussed it for 1 or 2 weeks,

and then we just decided not to move forward on it anymore.

The CHAIRMAN. We have exhibit 58, can we put that back up

here if we have it? Exhibit 58 is the e-mail from Mr. Abramoff outlining the Elderly Legacy Program, in which he said the scheme

provided the opportunity to provide lobbying funds via this insurance program. Obviously if tribal members died, that would pay for

his efforts. He also said in there that it would mean the whole

world to me if the tribe would accept this.

It seems to me that he got a real two-fer. First of all, this arrangement would benefit the school that he supported, the private

charity that he supported, and also it would pay Greenberg Traurig

for their fees and out of pocket costs for Washington representation. Mr. Schwartz, was your reaction to that as cynical as mine

is if I had heard it for the first time?

Mr. SCHWARTZ. It was certainly extremely a morbid subject.

The CHAIRMAN. The word morbid fits pretty well, I think.

Mr. SCHWARTZ. The context was that he was searching for a way

to expand his ability to serve the tribe without, in his mind, draining any of the precious resources of the tribe.

The CHAIRMAN. Did he represent to the tribe that it was a normal or legal kind of arrangement that was often done?

Mr. SCHWARTZ. My recollection, Senator, was that his representation of it was that it was a brand new deal.

The CHAIRMAN. It sure was.

Mr. SCHWARTZ. One that his firm had just developed and it was

a great concept.

The CHAIRMAN. Sure was. I’d like to yield to Senator Inouye for

questions.

Senator INOUYE. I just have a few.

At your first meeting, and I am calling on Mr. Schwartz, did you

have anything to lead you to believe that you were dealing with

fast talking Washington con men?

Mr. SCHWARTZ. No, Senator; and thank you for the question. At

the time that Mr. Abramoff made the initial contact with us, and

it had come through the tribal attorneys, we had done an internet

search, just as kind of a cursory effort, to see who he was, never

having heard his name.

At that time, there had been a series of stories, both in the New

York Times and the Wall Street Journal, kind of at that very moment, where he was described as the uber lobbyist of Washington.

So it was not something that really, his credentials appeared to be

extremely legitimate. Obviously the law firm that he represented,

is employed by, was certainly one of the top law firms in the area

and certainly up and down the east coast.
236

Senator INOUYE. When did you begin to doubt his credibility, integrity and character?

Mr. SCHWARTZ. In all honesty, Senator, I think that probably

came after he told us that nobody would ever find out about the

Tiguas this year.

Senator INOUYE. But you continued to deal with him?

Mr. SCHWARTZ. We didn’t have a lot of contact with him last

year, and the articles came out in February of this year. So it was

shortly after that when he suggested that there was nothing to the

articles, that it was certainly more of a witch hunt that a reporter

had done, and the suggestion that there would be hearings was

nothing more than political payback.

Senator INOUYE. But up until then, you believed in him?

Mr. SCHWARTZ. We had no reason at that point not to, yes, sir.

Senator INOUYE. Thank you very much.

The CHAIRMAN. One more thing before I yield to Senator McCain.

To Mr. Hisa, what was the economic and social cost of that closure?

Mr. HISA. It was a great impact, not only to the tribe, but to the

El Paso community.

The CHAIRMAN. Because there were a number of non-Indians

working for the tribe, I would assume, as with most casinos?

Mr. HISA. Exactly, yes.

The CHAIRMAN. Did the tribe’s reaction, by and large, did you get

most of it from the seniors? Did they find out that this proposal

had been made that they take out life insurance policies on them?

Mr. HISA. Yes; it was. We have an elder center, and I had gone

and talked to the elder center and sort of mentioned the idea before, because Jack Abramoff wanted to send an insurance representative to sign them up. So I met with the elders before and

I told them I didn’t feel comfortable with the idea, but it was something new, and to see how they felt. And their reaction to it was,

they didn’t want it. So that’s when I reported back to Marc

Schwartz and said, you know what, not a good idea. I have talked

to the council members and they agree, so just tell Jack that it’s

not going to fly.

The CHAIRMAN. I’m glad he didn’t send an undertaker to start

taking measurements, very frankly. I was just horrified when I

found out about it.

Senator McCain.

Senator MCCAIN. Thank you, Mr. Chairman.

I noticed, Governor Hisa, that your tribe has been very generous

in its campaign contributions, to the tune, at least, of $300,000 at

least in one batch. Is that correct?

Mr. HISA. Yes.

Senator MCCAIN. Are tribal members familiar with the Rely On

Your Beliefs Funds, or perhaps the Missouri Millennium Fund, or

Restore America PAC or Friends of the Big Sky? The Superior California Federal Leadership Fund? It looks to me like your tribe has

great political interest throughout America.

Mr. HISA. Those contributions were recommended by Jack

Abramoff. According to his statement, he needed to give his money

to these compacts. He called it hard money and soft money to generate the support to get our bill passed.
237

The CHAIRMAN. If the Senator would yield a moment, I hadn’t

seen that list, but as Senator McCain read some of the names of

those things, it’s like the Association of God-Fearing Citizens.

Who’s that? Did some of these names ring a bell, or did you ask,

who are these people that we’re being asked to contribute to?

Mr. HISA. No; I never asked.

The CHAIRMAN. You took Abramoff’s word at face value that it

was something good?

Mr. HISA. Yes.

Senator MCCAIN. I’ll move on. But this was, there were several

requests made of the tribe, right, for additional funds throughout

the campaign cycles, is that right?

Mr. SCHWARTZ. Yes, sir; Senator, there were additional requests

that were made after. The list that you were referring to was given

to the tribe at the moment that Mr. Abramoff made his presentation. Those checks were required by Mr. Abramoff, directed that

the Tribe do those immediately. So there was not a lot of time.

But the requests from him for additional contributions continued

throughout the process.

Senator MCCAIN. Not a lot of time for you to investigate the

Friends of the Big Sky or the Rely On Your Beliefs Fund and others, I guess.

Anyway, in January 2003, after the bill was signed, you came to

Washington to meet with Mr. Scanlon. Mr. Schwartz, were you and

the Governor together on that?

Mr. SCHWARTZ. Yes, sir.

Senator MCCAIN. What did Mr. Scanlon say to you at that time,

when you met with him after the bill was signed into law without

the provision for your tribe? What did he say?

Mr. SCHWARTZ. Well, and certainly with due respect to Senator

Dodd, there was a tremendous amount of wringing of hands and

blaming going around, mainly at the feet of Senator Dodd. It was

not easy, of course, to try and contact him to determine what his

feelings were. Obviously had we done that, we could have discovered that much sooner.

Senator MCCAIN. What is your recollection, Governor Hisa?

Mr. HISA. The same as Marc is stating. He also said that he was

still committed to get this language inserted into another bill, that

the effort had not died, it was just a battle lost in the war. But we

will move forward on it.

Senator MCCAIN. Did he mention he would need more money for

that effort?

Mr. HISA. He did mention it at the time, that if we were to use,

to request the usage of the data base once again that there would

be an extra charge.

Senator MCCAIN. Did Mr. Scanlon ever say why Senator Dodd

was so disappointing?

Mr. SCHWARTZ. The position of it, Senator, was that, my recollection of it was that there had been an agreement between Mr.

Abramoff and Senator Dodd early in the process. Representative

Ney came on the scene somewhat later. So the concern at that

point was that Senator Dodd would not be a problem, the problem

might be more in the House than it was in the Senate.
238

So it was a shock at the end, and I certainly with all due respect

use this term, but it had been greased with Senator Dodd, so that

was not an issue. And Mr. Scanlon’s position was that they were

going to be dumping lots of information into his State.

Senator MCCAIN. What did Mr. Abramoff tell you about the need

for the Tigua Tribe to pay to the Capital Athletic Foundation?

Mr. SCHWARTZ. He had brought a proposal to us and specifically

in an e-mail referring to a request directly from Congressman Ney

wanting to take a trip to Scotland. That was in June of 2002, and

that he, during that time, the trip was going to be approximately

a $50,000 expense, and he wanted the tribe to sponsor that trip,

since Congressman Ney had asked him that.

One of the reasons that he said in many e-mails was that Congressman Ney was not doing anything else for other Indian tribes

that he represented or others that he knew of, so we were the likely target or the Tiguas were the likely target to sponsor the trip.

Senator MCCAIN. Did you have any conversation with Mr.

Abramoff after the Senate investigation was announced?

Mr. SCHWARTZ. Yes; he had called to of course, several times during that process, to let us know that there was nothing to these articles, that he was blaming it on tribal infighting between those

tribes that had been identified in the early Washington Post articles. And with respect to the Senate hearings, he had suggested

that maybe you and he had a personal issue and that that was why

you were calling for the hearings.

The CHAIRMAN. You’ve got a personal issue now, I would say.

[Laughter.]

Senator MCCAIN. Governor, I have many other questions, but my

colleagues are waiting. I just want to ask you, Governor, what’s the

impact on your tribe, on your tribal members, on the tribal council?

This must be a devastating kind of thing for you. Maybe you could

in your own words give us a few words about how the impact of

this has been on both the tribal council and you as their elected

Lieutenant Governor and the membership of the tribe.

Mr. HISA. Well, going back to the closure of the casino, that impacted the tribe significantly. Then coming back and losing another

$4.2 million that could have been used to provide more educational

opportunities for our people, health care or housing be given away,

and I don’t know if we’ll ever see it back, it has impacted the tribe

even more.

Our tribal members were disappointed, angry. They don’t blame

the tribal council. They recognize that our efforts at the time were

for the better benefit of the tribe and there was no way of us knowing that Jack Abramoff and Mike Scanlon had worked to shut us

down at the time.

So the tribe is in support. They want us to follow through and

make sure that these gentlemen do not get away with it, if gentlemen is the word. So the people are outraged, just as I was. My personal feeling, at first I was disappointed with myself. But going

back and looking at the facts, there’s no way that I could have

known that this was going on.

So I accepted that and I’m here to work with the committee and

with any investigation that’s here to make sure that these men

don’t get away with it and they don’t do it again.
239

Senator MCCAIN. Thank you, Mr. Chairman.

The CHAIRMAN. They won’t. We will be adjourning soon, but that

does not mean this issue is going to go away. I certainly would recommend to Senator McCain that some of these names that are

kind of non-descriptive, that when you take this investigation back

up next year, we might look into, or you might look into what was

the connection between Mr. Abramoff and Mr. Scanlon and some

of those groups. Was it another feeding process like it was with the

school? I’d be interested to know that when I’m back in the private

sector.

Senator Dorgan.

Senator DORGAN. Mr. Chairman, thank you very much.

Mr. Schwartz and Governor Hisa, now that you have seen the emails that have moved back and forth between Mr. Abramoff and

Mr. Scanlon and also Mr. Reed. I believe the import of your testimony is that you did not know this scheme existed, a scheme by

which Mr. Scanlon and Mr. Abramoff employed Mr. Reed, and together they worked to find ways to accelerate the shutdown of the

Tigua casino. That was done without your knowledge, is that correct?

Mr. HISA. Yes, Senator.

Senator DORGAN. Then following the order to shut down the casino, Mr. Abramoff and Mr. Scanlon both approached your tribe,

saying they would be able to help you reopen the casino?

Mr. SCHWARTZ. The initial contact was made by Mr. Abramoff in

scheduling the meeting. Once the meeting was scheduled, then he,

a day or two before the meeting was to take place, which ironically

occurred on the very day the casino was going to close, that he then

told me that Mr. Scanlon was going to be coming with him, he was

bringing an associate, and identified him as Michael Scanlon.

Senator DORGAN. Was the name Ralph Reed employed in any

way? I assume it was not employed in any way in representations

to your tribe.

Mr. SCHWARTZ. Mr. Abramoff was extremely vocal about Ralph

Reed, describing him as a friend of his, that they had come up together in various party affiliations and organizations, but that he

didn’t agree with Mr. Reed on a lot of issues, and that Mr. Reed

was in fact a friend of his of long standing. At one point, I believe

either during the first or second meeting, he acknowledged the fact

that he had received a page or an e-mail while he was with us from

Mr. Reed. But he never disclosed in any way, shape or form that

they had all been involved in some function together previous to

our issue.

Senator DORGAN. Does it surprise you to know that while he was

working with you he was paying Mr. Reed to help shut down your

casino?

Mr. SCHWARTZ. That’s probably one of the most disturbing details. Yes, it was a complete surprise.

Senator DORGAN. And do you think, based on any information

that you have, that Mr. Reed knew that he was also working with

you to achieve funding to reopen your casino?

Mr. SCHWARTZ. I don’t think I understand your question, I’m

sorry, Senator.
240

Senator DORGAN. Well, we have a partnership here, in effect.

More than $2 million was paid to Ralph Reed by Abramoff and

Scanlon, or by one or the other, perhaps both, to help accelerate efforts to shut down the casino. The e-mail trail suggests contacts

with the Texas attorney general, work with various pastors and

others and that partnership was to accelerate the closing down of

your casino, and then Mr. Abramoff and Mr. Scanlon were attempting to get money from you to open the casino backup.

My question is, does that partnership with Mr. Reed extend to

the other side, that is, the reopening of the casino?

Mr. SCHWARTZ. We were not aware of any relationship in any

discussion that he had. There was a member of the council during

one of the meetings that had asked that very question, how do you

reconcile your issues with Mr. Reed. And he said, well, we just

don’t agree, this is Mr. Abramoff saying, we just don’t agree on all

things.

So he never represented that Mr. Reed was involved with this

issue in particular, in opening the casino.

Senator DORGAN. Knowing what you now know, do you and the

Governor believe that Mr. Abramoff and Mr. Scanlon and Mr. Reed

perpetrated a fraud on your tribe?

Mr. SCHWARTZ. I can speak for myself, and I would absolutely

say that yes, it’s obvious from just the limited information we’ve

seen here today in the committee’s hearing and what we’ve seen

since then, I would say that there’s no doubt there was fraud.

Senator DORGAN. Also, there is a golfing trip to Scotland by private jet. My understanding is that our records disclose that trip includes passengers Mr. Scanlon, Mr. Abramoff, Representative Ney,

and Ralph Reed. Would that suggest to you that at least some participants knew most of what was happening here?

Mr. SCHWARTZ. Yes; absolutely, Senator.

Senator DORGAN. Let me ask you about the e-mails with respect

to that trip. In June 2002, you received an e-mail asking the Tigua

Tribe to pay for a trip to Scotland for ‘‘our friend.’’ Who did you

understand the our friend to be?

Mr. SCHWARTZ. We had a phone conversation previous to that, so

it referred to Congressman Ney.

Senator DORGAN. This e-mail also said, we did this for another

member, you know who, 2 years ago. Do you know to whom that

was referring?

Mr. SCHWARTZ. He told me in that same phone call that that was

Representative Tom DeLay.

Senator DORGAN. Let me ask a question about the meeting that

was held. My understanding from your testimony was that you

held a 2-hour meeting or at least a meeting that went on for some

while with Representative Ney in his office, is that correct?

Mr. SCHWARTZ. Yes, sir.

Senator DORGAN. What was the length of that meeting?

Mr. SCHWARTZ. It was, my recollection it was about 11⁄2 hours.

It may have been 2 hours, I’m kind of fuzzy on the time.

Senator DORGAN. Governor, were you at that meeting?

Mr. HISA. Yes; it was 11⁄2 hours to 1 hour and 45 minutes.
241

Senator DORGAN. My colleagues will recognize, that’s a very

lengthy meeting here on Capitol Hill. We have the attention span

of gnats. [Laughter.]

And we pack a lot of meetings into 1 day. I can’t remember the

day when I had a 11⁄2-hour meeting or a 2-hour meeting. So you

think it was not, this meeting was not a short meeting, you think

this meeting was well over 1 hour?

Mr. SCHWARTZ. Yes, Senator; absolutely.

Senator DORGAN. Close to 2 hours?

Mr. HISA. Yes.

Mr. SCHWARTZ. Yes, sir.

Senator DORGAN. You are confident of that?

Mr. SCHWARTZ. Yes, Senator.

Senator DORGAN. Let me ask you, what did you discuss at that

meeting with Congressman Ney? What did you discuss for a such

lengthy amount of time? That is a very long meeting.

Mr. SCHWARTZ. He was extremely animated about Mr. Abramoff

and his ability as a representative lobbyist in the city, how they

had become friends and acquainted themselves. He discussed his

district. My recollections were that he did not have access or did

not have a tremendous amount of Native Americans in his district

or reservation, I should say, in his district.

But he had tremendous sympathy for the plight that the tribe

had gone through and the issues that had occurred. He discussed

some of the political ramifications of what had occurred to the tribe

with respect to the Republicans in Texas that had done this, filed

this lawsuit and taken it to the extreme of the closure of the casino.

And then he spoke for a period, explaining to the tribal council

representatives that were there the process by which a conference

committee report is done and how this would work and what work

remained, etc. Then he took the Lieutenant Governor and the council member on a tour of his hearing room.

Senator DORGAN. So he was giving you assurances that he was

on board, he was working to solve this problem for you?

Mr. SCHWARTZ. Absolutely, Senator.

Senator DORGAN. And Mr. Abramoff and Mr. Scanlon were both

at that meeting?

Mr. SCHWARTZ. Mr. Scanlon was not.

Senator DORGAN. Just Mr. Abramoff?

Mr. SCHWARTZ. Yes.

Senator DORGAN. So now you know that accompanying you at

that meeting, to try to find a way to open your casino, was a man

who actively worked with Mr. Scanlon and Ralph Reed to close

your casino.

Mr. SCHWARTZ. Yes, sir.

Senator DORGAN. My colleague, Senator Campbell, just made a

point that I think is really important. These records, these memoranda that we have, move in all kinds of directions. And I don’t

know all the facts. All I know is what you’re telling us, and I for

one thank you for being here. It’s likely not easy for you to come

here and testify, because first of all, these folks showed great disrespect for you in their communications with each other. I’m talking about all of them that I’ve mentioned, great disrespect. It ap-
242

pears to me you were defrauded, and I know it’s not easy to come

to talk about this.

But in order for this committee to put together the pieces of this

puzzle and understand what happened, who did it, how did they

do it and what should the ramifications of that be and how do we

prevent this from happening again, we need all this information.

But as Senator Campbell pointed out, although he’s not going to be

with us when we reconvene, that this moves in many directions

and we ought to follow it to understand it completely.

And let me just say that Senator Campbell and Senator Inouye

have been extraordinary leaders on this committee for a long, long

while. Senator Inouye wasn’t here when I spoke of Senator Campbell’s service, but Senator Inouye will now remain on the committee but move on as Ranking Member of the Commerce Committee.

Senator McCain, I know, with his leadership, and I certainly with

my involvement and I’m sure with Senator Conrad’s involvement

and others, will intend to pursue the kinds of things that Senator

Campbell mentioned.

Let me thank both of you for being here today.

The CHAIRMAN. Senator Conrad.

Senator CONRAD. Thank you, Mr. Chairman.

I’d like to ask Governor Hisa, how much money did you pay to

Mr. Scanlon?

Mr. HISA. $4.2 million.

Senator CONRAD. How much money did you pay to Mr. Abramoff?

Mr. HISA. Zero. We have not paid him 1 cent.

Senator CONRAD. You didn’t pay any money to Mr. Abramoff.

What was your understanding of how Mr. Abramoff would be compensated?

Mr. HISA. After the casino would open, he would help us, through

the law firm, get a compact through the State for class III gaming.

Senator CONRAD. So he would be paid in a future time?

Mr. HISA. Yes, sir.

Senator CONRAD. Did you have any understanding that Mr.

Scanlon would be paying Mr. Abramoff?

Mr. HISA. No.

Senator CONRAD. Did Mr. Scanlon ever suggest that he had special influence here in Washington, DC as a reason to pay him that

much money?

Mr. HISA. Yes.

Senator CONRAD. In what way did he indicate that he had special

influence?

Mr. HISA. He used to work, I believe, with Tom DeLay.

Senator CONRAD. Did he say that to you?

Mr. HISA. Yes; he did.

Senator CONRAD. What representation did he make as to what

special influence he might have with Mr. DeLay?

Mr. HISA. That’s all he said, that he had special interest and that

he would try to convince him to work to our benefit, try to get us

open. And others as well, and using Tom DeLay’s credibility to contact and get to other representatives.

Senator CONRAD. Did he indicate that he had special influence

with anyone else?

Mr. HISA. No.
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Senator CONRAD. Did Mr. Abramoff ever suggest that he had special influence with anyone here in Washington, DC?

Mr. HISA. Yes.

Senator CONRAD. He did as well?

Mr. HISA. Yes, sir.

Senator CONRAD. Who did he say that he had special influence

with?

Mr. HISA. A majority of people, from Bob Ney all the way to the

President of the United States of America.

Senator CONRAD. He suggested he had special influence with the

President of the United States?

Mr. HISA. Yes; according to him, the President assigned him to

staff some of the open slots for the Department of the Interior and

such. And Jack Abramoff recommended some of the individuals

that were placed in those positions.

Senator CONRAD. Did he provide other evidence of special influence that he had with the President of the United States?

Mr. HISA. No.

Senator CONRAD. What representation did he make about special

influence that he had with Congressman Ney?

Mr. HISA. A history of working with him and that he was very

supportive of Native Americans across the Nation, not just the

Tiguas.

Senator CONRAD. When you were asked to make a contribution

to the Capital Athletic Foundation—were you asked to make a contribution to the Capital Athletic Foundation?

Mr. HISA. Yes.

Senator CONRAD. In what amount were you asked to make a contribution?

Mr. HISA. 50,000.

Senator CONRAD. $50,000?

Mr. HISA. Yes.

Senator CONRAD. What reason was given to you for making a

contribution in that amount?

Mr. HISA. Ney was going to a golfing trip, and there were other

individuals from Congress going along and Bob Ney needed this

trip to bring some of these individuals on board.

Senator CONRAD. Did that strike you as possibly illegal?

Mr. HISA. No; Jack Abramoff said he had done it before he and

he had the foundation to justify this trip. There was a sporting

event and it was an athletic foundation of some sort, so he could

justify the trip.

Senator CONRAD. Did you ask your legal counsel whether such a

contribution might be illegal?

Mr. HISA. No; I did not.

Senator CONRAD. Did you know that Ralph Reed was going to go

on that private charter for this golf outing as well?

Mr. HISA. No.

Senator CONRAD. Did you know that Ralph Reed was leading the

effort in Texas to close your casino?

Mr. HISA. Yes.

Senator CONRAD. Did you know that Mr. Scanlon was providing

money to Mr. Reed for that effort?

Mr. HISA. No.
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Senator CONRAD. When did you find out that Mr. Scanlon was

providing money to Mr. Reed to close the casino which he then

promised to try to get reopened?

Mr. HISA. When we started working with the investigation committee and the e-mails were provided to us.

Senator CONRAD. Do you recall when that was?

Mr. HISA. Earlier this year, I would say May of this year, March,

around that time.

Senator CONRAD. March to May of this year. What was your reaction when you learned that you had paid for a golf outing for the

man who had worked to close your casino?

Mr. HISA. Outrage. A rattlesnake will warn you before it strikes.

We had no warning. They did everything behind our back.

Senator CONRAD. Mr. Schwartz, you said, you quoted someone,

and I jotted down that you indicated that Abramoff said to you, no

one would find out about the Tiguas this year. Was that Mr.

Abramoff?

Mr. SCHWARTZ. Yes, Senator; that was after the initial articles

had come out in the Washington Post, and he said, you know, it

was political in nature, mainly involving Senator McCain, so no

one would know about Tigua, was his statement.

Senator CONRAD. That no one would know about the Tiguas this

year. That is very unclear to me, why he would have made such

a statement.

Mr. SCHWARTZ. The context of it, Senator, is that he was in discussions that I had with him at that time over these articles, and

whether or not the allegations were correct. One of the concerns

that he had was that the secrecy of his representation of the tribe,

you know, would be blown by this. So I said to him, simply whether

or not there was going to be disclosure, and that was the context

by which he said no one will know about Tigua.

Senator CONRAD. This year.

Mr. SCHWARTZ. When I said that, that conversation took place

this year.

Senator CONRAD. I see. So there wasn’t a timeframe on that?

Mr. SCHWARTZ. No, sir; and I apologize for the misunderstanding.

Senator CONRAD. So he was saying to you no one would find out

about the Tiguas maybe forever?

Mr. SCHWARTZ. Correct. That was his inclination.

Senator CONRAD. What led him to that belief? Did he indicate a

reason why no one would find out?

Mr. SCHWARTZ. He had stated that his, he was in a discussion

or a beginning of a battle with his law firm, former employer, who

represented him, was his ‘‘lawyers.’’ So there was an attorney-client

privilege, he felt, so there would not be certain disclosures regarding what had happened with the tribe. In the legislative effort, not

the fraud. We were still not clued in on the fraud at that point.

Senator CONRAD. Did Mr. Scanlon ever indicate to you that he

had special influence here in Washington, DC?

Mr. SCHWARTZ. Oh, absolutely.

Senator CONRAD. What was the nature of the special influence

that he had?

Mr. SCHWARTZ. He had established himself through his involvement as Representative DeLay’s former press secretary, I believe,
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and regular kind of go-to guy that he had entrees into certain

areas, and certainly with the Republican Party and the Republican

National Committee.

Senator CONRAD. With the Republican National Committee?

Mr. SCHWARTZ. Yes, sir.

Senator CONRAD. That he had special influence with the Republican National Committee and the Republican House leadership?

Mr. SCHWARTZ. Yes, sir.

Senator CONRAD. Did he provide evidence to you of that special

relationship or that special influence?

Mr. SCHWARTZ. No, sir; those discussions, he was, so that we’re

properly in context, his responsibility was to create this wonderful

program. So from that standpoint, there wasn’t a lot of, how should

I say, with respect to the e-mails, chit-chat time. It was needed to

get to work and get this done.

Senator CONRAD. How about Mr. Abramoff? Did he make representations to you that he had special influence here in Washington, DC?

Mr. SCHWARTZ. Absolutely.

Senator CONRAD. What was the nature of the special influence

that he enjoyed here, according to him?

Mr. SCHWARTZ. As the Lieutenant Governor has said, he had spoken quite highly of his association with President Bush’s transition

team back in 2000, where he had led the, been involved with the

selection of various individuals at the Bureau of Indian Affairs,

close friendship with the President, with Carl Rove. During a visit

to his office, there was of course all those general pictures that you

see, with arms around each other, with the House leadership mainly, certainly on the Republican side.

And at the time, because of the leadership in the Senate being

in the Democratic side, the majority side, he was, he had a special

relationship with Senator Lott.

Senator CONRAD. Did he have a special relationship with all

those people?

Mr. SCHWARTZ. There were others whose names escape me at

this point. I apologize to all those, I don’t mean to diminish their

importance. But he was the individual.

Senator CONRAD. At any time did you feel, or at what point if

you did begin to feel that Mr. Scanlon and Mr. Abramoff were taking advantage of the tribe?

Mr. SCHWARTZ. Senator, I have thought about that since the first

time I was contacted by the committee. I think there was certainly

a part early this year that led me to believe that there might be

some issue with them. I had a phone call with Mr. Scanlon shortly

after the news report came out.

Senator CONRAD. Which news report?

Mr. SCHWARTZ. The first article where it disclosed, I believe it

was the Washington Post, that disclosed, it was in February I

think, of this year. I had a phone call with Mr. Scanlon and there

were some things that he said that in hindsight might have been

the first crack, so to speak, in the scheme, the first opportunity to

see through it, I think as I look back. They were just references

that he made to, we’ll certainly have to stand down for a little

while, this may not blow over.
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And you would assume that somebody who had been simply maligned in a newspaper article would not be so concerned about the

ramifications long term of that article. I think in retrospect, in

looking back, hindsight, that may have been the first time that I

suspect that there might be something untoward.

Senator CONRAD. Let me ask you this, and I’m right at the end,

Mr. Chairman.

But I have a copy of an e-mail that you received, I think all

members of the Committee, I’m sure all members of the committee

do, from Mr. Abramoff dated February 25, 2002, responding to

some newspaper articles that you sent via e-mail on the situation

with the casino. His reply to your message stated, and I quote:

If this came out of your office, please tell them never.

In capital letters.

Never to include my name on a list like this. Our presence in this deal must be

secret, as we discussed. Please call me so we can discuss a spin on this, since some

of the people on this list are real dangerous, knowing I am involved.

This occurred in February 2002. Didn’t it strike you that there

is something wrong when Mr. Abramoff is telling you the relationship has got to be secret?

Mr. SCHWARTZ. Thank you for the question. No, it did not strike

me as anything necessarily wrong, and let me share with you why.

We throughout the entire process, we had looked into obviously the

Greenberg firm, and they were well known, highly regarded and

highly respected, Mr. Abramoff certainly, being referred to in various publications as one of the top lobbyists.

We had had communication directly with his office and his office

staff at that point. We had spoken to various members of the firm,

other than Mr. Abramoff. So there was, if there was an issue, we

would have assumed that this might, I think in your context, if it

had been quiet and our conversations only involved directly to Mr.

Abramoff and back and there was no other involvement, then I

could see where that could be drawn.

But in this case, there was multiple contacts with his staff with

various other lawyers at Greenberg Traurig and at early dates. So

the concept that we felt like, that certainly the law firm had approved it, knew about it and he was involved with it. So the secrecy

angle, if that’s what was necessary for the terrible hardship that

the Tribe was going through through its closed casino to be rectified, it was certainly a price that I was willing to pay at the time.

Senator CONRAD. Over what period of time did you pay $4.2 million to Mr. Scanlon? Over how long a period?

Mr. HISA. All in 2001, from 2002—I’m sorry.

Senator CONRAD. All in 2002?

Mr. HISA. March through I’d say June. It was three invoices sent,

I believe each one was divided in thirds and that’s the way we paid

it. When Scanlon would bill us, we would send a payment.

Senator CONRAD. In a 3-month period, you paid $4.2 million?

Mr. HISA. Yes; I believe so. Yes.

Senator CONRAD. Didn’t that strike you as wildly exorbitant?

Mr. HISA. No.

Senator CONRAD. Why not? Had you ever paid any other firm

money of that—in those amounts?
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Mr. HISA. We had not paid a firm, we paid Michael Scanlon’s

company. But it was presented to us that this money needed to be

paid so that our effort could move. When Operation Open Doors

was presented to us, there was a timeline that by, I believe midJuly that the bill would pass and we would be back in operations.

That’s why everything needed to move so fast.

Senator CONRAD. How much money were you losing a month because the casino was closed?

Mr. HISA. That year, a month, I don’t have those numbers with

me. But it was a great amount of money.

Senator CONRAD. Can you give us some ballpark estimate?

Mr. HISA. I believe for the year 2002, after the casino closed, we

still tried to keep some people employed. And after this effort was

presented to us and we were going to open, we were going to have

a second layoff, but we decided to keep the people employed. The

reason that we were convinced we hoped that the casino would

open, we kept these people employed. A number of, I believe $2

million, was lost that year.

Senator CONRAD. I thank the witnesses.

The CHAIRMAN. I have one more before we move on to Mr. Scanlon.

Senator CONRAD. Go ahead, sir.

Mr. HISA. Senator, for the record, the golf trip, the tribe did not fund the $50,000.

Mr. SCHWARTZ. It was just requested of them.

Mr. HISA. Yes; it was requested.

Senator CONRAD. I see. You didn’t provide the money.

Mr. HISA. Yes.

Senator MCCAIN. Mr. Schwartz, I just have one additional question.

After the Washington Post article came out, Mr. Abramoff contacted you?

Mr. SCHWARTZ. Yes, sir.

Senator MCCAIN. What was the conversation?

Mr. SCHWARTZ. He of course wanted to know if I had seen the

article, and I told him that I had.

Senator MCCAIN. And then he went on to discuss with you about

cooperation or non-cooperation with the committee?

Mr. SCHWARTZ. Senator, that came prior, that came after, I believe, the second article came out. And the question was at that

point internally, in meetings with the tribe, it was decided that we

would obviously wait and sit back and we were not going to have

any more contact with him.

At that point he had said that if the tribe was contacted by members of investigative counsel for this committee or others that I believe his words were, they didn’t have to cooperate. They didn’t

have to say anything. And he subsequently sent me an e-mail with

his attorneys and asked that I forward that directly to the tribal

attorneys so that if they were contacted they would at least call his

lawyers before speaking with committee counsel or other investigators.

Senator MCCAIN. So just to clarify for the record, when he said

they don’t have to talk to the committee investigators or the committee, they were referring to tribal council?
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Mr. SCHWARTZ. He was referring to the tribe. He was asserting,

I would assume what he was attempting to do was assert or have

the tribe assert some sort of sovereignty.

Senator MCCAIN. Thank you, Mr. Chairman.

The CHAIRMAN. One last question. Did I understand you, Mr.

Schwartz, to say that Mr. Scanlon contracted with the tribe to create a data base?

Mr. SCHWARTZ. Yes, sir.

The CHAIRMAN. Do you have that?

Mr. SCHWARTZ. Well, a massive, and there were several components to the program, the data base being one of these key customized.

The CHAIRMAN. Did he do that? Do you have that?

Mr. SCHWARTZ. We have seen one this year that was sent to the

tribe at our request. And so it is, Senator, it is a data base.

Senator CONRAD. Mr. Chairman, might I ask one other question

that has come up as a result of the answers? Governor Hisa, you

just testified that the tribe, your tribe, did not pay for the golf outing. You were requested to pay for it, but you did not pay for it.

Mr. HISA. Yes.

Senator CONRAD. Do you know who did pay for it?

Mr. HISA. I think in total the golfing trip was going to be $100,000, my understanding is that the Mississippi Choctaw paid

$50,000 and the Alabama Couchata paid another $50,000.

Senator CONRAD. Thank you.

The CHAIRMAN. Thank you. We appreciate your being here. The

committee may have further questions, and they may submit them

in writing, and if they do, we’d appreciate your response to it.

Mr. SCHWARTZ. Thank you very much.

The CHAIRMAN. Thank you once again.

Mr. HISA. Thank you.

The CHAIRMAN. The committee will now move to Mr. Michael

Scanlon, if he would come forward.

Mr. Scanlon, if you would remain standing for 1 moment. Mr.

Scanlon, do you swear to tell the truth, the whole truth and nothing but the truth, so help you, God?

Mr. SCANLON. I do.

The CHAIRMAN. Please be seated.

I would also remind you, you have counsel with you, I assume

the two people that are with you?

Mr. SCANLON. Yes, sir.

The CHAIRMAN. I would remind you that they are free to speak

to you at any time but not free to speak to any member of the committee unless the committee asks them a specific question.

Mr. SCANLON. Certainly.

The CHAIRMAN. If you would like to proceed with a statement.

Mr. SCANLON. No, sir; no, Senator.

The CHAIRMAN. You have no statement?

Mr. SCANLON. No, Senator.

The CHAIRMAN. Well, then, we’ll just proceed with some questions. And we’ll take turns with the questions, too.

Mr. Scanlon, let me read a couple of e-mail exchanges between

you and Mr. Abramoff that have been presented to us. The day before Mr. Abramoff arranged for a presentation to the Tigua Tribe,
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he told you to ‘‘fire up the jet, baby, we’re going to El Paso.’’ You

responded by telling him, ‘‘I want all their money.’’ Whose money

were you referring to?

Mr. SCANLON. Unfortunately, Senator, upon the advice of counsel, I must decline that question based upon my rights under the

Fifth Amendment.

The CHAIRMAN. When Mr. Schwartz raised some issues with Mr.

Abramoff, your response was, let me apologize, as Senator McCain

did about the language, ‘‘Is he happy? Where’s our f-ing money?’’

And then in the same e-mail exchange, you told Mr. Abramoff,

‘‘The check came in and was way short, about $900,000 short.’’ Was

that the Tigua money you were referring to?

Mr. SCANLON. Upon the advice of counsel, I must decline to answer that question based upon my rights under the Fifth Amendment.

The CHAIRMAN. Mr. Scanlon, Mr. Abramoff spoke often of his affection for his Indian clients, even though he used some very derogatory terms for them. Do you share that same kind of affection that

he had for Indians?

Mr. SCANLON. Senator, upon advice of my counsel, I must decline

to answer that question based upon my Fifth Amendment privileges.

The CHAIRMAN. I see. And do you intend to invoke that privilege

throughout all the questioning?

Mr. SCANLON. Yes, Senator.

The CHAIRMAN. I’d like to yield to Senator McCain.

Senator MCCAIN. Mr. Scanlon, I find your behavior bizarre,

throughout this, not only incredible in the way that you treated

Native Americans but also the way you have treated this committee, refusing to come forward with us, us having to serve subpoena

and then have a U.S. Marshal spend taxpayers’ money waiting for

you so that they can deliver a subpoena.

Do you have any remorse, Mr. Scanlon, about this treatment of

these innocent people that you and your partner and perhaps others took the money that could have been used for health care, for

education, for the elderly? Do you have any remorse, Mr. Scanlon?

Mr. SCANLON. Unfortunately at this time, Senator, I must decline

to answer that question based upon my Fifth Amendment privileges. Hopefully in the future I will have an opportunity to do so.

Senator MCCAIN. No further questions, Mr. Chairman.

The CHAIRMAN. Let me ask one more before I yield to Senator

Conrad. Mr. Scanlon, in reading all the testimony, and all the emails, it strikes me that you were working both sides of the street,

if I understand this thing. You managed to not only con the tribe

but con Mr. Abramoff. And many people around here think he was

very good at doing that, too.

You were responsible for lining up political supporters to assist

the Tigua Tribe in reopening its casino. You told Mr. Abramoff and

the tribal council you had the Senate’s support. You told them, ‘‘All

the major players on the election reform package have given their

support on our issue.’’ In fact, and this is your e-mail, in fact, numerous witnesses have told the committee that nothing you told

Mr. Abramoff and the tribe about Senate support was accurate.

When Mr. Abramoff found out that you did not have the Senate’s
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support you had bragged about, he pleaded with you, in an e-mail,

‘‘please call me.’’ He later demanded that you ‘‘get our money back

from the person who was supposed to take care of arranging Senate support.’’

When did you come up with this scheme to not only con the tribe

but con your partner?

Mr. SCANLON. Upon advice of counsel, I must decline to answer

that question, based upon my rights under the Fifth Amendment.

The CHAIRMAN. I understand. I have no further questions. Senator Conrad.

Senator CONRAD. Did you receive $4.2 million from the Tigua

Tribe?

Mr. SCANLON. Upon advice of counsel, I must decline to answer

that question at this time, based upon my rights under the Fifth

Amendment.

Senator CONRAD. Did you suggest to the Tigua Tribe or their representatives that you had special influence with Congressman

DeLay here in Washington, DC?

Mr. SCANLON. Upon advice of counsel, I must decline to answer

that question, based upon my rights under the Fifth Amendment.

Senator CONRAD. Well, it’s clear that we’re going to get, as the

witness has already indicated, that answer repeatedly. I don’t understand why you can’t say if you do feel remorse that you have

that feeling here today. I don’t know how that would possibly jeopardize your legal position.

But—I don’t know. I don’t know how you go to sleep at night,

really. I would hope your conscience bothers you.

I thank the Chair.

The CHAIRMAN. Thank you. I have no further questions. But just

speaking as an enrolled member of an Indian tribe, not the chairman of this committee, I have to tell you that for 400 years people

have been cheating Indians in this country, so you’re not the first

one, Mr. Scanlon. It’s just a shame that in this enlightened day

that you have added a new dimension to a shameful legacy of

what’s happened to American Indians. You’re the problem, buddy,

of what’s happened to American Indians.

This committee is adjourned.

[Applause.]

[Whereupon, at 4:45 p.m., the committee was adjourned.]
(251)

APPENDIX

ADDITIONAL MATERIAL SUBMITTED FOR THE RECORD

PREPARED STATEMENT OF HON. BEN NIGHTHORSE CAMPBELL, U.S. SENATOR FROM

COLORADO, CHAIRMAN, SENATE COMMITTEE ON INDIAN AFFAIRS

Good afternoon, the committee will come to order. Today’s hearing is the second

in a series of hearings into allegations of improper business, lobbying and financial

transactions by Jack Abramoff, Michael Scanlon, and their various entities on behalf

of Indian tribes.

At the committee’s first hearing on September 29, the evidence and testimony

showed that under a variety of arrangements six tribes paid Mr. Scanlon more than

$66 million, and that Scanlon, in turn, paid Abramoff more than $21 million.

The September hearing also revealed that Scanlon and Abramoff assisted in the

campaigns and elections of tribal council members at two of the tribes, did not

charge for their services, and after the elections obtained multimillion dollar contracts from the same tribal councils they helped elect.

Finally, the hearing revealed that, while they were being paid tens of millions of

dollars, Abramoff and Scanlon held their tribal clients in very low regard and referred to them as ‘‘monkeys,’’ ‘‘troglodytes,’’ ‘‘morons,’’ and worse.

While the hearing in September disclosed very offensive evidence, our investigation has continued to uncover other distasteful and shocking details.

Today’s hearing will focus on the Tigua Tribe of Texas. The story of Abramoff,

Scanlon and the Tiguas looks to me like nothing short of a classic shakedown operation:

These men, working with allies, persuaded the State of Texas to force the closure

of the Tribe’s casino, located in El Paso. Having achieved this interim step of shutting down the tribe’s casino, Abramoff and Scanlon then approached the Tiguas, offering their services to assist the Tribe in reopening its casino. For their services,

they charged the Tribe the tidy sum of $4.2 million.

Documents uncovered by committee investigators shed more light on the Tiguas.

To assist the Members, as well as the general public, committee staff has prepared

those documents most pertinent to the matters covered by this hearing.

I now offer these documents and move that they be entered into the record of this

hearing.

The documents demonstrate the extent of Scanlon’s and Abramoff’s cynical manipulation of the Tigua Tribe. I’d like to discuss a few of them in detail:

In 2002, Abramoff first offered to help the Tiguas ‘‘on a pro bono basis,’’ provided

the tribe hired him in the future as lobbyist for between $125,000 and $175,000 per

month. That’s some ‘‘pro bono’’ work isn’t it?

Then, just last year, Abramoff approached the Tiguas with another scheme that

would have benefited the Eshkol Academy, the Jewish boys school he founded located just outside Washington, DC. After Mr. Abramoff declined tribal requests that

he be paid a retainer, Mr. Abramoff recommended that, at no cost to the tribe, the

Academy would buy-up term life insurance on particularly elderly tribal members,

and the Academy would be named as their death beneficiaries.
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In effect, Abramoff asked to be paid by putting prices on the lives of tribal elders.

We have witnessed a lot of unseemly and unethical, things during the course of this

investigation, but asking a Tribe to pay a lobbyist with death benefits may be the

most distasteful thing I have heard of yet.

Writing to one of his key allies in the effort to shut down the Tiguas’ casino,

Abramoff references the tribe’s donations to Democrats, saying ‘‘I wish those moronic Tiguas were smarter in their political contributions. I’d love to get our mitts

on that moolah! Oh well, stupid folks get wiped out.’’ Stupid folks get wiped out.

That about says it all, doesn’t it, about the way Mr. Abramoff and Mr. Scanlon felt

about their clients?

Finally, on the day the Tigua Tribe voted on their contract, Mr. Abramoff and Mr.

Scanlon exchanged emails regarding a newspaper story about some 450 Indian employees at the tribe’s recently shuttered casino being thrown out of work. This group

of workers included an elderly woman who worried that she would not find another

job. Mr. Scanlon was evidently excited that the article was on the front page ‘‘while

they [the Tiguas] will be voting on our plan.’’ Mr. Abramoff’s reply: ‘‘Is life great

or what!!!’’ I am not naive and have been around this town for almost a quarter

of a century, but it strikes me as more than cynical that, rather than being concerned about the misfortunes of the tribe and its members, they were soliciting for

business, Abramoff and Scanlon seemed happy almost gloating about the prospect

that the Tiguas were having their casino closed and hundreds of employees thrown

out of work, all because they were slated to make millions off the tribe.

There is another element to the Tigua story that I feel compelled to address: it

appears that Mr. Abramoff and Mr. Scanlon used the good name and reputation of

our fellow Members of Congress in their attempts to part the tribe from its money.

You will hear today from witnesses, and read from documents, indicating that Mr.

Abramoff and Mr. Scanlon contended that Senator Dodd and Congressman Ney

were enlisted to spearhead efforts in Congress to provide a legislative fix to the

Tiguas problems.

From what we know, that was not the case. Senator Dodd evidently knew nothing

about the proposed legislative fix; never supported it; and, in fact, we are told that

when the idea was proposed to his senior staff, it was rejected at least three times.

Congressman Ney agreed to support a legislative fix after being told by Mr.

Abramoff that Senator Dodd wanted the language.

In short, the evidence demonstrates that Mr. Scanlon and Mr. Abramoff told their

clients that Senator Dodd and Congressman Ney would push their proposal, knowing full well that was not the case, in an effort to further persuade the Tigua Tribe

into continuing to pay them millions of dollars.

Today the committee will hear from Carlos Hisa, the Tigua Tribe’s Lieutenant

Governor, and Mark Schwartz, a consultant who essentially was the point person

for contact between the Tiguas and Abramoff and Scanlon.

I would be remiss if I did not mention a few other, relevant, items:

Those of you who watched or listened to the September 29 hearing may recall that

the committee repeatedly sought the presence of Mr. Scanlon, and had been obliged

to issue a number of subpoenas to that effect. At first, Mr. Scanlon’s attorney declined to accept the subpoena, even though he had accepted other committee subpoenas for Mr. Scanlon and the various corporate entities he owned or operated.

At the time, I said that the U.S. Marshals had been asked to find and serve Mr.

Scanlon, and that he would surface at some point and come before the committee.

That time has come. The Marshals found Mr. Scanlon and served him, and he will

appear here today.

There is another person who has flouted the authority of this committee, and that

person is Jon Van Horne, who was served with a document subpoena that was due

on October 5. To date, the committee has not received the documents called for

under the subpoena nor an explanation for his non-compliance.

I may be leaving as chairman, but Mr. Van Horne should know that neither this

committee nor this investigation are going to end on December 31.

As was the case with Mr. Scanlon, sooner or later Mr. Van Horne will be called

to account.

PREPARED STATEMENT OF HON. CHRISTOPHER J. DODD, U.S. SENATOR FROM

CONNECTICUT

I don’t know Jack Abramoff or Mike Scanlon. So any representations they might

have made without my knowledge regarding me and efforts at recognition of the

Tigua Tribe are categorically wrong and false. They never contacted me on recognition of the Tigua Tribe and I never represented—either to them or Congressman
253

Ney—that I would in any manner work to legislatively recognize the Tigua Tribe.

Congressman Ney’s staff and Lottie Shackelford did approach my office during the

waning hours of negotiations over the HAVA legislation to inquire whether recognition provisions for the Tigua Tribe could be included in the bill. The suggestion was

summarily rejected. The fact that the HAVA bill never included any legislative language regarding this tribe should confirm that fact in no uncertain fashion.

I am particularly proud of the HAVA legislation and angry that there were those

who were seeking to use it to advance their own interests. I am also—needless to

say—angry that unbeknownst to me people were trading on my good name, especially since I have aggressively fought for years to reform the recognition process

so that the criteria at the BIA is based upon facts and not politics. I intend to continue to push for those reforms, especially since this activity clearly highlights further problems with the recognition process.

I had no involvement whatsoever in any effort to recognize this tribe. Mr.

Abramoff and his associates need to be held accountable for their duplicitous,

greedy, and underhanded actions.
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