S. HRG. 109–135, Pt. 2

TRIBAL LOBBYING MATTERS

HEARING

BEFORE THE

COMMITTEE ON INDIAN AFFAIRS

UNITED STATES SENATE

ONE HUNDRED NINTH CONGRESS

FIRST SESSION

ON

OVERSIGHT HEARING REGARDING TRIBAL LOBBYING MATTERS, ET AL

NOVEMBER 2, 2005

WASHINGTON, DC

PART 2

(
TRIBAL LOBBYING MATTERS—PART 2
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24–471 PDF 2005

S. HRG. 109–135, Pt. 2

TRIBAL LOBBYING MATTERS

HEARING

BEFORE THE

COMMITTEE ON INDIAN AFFAIRS

UNITED STATES SENATE

ONE HUNDRED NINTH CONGRESS

FIRST SESSION

ON

OVERSIGHT HEARING REGARDING TRIBAL LOBBYING MATTERS, ET AL

NOVEMBER 2, 2005

WASHINGTON, DC

PART 2

(
COMMITTEE ON INDIAN AFFAIRS

JOHN McCAIN, Arizona, Chairman

BYRON L. DORGAN, North Dakota, Vice Chairman

PETE V. DOMENICI, New Mexico

CRAIG THOMAS, Wyoming

GORDON SMITH, Oregon

LISA MURKOWSKI, Alaska

MICHAEL D. CRAPO, Idaho

RICHARD BURR, North Carolina

TOM COBURN, M.D., Oklahoma

DANIEL K. INOUYE, Hawaii

KENT CONRAD, North Dakota

DANIEL K. AKAKA, Hawaii

TIM JOHNSON, South Dakota

MARIA CANTWELL, Washington

JEANNE BUMPUS, Majority Staff Director

SARA G. GARLAND, Minority Staff Director

(II)
(III)

C O N T E N T S

Page

Statements:

Baggett, Fred, managing shareholder; chairman, National Government

Affairs Practice, Greenberg Traurig, Tallahassee, FL ............................... 20

Cathcart, Christopher, former associate, Capitol Campaign Strategies ...... 57

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

Committee on Indian Affairs ....................................................................... 6

Griles, J. Steven, former deputy secretary, Department of Interior ............ 88

Halpern, Gail, Jack Abramoff’s former tax advisor ....................................... 59

Leeper, Charlie, esq., Spriggs and Hollingsworth ......................................... 57

McCain, Hon. John, U.S. Senator from Arizona, chairman, Committee

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

McConnon, B.R., president, Democracy Data and Communications ............ 57

Rossetti, Michael, former counsel to the Secretary of the Interior, Department of the Interior ...................................................................................... 89

Sickey, David, council member, Coushatta Tribe of Louisiana .................... 13

Sickey, Kevin, chairman, Coushatta Tribe of Louisiana ............................... 10

Thomas, Hon Craig, U.S. Senator from Wyoming ......................................... 9

Van Hoof, Kathryn, former outside counsel, Coushatta Tribe of Louisiana 19

Worfel, William, former tribal council member, Coushatta Tribe of Louisiana .................................................................................................................. 17

APPENDIX

Prepared statements:

Baggett, Fred .................................................................................................... 109

Sickey, David .................................................................................................... 112

Sickey, Kevin .................................................................................................... 110

Thomas, Ronnie, chairman, Alabama-Coushatta Tribe of Texas (with attachment) ....................................................................................................... 443

Additional material submitted for the record:

Hartman, Barry M., Kirkpatrick & Lockhart Nicholson Graham LLP,

letter to Senator McCain on behalf of Steven Griles ................................. 116

Murphy, Kevin M, Carr Maloney P.C., letter to Senator Dorgan on behalf

of Gail Halpern ............................................................................................. 123

Additional e-mails ............................................................................................ 125

(1)

TRIBAL LOBBYING MATTERS

WEDNESDAY, NOVEMBER 2, 2005

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

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

Senate Hart Building, Hon. John McCain (chairman of the committee) presiding.

Present: Senators McCain, Akaka, Burr, Cantwell, Coburn,

Conrad, Crapo, Domenici, Dorgan, Inouye, Johnson, Murkowski,

Smith, and Thomas.

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

ARIZONA, CHAIRMAN, COMMITTEE ON INDIAN AFFAIRS

The CHAIRMAN. Good morning.

Last year, this committee launched its investigation into serious

allegations of misconduct levied by a number of Indian tribes

against their former lobbyist, Jack Abramoff and political consultant Michael Scanlon. The picture painted by an earlier Washington

Post article about the duo had given cause for grave concern.

Little did we know then what a complex and tangled web we

would begin to unravel. Some may have known. According to one

e-mail sent by former Abramoff associate Kevin Ring on February

22, 2004 to a colleague, ‘‘I know more than the article and the

truth is worse.’’ Indeed, the truth has proven much, much worse.

The story is alarming in its depth and breadth of potential

wrongdoing. It is breathtaking in its reach. It has spanned across

the United States, sweeping up a number of tribes, the Coushatta

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

Saginaw Chippewa Indian Tribe of Michigan, the Agua Caliente

Band in Palm Springs, the Tigua Indians of El Paso, and the Pueblo Sandia Tribe of New Mexico.

It has taken us from tribal reservations across the land to luxury

sports boxes here in town; from a sham international think tank

in Rehoboth Beach, DE, to a sniper workshop in Israel, and then

beyond. But let us not forget that the unifying threads of this entire investigation have been the astronomical fees the tribes paid

Michael Scanlon, where those fees ultimately went, and why.

Recall that between 2001 and 2004, six tribes paid more than $66 million to Michael Scanlon’s company, Capitol Campaign Strategies, and its affiliates. Remember, too, 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.
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The $66 million does not include the substantial payments made

by the tribes directly to other entities owned or controlled 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. The

$66 million only includes the payments by the tribes to Mr. Scanlon’s companies.

The revelations in the Washington Post’s February 22, 2004 article sparked many reactions. Upon its publication, Mr. Ring wrote

again to his colleague: ‘‘Now what do you think of my partner

Jack? Not too shady, huh?’’ Mr. Ring’s colleague could only reply,

‘‘That is a lot of cake.’’ It was. Mr. Abramoff and Mr. Scanlon considered the Coushatta to be the biggest slice.

In a September 10, 2001 e-mail, Mr. Abramoff asked Mr. Scanlon, ‘‘Can you let me know how much more, than the current

$660,000, we would each score should Coushatta come through for

this phase and Choctaw continue to make the transfers. I need to

assess where I am at for the school’s sake.’’ Mr. Scanlon replied,

‘‘Coushatta is an absolute cakewalk. Your cut on the project as proposed is at least $800,000.’’

All in all, Mr. Scanlon reported that Mr. Abramoff would get at that time $1.5 million on top of the $660,000, for a total of $2.1

million. Mr. Abramoff heaped praise on his partner: ‘‘How can I say

this strongly enough? You iz da man!’’ Mr. Scanlon, however, was not content with the $2.1 million. He

exhorted Mr. Abramoff in that same e-mail, ‘‘Let’s grow that $2.1

million to $5 million. We need the true ‘gimme five’.’’ ‘‘Gimme five,’’

as we learned from the last hearing, was Mr. Abramoff’s and Mr.

Scanlon’s code phrase for their alleged money-making scheme. Mr.

Abramoff and Mr. Scanlon apparently convinced the tribes to pay

grossly inflated fees to Mr. Scanlon’s companies.

How did they do this? According to Mr. Ring’s February 22, 2004

e-mail, Mr. Abramoff, ‘‘talks tribes into hiring Scanlon.’’ Ultimately,

the two men each reaped at least $21 million in profit.

Almost 6 months after the ‘‘cake walk’’ exchange, Mr. Abramoff

and Mr. Scanlon tried to achieve the true ‘‘gimme five’’ with the

Coushatta. While Mr. Scanlon was drafting a grassroots proposal

for the tribe, Mr. Abramoff guided him in a March 12, 2002 e-mail:

‘‘It is great, but don’t give the option of shaving costs. Of course,

they should do all at once, and there are no savings!!!, otherwise

we will sacrifice $2 million that they would otherwise gladly pay.’’

Mr. Abramoff and Mr. Scanlon saw the Coushatta as their

‘‘money train.’’ Mr. Abramoff summed it up in his June 2, 2002 email to Mr. Scanlon, ‘‘They are ripe for more pickings. We have to

figure out how.’’

The committee has tried to determine how expensive the money

train was. Preliminarily, the committee has determined that in less

than 3 years, the tribe paid Capital Campaign Strategies over

$26.6 million; American International Center another $3.6 million;

and the Capital Athletic Foundation $1 million, for a grand total

of almost $32 million.

Again, that does not include lobbying fees paid to Greenberg

Traurig at a rate of $125,000 per month. Thirty-two million dollars

is an astounding number over such a short period of time. When
3

one examines what benefits the tribe actually derived, some may

say the payments were almost criminal.

Today, we have with us Kevin Sickey, the current chairman of

the tribe, and David Sickey, a current council member. We also

have with us William Worfel, the tribe’s former vice chairman, and

Kathryn Van Hoof, the tribe’s former general counsel. I want to

thank them and the tribe for their continuing cooperation with the

committee’s investigation. I am interested to hear their reaction to

the evidence presented today.

Although the questionable transactions in which Mr. Abramoff

and Mr. Scanlon engaged are too numerous to cover in this hearing, I want to focus on an illustrative few. Take, for example, $3.17

million that Mr. Scanlon requested from the Coushatta for the Louisiana Battleground Program.

In an October 24, 2001 e-mail, Mr. Abramoff wrote to Mr. Scanlon, ‘‘I want to see if we can pump up our LDA for the second-half

to make sure we do not fall out of the top 10. I can achieve this

if I can run some of the money for the Coushattas through the

firm, then get it to CCS.’’ Concerned, Mr. Scanlon asked, ‘‘Are you

sure Baggett will let you rip it back out?’’ Mr Abramoff responded,

‘‘If not, it will be a cold day in hell that they get this check from

my grubby hands.’’

To get the money into Greenberg Traurig, Scanlon made the

pitch to Kathryn Van Hoof, outside counsel to the Coushatta at the

time. ‘‘We broke this into two invoices, one to be paid to Greenberg

Traurig for $1 million and one paid to Capitol Campaign Strategies, GT’s public affairs entity, for the balance. We usually just invoice through Capitol Campaign Strategies, so the lawyers at the

firm rest easy, while we are out burning the countryside. In this

instance, however, we plan to do some things through the law firm

umbrella due to their highly sensitive nature and confidentiality

reasons. I hate hiding behind lawyers, but we are going to do some

crazy stuff on this one so I guess it is okay.’’

The attached invoice Mr. Scanlon submitted under Greenberg

Traurig’s name identified the purpose of the payment as ‘‘public affairs services.’’ It appears that at no point did Mr. Scanlon or Mr.

Abramoff tell the Coushatta that their money would be used for

anything other than political activities.

But that $1 million never went to the tribe’s political activities.

At Mr. Abramoff’s direction, it instead padded the coffers of the

Capital Athletic Foundation, Jack Abramoff’s private charity.

Greenberg Traurig, too, was deceived in this transaction. To extract

the money from Greenberg Traurig’s trust accounts, Mr. Abramoff

told the firm that the Coushatta knew about the payment to the

Foundation and had authorized it.

Let me be clear. The tribe did not know about and had not approved the transaction. Certainly, the tribe had no intention of providing what turned out to be the seed money for Abramoff’s private

charity. I think the Department of Justice and the Internal Revenue Service will be interested in this apparently fraudulent and

tax-evasive transaction.

I want to stop for a moment and recognize Greenberg Traurig

and its able lawyers at Williams and Connolly. I know this chapter

in the firm’s history is embarrassing and painful in many ways,
4

but I want the record to reflect that consistent with their professional obligations, Greenberg Traurig and its counsel have always

been responsive to the committee’s requests; always made themselves available to answer questions; and have always conducted

themselves with dignity and professionalism in these trying circumstances. I thank them for their assistance in this investigation.

Now, if you look back at Mr. Scanlon’s e-mail to Ms. Van Hoof,

we need to ask: How did Capitol Campaign Strategies spend the

other $2.17 million it requested? According to Capitol Campaign

Strategies’ internal records, a small part was paid to outside vendors for actual work before Mr. Scanlon began to raid it. On November 2, 2001, Mr. Scanlon took $1.4 million as a shareholder

draw. Later entries in the CCS accounting ledger show at least

$115,000 apparently going for Mr. Scanlon’s wedding which did not

happen. Of course, Mr. Scanlon ultimately paid some to Mr.

Abramoff.

What happened to the more than $4 million the tribe paid to

CCS on January 18, 2002 for another of Mr. Scanlon’s ‘‘high-octane’’ programs? Mr. Scanlon withdrew the first $1.9 million as a

shareholder draw. He paid another $20,000 to Jon van Horn, who

was at that time an employee of Greenberg Traurig. Mr. Scanlon

then paid $2.7 million to Kaygold, Mr. Abramoff’s alter-ego. And where did the $2.3 million that the Coushatta paid into the

American International Center on April 9, 2003 go? Four days after

its receipt, $991,000 went to Kaygold, Jack Abramoff’s company.

Another $1.3 million went to Capitol Campaign Strategies on April

22. From there, $15,000 was paid to a research company for work

performed. Michael Scanlon drew down $1.4 million, apparently for

work on his house, personal expenses and as a general shareholder

draw.

Where it went after that, the committee cannot yet say. What it

can say, however, is that the Coushatta apparently received little

of the intended benefit for the vast sums it paid. During his pitch

to the tribes, Mr. Scanlon made much of the databases he sold

them. He called them customized and state of the art. They were

technological wonders that contained everything from voter preferences to opposition research. He claimed that his company constructed, maintained and updated them.

But ‘‘high-technology’’ came at a steep price, according to Mr.

Scanlon. In his October 23, 2001 memorandum to the tribe about

their Battleground Program, Mr. Scanlon claimed that modifying

the tribe’s already existing database would cost $1,345,000. In the

Coushatta political program, Mr. Scanlon pitched in 2003, for

which the tribe paid millions of dollars, he claimed that ‘‘we are

well underway in what is the most significant part of the 2003 program, and quite frankly the most expensive part of the program

thus far.’’ Yet Mr. Scanlon paid no more than $105,000 for the

Coushatta database. His company did not construct it. He

outsourced the database to another company.

We are fortunate to have with us today B.R. McConnon, the

president of Democracy Data and Communications, the vendor that

actually provided the software program and constructed the database. I think his testimony will be instructive on this issue and I

thank him for his appearance and cooperation.
5

I could continue identifying other individual transactions, but our

time today is limited. Suffice it to say that Mr. Scanlon and Mr.

Abramoff made much money off the Coushatta.

Today, the committee will also examine certain issues related to

a nonprofit called the Council of Republicans for Environmental

Advocacy, commonly known as CREA. Information in the committee’s possession indicates that Mr. Abramoff directed at least four

of his tribal clients to contribute no less than $250,000 to this organization from 2001–03. The question is why. The committee can

point to nothing that the CREA did for the tribes in particular, or

on Native American issues in general, that merited such generosity.

In fact, documents obtained in the course of the investigation

suggest that Mr. Abramoff might have had his tribal clients pay so

much because he perceived that CREA’s president, Italia Federici,

would help him get inside information about, and possibly influence, tribal issues pending at the Department of the Interior. Internal business communications between Mr. Abramoff and his associates reflect that Mr. Abramoff believed that Ms. Federici had

‘‘juice’’ at the Department of the Interior and deemed her ‘‘critical’’

to his tribal lobbying practice. Whether she actually did have access and influence or whether she was just saying so to have Mr.

Abramoff’s tribes continue their donations is a question I hope is

answered today.

Whatever the answer, one point should be made clear, and I believe all the witnesses on the fourth panel will agree. There has

been no evidence to suggest that Secretary Norton knew of, much

less sanctioned, Mr. Abramoff or anyone else using her name in

seeking fees and donations from Native Americans. To suggest otherwise based on the current record would do a great disservice to

the Secretary.

This hearing brings the committee one step closer to concluding

its investigation. Over the next few months, the committee will

continue its work and early next year it will prepare an appropriate report. Of course, should the evidence warrant, the committee will conduct further hearings.

As I sit here today, I cannot say what specific legislative remedies will result from this investigation. Clearly, lobbying reform is

one of the issues that will be addressed. Whatever those remedies,

I sincerely hope that the sanitizing light of public scrutiny shed on

these lobbying practices has benefitted not just the affected tribes,

not just Indian country, but all who participate in and are part of

our great democratic process.

Finally, in preparation for this hearing, Vice Chairman Dorgan

has asked that certain documents produced in response to committee subpoenas in this matter that he is keenly interested in be

made part of the record. I have likewise asked that certain documents be made part of the record. I now ask for unanimous concurrence that both sets of documents, which were exchanged and

agreed upon before today’s hearing, be made part of the record.

Finally, I believe that Ms. Federici is not here. Is that correct?

As far as we know, Ms. Federici has not chosen to respond to subpoena or we have been unable to subpoena her. As I wrote to her

lawyer, we will have another hearing with her as the witness at
6

whatever time we are able to track her down. It is very unfortunate that she has chosen not to cooperate in this hearing.

Senator Dorgan.

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

NORTH DAKOTA, VICE CHAIRMAN, COMMITTEE ON INDIAN

AFFAIRS

Senator DORGAN. Mr. Chairman, I will not repeat much of what

you have added. However, I do have a statement of some length.

Let me say that when this committee began this odyssey some

long while ago, I doubt if any of us would have imagined the tangled web that we would have uncovered. Schemes and personalities; it is a little like a bad novel with many characters and subplots. Each additional hearing has raised even more questions and

added to the bizarre twists of the story. Each successive hearing

has also increased my concern about a political system that in

these circumstances seemed to encourage and reward unethical behavior.

While the committee has focused on the corruption and greed of

two individuals, in particular Jack Abramoff and Michael Scanlon,

I think in some ways they are symptomatic of larger problems. We

only need to open the newspaper each morning to read of the latest

scandals.

One person has been indicted, in fact, in part for giving false information to this committee during this investigation. Our staff has

received information indicating there have been other attempts to

obstruct this investigation. Our staff has received reports and questions of senior Government officials interceding on behalf of friends

in Government decisionmaking.

It is my hope that when the final report is written on this investigation, it not only recounts the facts and recognizes the illegal

and unethical conduct that has occurred, but that it will address

what is at the heart of why we sit on this dais today. We cannot

change the ethics or the moral conduct of those who decide for their

own reasons to break the law or make a living deceiving people,

but this Congress can tighten up on the laws to ensure full disclosure and transparency, that it becomes a practice, not just a concept.

I thank the Chairman and his staff for their persistence in seeking the truth and making sense of the morass of information that

we have received. I particularly appreciate the respectful manner

in which the committee has worked with the tribes during the

course of the investigation. Our focus has been on fraud and deception committed against the tribes as the committee’s congressional

mandate encompasses all issues affecting Native Americans and

the unique trust relationship that they share with the Federal Government. But it needs to be emphasized that the fraud and deception committed by Mr. Abramoff and his cohorts reached well beyond the tribes.

At the committee’s hearing in June of this year, we heard from

witnesses about the fraud that was committed against the Choctaw

Tribe in Mississippi. In preparation for that hearing, we uncovered

a number of questionable transactions involving tax-exempt charitable organizations.
7

Subsequent to that hearing, the Chairman and Ranking Member

of the Senate Finance Committee have written us requesting that

this committee provide them with documents that fall within the

jurisdiction of the Finance Committee about the use or potential

misuse of 501(c)(3) and 501(c)(4) organizations. It is my understanding that we will provide those documents and pertinent correspondence following today’s hearing to the Senate Finance Committee.

The fraudulent activities that the investigation has discovered

really almost know no boundaries, not by committee jurisdiction,

geography, greed or deception. Our staffs working together have reviewed over 500,000 documents, documents that tell a complicated

and tortured tale of influence-peddling, friends betraying friends

for political and monetary gain, and sadly, of many innocent victims who were unwittingly snared into a web of deceit.

Our focus today is on the Coushatta Tribe of Louisiana, a tribe that spent a stunning $37 million on Mr. Abramoff and many of

his schemes. Documents suggest that while some of this money was

spent on legitimate lobbying activities, an alarming amount can be

tracked to the pockets and personal interests of Mr. Abramoff and

Michael Scanlon. During the period from February 2001 to March

2004 when the tribe was represented by Greenberg Traurig, the

Coushattas have two major goals: First, to renew its compact with

the State of Louisiana; and second, to protect its financial turf by

keeping out gaming competitors.

To be fair, Mr. Chairman, in the beginning the overall goals of

the tribe were for the most part achieved. However, along the way

it appears that about two-thirds or something nearing that of the

money paid by the tribe was skimmed off the top by Mr. Abramoff

and Mr. Scanlon, through Mr. Scanlon’s company called Capitol

Campaign Strategies. These millions could have been directed in

other ways, creating new jobs, providing health care for tribal

members and so on, but instead it appears it helped pay for a very

expensive wedding, seaside mansion, a charitable foundation; charitable, I might add, only to Mr. Abramoff. I think that once again

it calls into question judgment and ethics and the morals of those

who have been involved in this.

I want to note that the Indian tribes were not Mr. Abramoff’s

only targets. His pitch to potential clients was in fact global. For

him, it was a simple proposition. If they had money, he offered access and influence.

In 2003, he offered to arrange for the President of Gabon a visit

with President Bush, Members of Congress, and other policy opinion-makers in the United States in exchange for $1 million. To

close the deal, he told the President of Gabon that he was ‘‘willing

to travel to Western Africa at the conclusion of his visit to Scotland

with Congressmen and Senators I take there each year. It is possible they will want to join me in Gabon, which would be an extra

bonus.’’ That arrangement was not concluded, but it shows the

global reach and the interests of influence.

The experience of the Coushatta Tribe continues themes we have

seen in previous hearings. There is substantial evidence the tribe

received value for some of the lobbying fees but a lot of it, we may

never know exactly how much, was siphoned off by Mr. Abramoff
8

and Mr. Scanlon. The excessive amount of money involved, a staggering $37 million, magnifies the situation. Influence-peddling appears to have reached new heights. The use of shell companies, socalled charitable organizations, to hide the sources of money has

been found to be even more robust.

In two instances, Mr. Abramoff asked the Coushattas to contribute to the Council of Republicans for Environmental Advocacy, or

CREA, a business-backed 501(c)(4) environmental group. The executive director of CREA is the person that Senator McCain indicated

has failed to show for today’s hearing under subpoena, and will be

asked to appear by herself, I understand, at the next hearing, and

we will have a hearing that devotes itself exclusively to her recollection of events. But the e-mail traffic suggests that Mr. Abramoff

expected the executive director of CREA to do his own bidding with

a close friend of hers a top official at the Department of the Interior who is testifying today.

According to the former tribal Vice Chairman William Worfel, the tribe was asked by Abramoff to contribute $50,000 to CREA to

pay for a Department of the Interior study on the national park

system that allegedly the department could not afford. The contribution was made to CREA, which by the way is not affiliated

with the Department of the Interior except by friendships. We have

so far found no evidence that a study was ever conducted. Later,

the tribe gave $100,000 to CREA and Italia Federici, the head of

CREA she thanked Abramoff for the generosity, saying that without contributions that Abramoff arranged, CREA would not have

been able to pay for the half-page ad in the Washington Post supporting President Bush’s energy plan.

As Mr. Abramoff had learned with other clients, mobilizing and

manipulating the Christian Coalition was also an effective way to

turn back potential gaming competitors. The e-mail traffic in previous hearings and this hearing that will be released shows that

with the Coushatta situation, it was no different than the other

tribes that we discussed previously, but the stakes were even higher.

No surprise then that Mr. Abramoff called his friend at Century

Strategies, Ralph Reed, for assistance. No surprise, either, that a

decision was made to send Mr. Reed’s compensation through a

number of entities to hide its origin. At the request of Mr. Reed,

the Coushatta, like the Choctaw before them, routed their funds to

him through a variety of entities because of his concern about

being publicly associated with gaming money.

The tribe’s outside counsel in an interview with committee staff

described how in one instance $400,000 flowed from casino revenues to Southern Underwriters, a company owned by tribal contractor Aubrey Temple, to the American International Center, and

then on to Mr. Reed’s company, Century Strategies. The counsel indicated it was no secret about who the intended ultimate recipient

was. She also said the only revenues available to the Coushatta

were from their gaming enterprise, so anyone paid by the tribe was

being paid by gaming revenue.

Mr. Abramoff gained the trust of the Coushattas. He not only

portrayed himself as a friend of some of the most powerful people

in the world, he actually delivered them. Letters from Members of
9

Congress, many of whom were not from Louisiana, appeared at the

Department of the Interior opposing gaming expansion in Louisiana, which would have had the practical effect of protecting the

Coushatta gaming turf.

Through Abramoff’s connections, the Coushatta were invited to

the White House to have a photo taken with the President. The

Coushatta trusted Abramoff so much that when he asked them to

send $1 million to his firm, they assumed it was a legitimate business expense. Abramoff’s firm trusted him, too, and when the $1 million check

arrived, they followed his directions and ran it through their corporate trust account and rewrote it to the Capital Athletic Foundation. Little did the tribe or the law firm know this particular $1

million provided the seed money for the Capital Athletic Fund,

which we discovered in the last hearing was operated as Mr.

Abramoff’s personal charity, among other things used to start a

school for his children and others and to pay for sniper education

in Israel.

Mr. Chairman, finally, we have a number of witnesses with us

today who can speak to many transactions and schemes that I have

described and you have described. As human beings, we are often

exposed to the same set of facts and circumstances, yet perceive

them differently. The task of this committee is to sort through the

facts and perceptions to gain clarity into what happened, where

clarity sometimes might seem out of reach. In this case, Mr. Chairman, clarity at least shows me, and I think shows you, a pretty

seamy side of American politics and influence-peddling.

I look forward today to hearing from the witnesses.

The CHAIRMAN. Senator Thomas.

STATEMENT OF HON. CRAIG THOMAS, U.S. SENATOR FROM

WYOMING

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

so we can get on with the hearing.

I want to thank you, of course, for all the interest you have taken

in this. It is a tough issue and certainly it is one that is important

to this country and to this committee. We have heard a great deal

about it and the public needs to know more about it. It is my understanding that the Justice Department really has the role in

doing this, and I think we ought to limit ourselves to what our role

ought to be as a legislative committee.

I also think, frankly, we are talking about these dollars, maybe

it would be interesting to know that the tribes that are usually

short of money are giving $35 million or $40 million for lobbying.

I think that is kind of an interesting technique that I have not

heard much about. So I think you ought to expand your scope a little bit on that.

We learn from experience, but I hope pretty soon, Mr. Chairman,

we can wind this up and move on with some of the other issues

that affect the tribes in this country.

I want to welcome my friend Steve Griles here, the Deputy Interior Secretary in the past, who has done a great job, and thank you

for being able to be here.

The CHAIRMAN. Thank you, Senator Thomas.
10

Our first panel is Kevin Sickey, the chairman of the Coushatta

Tribe of Louisiana; and David Sickey, the council member of the

Coushatta Tribe of Louisiana. Welcome to both witnesses. We will

begin with you, Chairman Kevin Sickey. Please proceed.

STATEMENT OF KEVIN SICKEY, CHAIRMAN, COUSHATTA

TRIBE OF LOUISIANA

Mr. KEVIN SICKEY. Good morning, Chairman McCain, Senator

Dorgan, and distinguished members of this committee.

I am Kevin Sickey, chairman of the Coushatta Tribe of Louisiana. With me at the table is my brother and council member David

Sickey and the tribal attorney Jimmy Faircloth.

I would also like to recognize tribal council member Tee LaBuff

and the members of our tribe who made this trip to attend this

hearing. Many of these tribal members were the first to suspect

that something had gone terribly wrong with the lobbyist Jack

Abramoff and Mike Scanlon, so it is appropriate that these tribal

members are present for this proceeding. At one time, they were

referred to as dissidents for questioning the lobbyists’ actions, a

label provided by the lobbyists to divert suspicion from their own

activities.

We are grateful for the opportunity to appear before this important committee. Your staff has been cooperative and respectful and

we appreciate their hard work.

We will divide our opening statement into two parts. First, I will

provide a brief history of our tribe and I will explain our government and the political environment that lobbyists used to their advantage. And I will comment briefly on the harm caused by their

fraud. Obviously, the information the committee is making public

today is both shocking and is deeply disturbing to me, both as

chairman of the tribe and as a tribal member.

Following my brief comments, Councilman Sickey will provide a

broad overview of some of the things we discovered in our own review. Before we proceed, however, I must respectfully qualify our

testimony. Neither Councilman Sickey nor I had any direct dealings with Mr. Abramoff or Mr. Scanlon.

We were not involved in the decision to hire these lobbyists, nor

were we involved in any aspect of coordinating their work. We are

both reluctant to speculate about the conduct and motives of the

lobbyists. I suspect that any such speculation or conjecture will not

aid the work of this committee.

Finally, because we are currently involved in litigation about

these events, we must be cautious in our comments concerning the

actions of others.

We are descendants of the Creek Confederacy from the Muskogee

family of tribes. Our ancestors were stripped of 22 million acres of

land by the United States following the Creek War in 1814. Approximately 50 years later, a small band of Coushattas settled in

the Calcasieu River area near Kinder, LA.

In 1884, they were forced to move again when homesteaders

began claiming their land. They then purchased a small tract of

land 3 miles north of Elton, LA. In 1898, the United States placed

160 acres of land into trust for the tribe. Unfortunately, the trust
11

was revoked in 1953, which began a 20-year struggle for re-recognition.

In 1973, the Coushatta Tribe of Louisiana was again recognized,

and 7 years later our reservation was again formally established.

In 1985, we held our first election of leaders by popular vote. We

then established our own judicial system, police department, housing authority and many other social programs.

Today, our tribe consists of over 850 members, approximately

400 of whom live in the Coushatta community. We are proud of our

culture and heritage, and we are dedicated to maintaining the sovereignty that generations of our ancestors sacrificed and even died

to protect.

Our casino and resort opened in January 1995, and since then

we have been blessed with economic prosperity. We employ approximately 2,800 people, with a total annual payroll in the range

of $80 million. We purchase goods and services from Louisiana vendors in the range of $40 million per year. And we contribute approximately $7 million per year to State and local governments. We

are proud to be a vital part of the economy of southwest Louisiana.

This brief period of prosperity follows hundreds of years of unjust

treatment by outsiders, which resulted in abject poverty and hardship within the tribe. This is why it is particularly painful that,

after all those terrible years, our tribe again has been preyed upon

by outsiders.

But on this occasion, at least we are in good company. Certainly

within the modern era, no victimization of Native Americans has

received so much attention, no doubt because the underlying scandal has touched so many influential people. Nevertheless, we deeply appreciate the actions of this committee in bringing this matter

to light.

Our tribe is governed by an elected council consisting of a chairman and four council members. None of the current council members were in office when Mr. Abramoff was hired in early 2001.

Councilman Sickey took office in 2003. He had no direct contact

with either Mr. Abramoff or Mr. Scanlon and very little knowledge

of their activities. In fact, he became a vocal spokesperson against

them.

Council members LaBuff, Verlis Williams, and I took office this

past June. One of our council seats is currently vacant. This wholesale change in leadership was in large part a result of the mess

created by Mr. Abramoff and Mr. Scanlon.

While Indian county has seen so many con-men throughout history, few, if any, were as skilled as Mr. Abramoff and Mr. Scanlon

at creating and then preying on our insecurities. They preyed upon

our political insecurities, they preyed upon our economic insecurities, and they preyed upon our insecurities about each other.

Our political system is no more turbulent than any other. We,

too, have cycles in leadership and influence, and it occasionally

turns partisan. The lobbyists came to our tribe during one of these

transition periods, and they viewed this as an opportunity for exploitation.

To any decent person, vulnerability in others provides an opportunity to help, but to con-men like Mr. Abramoff and Mr. Scanlon,

our vulnerability simply provided an opportunity to steal. And they
12

hit the jackpot with us, a Native American tribe with a fairly new

casino in the midst of a political transition, and naive to the underworld of governmental affairs.

They inserted themselves into our internal tribal politics, excluded and attempted to discredited those who questioned or opposed them, and deliberately created paranoia on both sides by exaggerating threats from inside and outside the tribe. They exaggerated political threats and they exaggerated economic threats. Then

they exaggerated their ability to deal with these exaggerated

threats. And in the midst of this, they incited political upheaval to

provide cover for their scheme to steal millions of dollars.

We are pleased to report that the political storm within the tribe

has calmed. And we are taking steps to recover the money that was

stolen and to correct our system of checks and balances to ensure

that this will never happen again.

It is important to understand that the harm caused by Mr.

Abramoff and Mr. Scanlon is much greater than the money they

stole. Even though this amount is shockingly large, the scar of victimization runs even deeper, particularly because it has touched

our leadership.

Moreover, the misconduct of Mr. Abramoff and Mr. Scanlon has

harmed all Native Americans in a way that deserves the particular

attention of this committee. The lobbyists’ actions have created a

perception that there is something improper about officials working

closely with Indian tribes. This stereotype threatens to chill tribal

communications with officials who can profoundly influence the

well-being of tribes.

Even worse, it unfairly shifts the blame from where it belongs to

the victims. Jack Abramoff is not a product of Indian country. On

the contrary, he is the golden boy gone bad of the American political system. Our tribe and others were victimized when we attempted to fit into the American political system and we were led

to believe that Mr. Abramoff was the gatekeeper.

We have begun the process of repairing the political damage to

our tribe’s reputation. We have met with several of our State and

Federal officials, and they seem genuinely committed to providing

our tribe with the same access and the same channels of communication open to all individuals, businesses and special interest

groups, nothing more, nothing less, and without favors or contributions. That is the way the system should work, and that is certainly the way we would like to participate.

There have been a lot of adjectives used to describe Mr. Abramoff

and Mr. Scanlon. Greedy and corrupt come to mind. But those are

common terms, often used to describe people who forfeit judgment

for money. Abramoff’s and Scanlon’s actions were hardly common.

They set a new high-water mark for greed and corruption.

I have read that Mr. Abramoff considers himself a religious man.

If that is the case, then I do not understand the basis of his faith,

and it is certainly different than ours. Most religions promote compassion and concern for others, and it is clear that Mr. Abramoff

and Mr. Scanlon had no concern whatsoever for the welfare of our

people.

Your committee has done a great service for all Americans by exposing this sad affair. There are lessons here for everyone. I am
13

grateful for the opportunity to address this committee on behalf of

the Coushatta Tribe of Louisiana. Council member David Sickey

will now provide a brief overview of our factual findings.

Thank you.

[Prepared Statement of Kevin Sickey appears in appendix.]

STATEMENT OF DAVID SICKEY, COUNCIL MEMBER,

COUSHATTA TRIBE OF LOUISIANA

Mr. DAVID SICKEY. Good morning, Chairman McCain, Senator

Dorgan, and distinguished members of this committee.

I am David Sickey, a member of the tribal council of the

Coushatta Tribe of Louisiana. I took office in June 2003.

As Chairman Sickey has noted, I was not in office when Mr.

Abramoff and Mr. Scanlon were hired, and I did not participate in

the decisions by the tribal council to authorize their projects or pay

them. I would respectfully submit that it will not aid the committee’s efforts for me to speculate about the events at issue.

My brief comments today will therefore be limited to certain facts

established by the documents we have seen. As you are aware,

many of the documents reviewed by this committee were not available to us. However, my observations today are also based on information provided by your staff, for which we are grateful.

My intention is to provide a broad overview of the environment

in which this fraud was committed. As your investigation must

have revealed, while the scheme of Mr. Abramoff and Mr. Scanlon

was reprehensible, it was also very clever and well-timed. Like

Chairman Sickey, I should note that our tribe is currently involved

in litigation about these lobbying activities, so I am limited in what

I can say today.

I have attempted to organize my observations in chronological

order because the way that this scheme evolved over time was critical to its success.

Mr. Abramoff was hired in March 2001. The tribe entered a contract with his firm, Greenberg Traurig, to provide lobbying services

related to our tribe’s compact negotiation and important regional

gaming issues. According to the contract, Greenberg Traurig was to

receive $125,000 a month plus reasonable expenses. The contract

did not mention Mr. Scanlon nor any of the entities that he used

to charge the tribe an additional $30 million.

During the first 6 months or so of the lobbyists’ employment,

they appeared to deliver on their promises, and so the lobbying

costs appeared justified. During that initial period, the tribe paid

roughly $3.5 million for assistance with our tribal compact, which

was successfully negotiated, and to achieve several legislative objectives. I say that they appeared to deliver on their promises because it is difficult to assess how much impact the lobbyists actually had in accomplishing these tribal objectives. Of course, they

took credit for everything.

If it had ended at that point, around September 2001, then this

would be nothing more than another story about high-priced lobbyists taking credit for results that they may or may not have influenced. But it did not stop there. They leveraged their initial success as a platform for fraud, and by the spring of 2002 had extracted another $17 million from our tribe. By the time it was over
14

in 2004, the tribe had spent approximately $36 million. Ironically,

as the scheme progressed and the bills and rhetoric increased, the

lobbyists’ actual work for the tribe clearly decreased. The Texas threat. On October 5, 2001, the tribe paid $870,000

to Mr. Scanlon’s company, Capitol Campaign Strategies to create

a ‘‘grassroots political structure’’ in Texas. Mr. Abramoff and Mr.

Scanlon were insistent that Texas was on the verge of legalizing

gambling and that this would devastate the Coushatta casino. The

majority of our casino customers travel from Texas, particularly the

Houston area, and we have long understood that legalized gambling in Texas would erode our customer base and our casino revenues.

Recognizing this potential threat and our fear of the consequences, the lobbyists claimed to have critical influence with the

Texas officials who could defeat Texas gambling. This appears to

be the starting point for their most egregious exaggerations and

fabrications. This also appears to be the timeframe when they committed to gouging the tribe for as much money as they could and

to say or do anything that was necessary to prolong the payout. The $1 million payment funneled to one of Abramoff’s causes. On October 30, 2001, the tribe paid $3.17 million for the ‘‘Louisiana

program.’’ This payment marks a high point in the lobbyists’ creative billing. They split the bill by requesting that $2.17 million be

sent to Capitol Campaign Strategies and $1 million to Greenberg

Traurig. According to information shared by the staff, the $1 million payment to Greenberg Traurig was not for any services provided by

the firm. Instead, this $1 million payment was used to pump the

firm’s reported lobbying revenues, thereby maintaining Greenberg

Traurig’s public status as one of the top 10 providers of legal and

lobbying services to Native American tribes.

E-mails involving Mr. Abramoff, Mr. Scanlon and others at Greenberg Traurig revealed that this $1 million payment was funneled through the firm and then used to finance one of Mr.

Abramoff’s favorite causes. The suspect nature and purpose of this

payment structure is reflected in an e-mail from Mr. Scanlon to the

tribe’s former attorney dated October 25, 2001, where he wrote,

‘‘we broke this into two invoices, one to be paid to Greenberg

Traurig for $1 million and one paid to Capitol Campaign Strategies, GT’s public affairs entity, for the balance. We usually just invoice you through Capitol Campaign Strategies so the lawyers at

the firm rest easy while we are out burning the countryside. In this

instance, however, we plan to do some things through the law firm

umbrella due to their highly sensitive nature and confidentiality

reasons. I hate hiding behind lawyers, but we are going to do some

crazy stuff on this one, so I guess it is okay.’’

Mr. Abramoff, who was a partner at Greenberg Traurig, directed

this creating billing arrangement. In my personal view, this payment reveals the extent of Abramoff’s shamelessness. Not only was

he stealing the tribe’s money, but he was also using the theft to

improve his professional reputation and the reputation of the firm.

Hyping the Texas threat. In a memorandum dated November 6,

2001, Mr. Scanlon reports that he had just returned from Texas,

and States, ‘‘We believe now that the Alabama Coushatta will open
15

soon if we do not intercede. This would like be a small facility and

not the class III facility the council is worried about, but we believe

you should shut it down regardless.’’

This exemplifies the lobbyists’ strategy of identifying an exaggerated threat to the tribe’s casino revenues, as does the following assertion in a report from Mr. Scanlon to the tribe dated December

21, 2001: ‘‘Despite our best efforts, the voting public in Texas remains very pro-gaming. The State economy is lagging and with the

Enron and Continental Airlines debacles hitting the Houston area

back-to-back, they are desperate for revenue.

As we said when we came to you with the original Texas proposal, things are really bad over there. We have never before seen

such a pro-gaming atmosphere in Texas or anywhere else in the

country. In our collective political careers, and although we have it

contained for the time being, this environment is a very serious

threat to the Grand Casino’s future.’’

Threats of infiltration. According to a memorandum from Mr.

Scanlon dated January 3, 2002, the company that owned one of our

competitors was ‘‘well known for their ability to infiltrate the electorates of Indian tribes and this will undoubtedly happen there, if

they get a foothold in your region.’’

After hammering this point and others, Mr. Scanlon states——

The CHAIRMAN. Mr. Sickey, would you try to summarize as much

as you can, since we have to move forward. Go ahead.

Mr. DAVID SICKEY. Okay.

At about this time, perhaps sensing some opposition to their proposals and programs within the tribe and likely planning to increase their fees and profits, Mr. Abramoff and Mr. Scanlon began

excluding and attempting to discredit their political opposition on

the council and within the tribe.

On October 31, 2002, the tribal CFO sent an e-mail to Mr.

Abramoff stating the tribal auditors would requesting confirmation

that the tribe had paid a total of $18,559,700 for ‘‘demographic surveys and studies and professional consulting services.’’ Mr.

Abramoff worded the e-mail to Mr. Scanlon asking, ‘‘what should

I say, especially about the last part, the request concerning no contracts?’’

In response to several frantic comments from Mr. Abramoff, Mr.

Scanlon states, ‘‘f-ing weird, really f-ing weird. I hope that this is

a standard operating procedure.’’ He then recommends that Mr.

Abramoff talk to the tribe’s vice chairman before writing anything.

There was never a formal reply. The confirmation requested by the

auditors was not provided. Instead, a decision apparently was

made to lay low until the storm passed.

There is no doubt by this point the lobbyists knew that questions

were being raised about their fees. As is clear from subsequent

events, they obviously did not care. Apparently, they felt confident

that even this type of blatant misconduct was fair game in the

world of big-time lobbying.

At this time, I will go into my closing comments.

The CHAIRMAN. Thank you.

Mr. DAVID SICKEY. In conclusion, as Chairman Sickey and I have

both noted, since we were not involved in any direct dealings with

Mr. Abramoff or Mr. Scanlon, there is very little we can say here
16

today about the events at issue that would not involve speculation

and conjecture. Therefore, until our own investigation is complete,

both of us are reluctant to comment further on the lobbying activities in question. Moreover, any speculative comments on our part

could jeopardize our legal efforts to recover the tribe’s money.

But what we can state with firm conviction, based on our own

review and the findings of this committee, is that our tribe was defrauded out of most of the money we paid. And no matter who the

lobbyists used or who they try to blame, this fraud was orchestrated and carried out by Jack Abramoff and Michael Scanlon.

From the tribe’s perspective, the fraud was orchestrated under the

banner of Greenberg Traurig.

Your committee has performed an important service by exposing

this fraud and I am grateful for the opportunity to address the

committee today. As Chairman Sickey has noted, there are lessons

in this sad episode for everyone.

Thank you.

[Prepared Statement of David Sickey appears in appendix.]

The CHAIRMAN. Thank you very much.

Senator Dorgan.

Senator DORGAN. Mr. Chairman, in the interest of time, I will

not ask questions. I would thank the tribal representatives for

being here to present testimony. I would also say that my colleague

from Wyoming asked an important question on all of this. I think

there was fraud and deception and so on, but it is also the case

that the decision to spend that quantity of money is quite an extraordinary matter of strange judgment nonetheless, so I agree

with my colleague from Wyoming about that.

I thank you for at least filling in some pieces of the puzzle from

your perspective and I hope the committee will be able to fit the

rest of the pieces together as well.

The CHAIRMAN. Senator Thomas.

Senator THOMAS. Thank you, Mr. Chairman.

I had to go to the floor so I did not really hear the testimony,

so I have no questions. Thank you.

The CHAIRMAN. Thank you very much.

Councilman Sickey, your complete statement will be made part

of the record. I had a chance to read it last night, and I thank you.

I thank you both and I wish you luck. I appreciate your candid

testimony today. Thank you very much.

Mr. KEVIN SICKEY. Thank you, Mr. Chairman.

Mr. DAVID SICKEY. Thank you.

The CHAIRMAN. Our next panel is William Worfel, who is the

former tribal council member of the Coushatta Tribe of Louisiana;

Kathryn Van Hoof, former outside counsel to the Coushatta Tribe

of Louisiana; and Fred Baggett, the managing shareholder and

chairman of National Governmental Affairs Practice of Greenberg

Traurig, Tallahassee, FL.

Please come forward.

Since we have four panels, I would appreciate your witnesses

keeping their opening statements as brief as possible. We will

begin with Mr. Worfel. Welcome and please proceed.
17

STATEMENT OF WILLIAM WORFEL, FORMER TRIBAL COUNCIL

MEMBER, COUSHATTA TRIBE OF LOUISIANA

Mr. WORFEL. Good morning, Mr. Chairman and members of the

committee. It is an honor to appear before you today. My name is

William Worfel. I live in Oberlin, LA. I am a former member of the

governing council of the Coushatta Tribe of Louisiana. My mother

is a full-blooded Coushatta member. I am a happily married man

with three daughters that keep me and my wife Tammy very busy.

I again thank you for the opportunity to address you today regarding some very important matters that have impacted not only

my tribe, but also Native Americans as a whole.

My first contact with this committee in April 2004, I am sorry

to say, was under much less informed circumstances. My first contact with this committee was in the form of a letter, first and foremost. Please understand that the letter does not in any way reflect

how I feel about the honorable members of this committee or the

committee’s honorable purpose.

This letter was written for me by Michael Scanlon and addressed

to Senator McCain. Both Abramoff and Scanlon told me that this

committee’s investigation would not amount to anything and that

if we sent in the letter he drafted, Jack would personally deliver

the letter to the committee and the investigation would end.

Since at that time we knew nothing of the rip-off that Mike

Scanlon and Jack Abramoff had undertaken against our tribe and

many other tribes, I trusted Mike Scanlon at his word. I regret the

letter sent to this committee with my signature on it. I view that

letter as the last fraud committed against me and my tribe by

Abramoff and Scanlon.

I sit here today very satisfied that I have since then fully and

actively cooperated with the committee’s investigation into the

wrongdoings of Jack Abramoff and Michael Scanlon. The letter

drafted for me by Michael Scanlon to this committee was addressed

to Senator McCain. As this process has moved forward, I have

learned that Senator John McCain is a national hero. I can assure

you that my father, a Vietnam veteran and a Korean War veteran,

would whip my butt if he knew I had any role in disrespecting Senator McCain. Nothing could be further from the truth.

Because of the fine work done by this committee and the Department of Justice, we now know that these two men committed a consistent pattern of fraud and deception, not only against our tribe,

but against many tribes. I have no friendship for these men. In my

mind they are educated thieves that must be brought to justice so

this will not happen again in Indian country.

I was first elected to the Coushatta Council in 1999. Lovelin Poncho was our chairman. When Jack Abramoff and Mike Scanlon

were hired in March 2001, we were involved in a very vigorous

fight over the renewal of our gaming compact with the Governor

of Louisiana and the local governments surrounding our casino.

Terry Martin, a member of the Chitimacha Tribe of Louisiana,

recommended Jack Abramoff and Mike Scanlon to our council. Mr.

Martin told us that Jack Abramoff and Mike Scanlon worked for

Chief Phillip Martin of the Choctaw Tribe of Mississippi. As you

know, the Choctaw Tribe and Chief Martin are viewed in Indian

country as very respected and as a sophisticated business-oriented
18

tribe. From following your investigation, I know that Abramoff and

Scanlon also defrauded the Choctaw Tribe.

Chairman Poncho had delegated the responsibility of checking

out Abramoff and Scanlon to our legal counsel, Kathryn Van Hoof,

and former council member, Bertney Langley. I have no doubt that

these folks looked hard at Jack Abramoff and Michael Scanlon and

their law firm, Greenberg Traurig. That Jack worked for a Washington, DC mega-law firm like Greenberg Traurig was very impressive to us all.

As I sit here today, knowing all the real facts, I consider Greenberg Traurig as guilty as Jack Abramoff and Michael Scanlon. During 2001, I was not responsible for working with Jack Abramoff

and Michael Scanlon. Our attorney, Kathryn Van Hoof, council

member, Bertney Langley, and Chairman Poncho worked with

them at that time. As council members, we all know that competitive threats of expanded gaming were happening all the time.

State-sponsored gambling, slot machines at the horse racetrack,

and the possibility of Texas legalizing gaming and the casinos

being built by other tribes were consistent threats to our market

share.

In early 2002, Kathy Van Hoof resigned. After her resignation,

Chairman Poncho assigned me to keep tabs on competitive threats

to our casino and to handle Government relations efforts for our

tribe. I became the contact person for Jack Abramoff and Michael

Scanlon in March 2002.

The most critical issue during this time was a possible casino by

the Jena Band of Choctaw Tribe. The Jena Band had tried to work

with our tribe and Chairman Poncho for many years to get their

own casino. At one point in the negotiations, our tribe was going

to loan the necessary funds to the Jena Band and we would get a

measuring contract in return.

The discussion had always been that the Jena Band would put

their casino in Northern Louisiana, and it would not in any way

compete with our casino. However, when we learned that Jena was

trying to locate a casino on the Louisiana-Texas border off Interstate 10, we began to work hard to stop them. Michael Scanlon was

working for us to develop a grassroots campaign against expansion

of gambling, including the Jena Band’s efforts. Scanlon’s efforts included using Christian groups that oppose gambling.

Scanlon and Ralph Reed also worked in 2001 on our compact renewal. We never met with Ralph Reed, nor did we tell Mike Scanlon to use Ralph Reed. I believe that Jack Abramoff and Michael

Scanlon did assist us during our efforts to renew our compact and

in the fight against the Jena Band. However, there are other

projects that I now believe were not helpful and never intended to

be.

For example, our tribe was billed millions of dollars for the development of a database of information that Abramoff and Scanlon

said would be a great help in grassroots campaigns and political

lobbying in the future. I have learned from your investigation that

the database that Scanlon supposedly was using on our behalf was

really not something that would cost the money they said it did.

We did not know that Abramoff and Michael Scanlon had a secret
19

agreement to split the fees that we paid Michael Scanlon for the

products that he pitched to us.

We were told that we were paying for the cost of letter-writing

campaigns, media campaigns, and political research. We now know

that Scanlon was overcharging us and paying out one-half or more

of the money to Jack Abramoff’s personal pet projects. I now know

that Abramoff and Scanlon actually did not do much of the work

they took credit for.

Abramoff and Scanlon were always coming to us with the next

project that they thought we should do. It was always one crisis

after another. There were real threats and some not so real, looking back with hindsight. Texas gaming was one of those oversold

crises.

In 2001, we were told by Abramoff that Texas was one vote away

from allowing casino gambling. I have since learned that legalized

casino gambling was far from being approved by the Texas Legislature. In addition, we have learned that Jack and Mike were working for other tribes in Texas that were trying to get gaming, when

they were supposed to be watching out for us.

Once again, these thieves took every opportunity from us and

other tribes. What should you spend to save a $300-million a year

business when the lawyers who work for you tell you that it could

be all gone if we do not act right now? Our tribe has one and only

one business. We made tough decisions and we acted always in the

best interests of our tribe.

I understand and acknowledge that our council’s hiring of

Abramoff, Scanlon, and Greenberg Traurig was a mistake. No one

chooses to be defrauded, especially by professionals who you have

been told you could trust. However, the fact that we hired government relations professionals was not a mistake.

As I know this committee understands, Native American gaming

is highly political. It is an $18-billion industry. Not only do you

have to have your Governor’s approval, but also the Department of

the Interior. Congress and State legislatures passing or not passing

gaming laws directly impact the competitive environment in which

you operate. Then there are the local governments that are always

trying to gain something off your casino revenues.

Let me tell you, there is a lot of redtape that comes along with

gaming. I am not saying that is bad. It is just the way it is. Successful tribes such as ours must have the help of qualified, honest

professionals that understand the business and politics of Native

American gaming. I hope that your efforts result in keeping those

professionals more honest and trustworthy in the future.

I again thank this committee for the opportunity to speak to you

today. I applaud you and your efforts. Thank you.

The CHAIRMAN. Ms. Van Hoof.

STATEMENT OF KATHRYN VAN HOOF, FORMER OUTSIDE

COUNSEL, COUSHATTA TRIBE OF LOUISIANA

Ms. VAN HOOF. Mr. Chairman, I have no prepared statement. I

am former counsel for the tribe and I have been authorized to

speak to the committee today subject to attorney-client privilege.

So long as that privilege is not implicated or the attorney-client
20

work product doctrine, it is my plan to cooperate fully with the

committee and answer your questions.

The CHAIRMAN. Thank you very much.

Mr. Baggett.

STATEMENT OF FRED BAGGETT, MANAGING SHAREHOLDER;

CHAIRMN, NATIONAL GOVERNMENTAL AFFAIRS PRACTICE,

GREENBERG TRAURIG, TALLAHASSEE, FL

Mr. BAGGETT. Mr. Chairman, Mr. Vice Chairman, Senator Thomas, thank you for the opportunity to appear before you today. My

name is Fred Baggett. I am a shareholder in the Tallahassee Florida office of Greenberg Traurig.

I have spent my entire professional career as a lawyer and lobbyist in the State of Florida. I am currently a managing shareholder

of the Tallahassee office of Greenberg Traurig and head of its national governmental affairs practice. I also maintain a full-time administrative law and lobby practice with the firm. It is comprised

almost exclusively of work in Florida with the State Legislature

and executive branch of Government.

Turning to the subject of today’s hearing, in 2001–04, Jack

Abramoff worked as a non-attorney lobbyist for the Washington,

DC office of our firm. Up until the end of Mr. Abramoff’s tenure

with Greenberg Traurig, we believed that Mr. Abramoff was rendering high-quality professional services to his clients. Late in 2003

and early 2004, reports began to emerge questioning the amounts

of money paid by various Indian tribes to Mr. Abramoff and Mr.

Scanlon in connection with services the two had rendered.

During this timeframe, Mr. Abramoff was questioned about his

financial relationships with Mr. Scanlon. Records available to the

committee, including a February 3, 2004 interview of Mr. Abramoff

conducted by Susan Schmidt of the Washington Post reflect that in

front of firm personnel, Mr. Abramoff denied having any financial

relationship with Mr. Scanlon or engaging in any improprieties in

connection with his lobby work for the tribes.

Nevertheless, because concerns had been raised, Greenberg

Traurig sought to ensure that there was no impropriety on the part

of Mr. Abramoff. In mid-February we hired Henry F. Schulke of

the Washington, DC firm of Janis, Schulke, and Wexler to conduct

an internal investigation focusing on the existence of any financial

relationship between Mr. Abramoff and Mr. Scanlon. Mr. Schulke

is a former Federal prosecutor who served as Assistant United

States Attorney for the District of Columbia from 1972–79 and is

a highly regarded member of the District of Columbia Bar.

He and others with his firm have extensive experience in this

type of internal investigation. As Mr. Schulke began his investigation, the Washington Post published the article, ‘‘A Jackpot from

Indian Gaming Tribes,’’ raising questions about fees charged by

Mr. Abramoff and Mr. Scanlon for lobbying and grassroots work.

Around the same time, this committee announced that it would

be looking into Mr. Abramoff’s activities. Facing the prospect of Mr.

Schulke’s investigation, Mr. Abramoff for the first time disclosed to

our firm that he had received money from Mr. Scanlon in connection with the work the two men were doing on behalf of the Indian

tribes. Upon learning of this arrangement, the firm immediately re-
21

quested and obtained Mr. Abramoff’s resignation. The firm issued

a statement to that effect on March 2, 2004.

Notwithstanding Mr. Abramoff’s departure, Greenberg Traurig

asked Mr. Schulke to continue his investigation. Based on Mr.

Schulke’s investigation, the firm has made disclosures to its clients

who were affected by Mr. Abramoff’s activities, worked out resolutions with a number of affected clients, and hopes to work out resolutions with still other affected parties.

The facts surrounding Mr. Abramoff’s employment by our firm

are unhappy ones. We at Greenberg Traurig regret the improprieties which occurred during Mr. Abramoff’s 3 years with us. We

share the chairman’s and the rest of the committee’s dismay at Mr.

Abramoff’s activities and behavior. We appreciate the work of the

committee and its staff in thoroughly investigating this matter and

we continue to cooperate with you.

Again, I thank you for the opportunity to appear.

[Prepared Statement of Mr. Baggett appears in appendix.]

The CHAIRMAN. Thank you, Mr. Baggett.

I would like to note for the record and for Mr. Worfel’s father

that William Worfel has been fully cooperating with the committee

and the committee greatly appreciates his cooperation. Thank you.

Please relay that to your father for me. I thank you.

Ms. Van Hoof, I understand that the tribe became acquainted

with Mr. Abramoff and Mr. Scanlon at a USET conference and

then Mr. Abramoff and Mr. Scanlon met with the tribal council in

Louisiana to make a proposal. Am I correct in understanding that

Mr. Abramoff was clear that Mr. Scanlon was ‘‘part of the package’’

in that briefing?

Ms. VAN HOOF. Yes, sir; that was the tribe’s understanding.

The CHAIRMAN. During what time period were you the primary

point of contact between the tribe, Mr. Abramoff, and Mr. Scanlon?

Ms. VAN HOOF. I believe that would have been from around

March 2001 until the compact was signed in July 2001, and continuing for some short period after that, perhaps into October or

November, but not beyond that point, I do not believe.

The CHAIRMAN. When did you first learn of the American International Center? In 2001?

Ms. VAN HOOF. It would have had to have been during 2001,

during that period.

The CHAIRMAN. Based on your conversations with Mr. Abramoff,

what did you understand the American International Center to be?

Ms. VAN HOOF. I understood it as represented to the tribal council to be an organization, a conservative organization that did not

support the expansion of gaming in Louisiana. It was an organization whose cause the tribe could certainly support.

The CHAIRMAN. Did Mr. Abramoff recommend that the

Coushatta pay money into the American International Center to

support its anti-gambling activities?

Ms. VAN HOOF. Yes; Mr. Abramoff raised that as an opportunity

for a contribution by the tribe to help support any effort that would

not expand gaming in Louisiana.

The CHAIRMAN. Did Mr. Abramoff or Mr. Scanlon ever tell you

that the American International Center was owned or operated by

Michael Scanlon?
22

Ms. VAN HOOF. Absolutely not.

The CHAIRMAN. Did Mr. Abramoff or Mr. Scanlon ever tell you

that the American International Center was paying money to Mr.

Abramoff from the Coushatta payments it received?

Ms. VAN HOOF. No.

The CHAIRMAN. Mr. Baggett, when did you first learn of the

American International Center?

Mr. BAGGETT. It would have been in the fall of 2001.

The CHAIRMAN. And it had something to do with Malaysian-related issues?

Mr. BAGGETT. Yes, sir; we were asked to represent, Mr. Abramoff

brought to the firm AIC, American International Center, as a client

for the firm to represent on various Malaysian business interests.

The CHAIRMAN. For example, that it was like a think-tank?

Mr. BAGGETT. We were told by Mr. Abramoff that AIC was an

established think-tank that represented a number of interests both

in the area of public relations and policy advocacy.

The CHAIRMAN. And some of the issues that you were supposed

to handle for the AIC were enhanced business and economic development opportunities for Malaysian business interests?

Mr. BAGGETT. Yes, sir; we were told AIC represented a group of

Malaysian business interests who were seeking to improve the economic opportunities of their interests in the United States.

The CHAIRMAN. At that time, what was your understanding of

Michael Scanlon’s relationship with AIC?

Mr. BAGGETT. We were told that AIC had retained, or I would

assume retained, Michael Scanlon to assist in the public relations

efforts on behalf of the Malaysian business interests and would be

our contact for working with AIC.

The CHAIRMAN. Did either Abramoff of Scanlon ever tell you that

AIC was owned or operated by Michael Scanlon?

Mr. BAGGETT. No, sir.

The CHAIRMAN. Did they ever tell you that American International Center was paying money to Mr. Abramoff?

Mr. BAGGETT. No, sir.

The CHAIRMAN. What does the firm now understand the American International Center to be?

Mr. BAGGETT. A sham. To explain that, it is our understanding

now from information we have received and from our e-mails of the

firm and from other investigative sources that AIC was a front for

Mr. Abramoff and Mr. Scanlon to collect money.

The CHAIRMAN. Ms. Van Hoof, I take it that Mr. Scanlon proposed constructing a computer program and database for the tribe.

Ms. VAN HOOF. He did.

The CHAIRMAN. And how did he describe it and what benefits did

he say the tribe would get from it?

Ms. VAN HOOF. Well, at that time the tribe was deeply involved

in negotiations with the State for renewal of the compact. So as

part of its public affairs and grassroots campaign which would support the tribe’s efforts, Mr. Scanlon proposed the development of a

database which would identify those who would support the tribe’s

efforts at that time involving the compact, so that it could be

tweaked to support other efforts on behalf of the tribe as well at

later dates.
23

The CHAIRMAN. Was it your expectation that the actual cost of

the database would be a fraction of what you actually paid?

Ms. VAN HOOF. No, Senator; it was not.

The CHAIRMAN. Mr. Worfel, I understand you met with Scanlon

and Chris Cathcart in Washington to review the multi-million dollar database. What did they show you?

Mr. WORFEL. Senator, they showed me a computer screen with

names of Coushatta tribal vendors for our casino operations. They

showed me on the screen the people, how many employees they

had, how many people would vote, what parties they were affiliated

with, Republican or Democrat. That was just on a computer screen

right there.

The CHAIRMAN. What did Mr. Scanlon say he would do with this

database?

Mr. WORFEL. That is a good one. He said this here can help control the political future of the Coushatta Tribe in Louisiana. He

said you give us a body, we can elect a State Representative, a

State Senator, a Governor, because it had the precincts of each

voter base in the surrounding Parishes statewide, and he said we

had the voting results of the previous elections for the last 10 or

12 years.

He said you give us a body, and we can elect a Governor, a Senator, using your vendors, getting your vendors mobilized to call

these people and say, look, we do business with the Coushatta

Tribe; this is vendor business and they need your support; they

need somebody that would help them with their causes, with a new

compact coming up, those kinds of things.

The CHAIRMAN. Mr. Baggett, I understand that Greenberg

Traurig has a policy that employees should not receive income from

outside sources. Is that correct?

Mr. BAGGETT. Yes, sir.

The CHAIRMAN. And obviously Mr. Abramoff violated this prohibition by receiving money from Scanlon?

Mr. BAGGETT. Yes, sir.

The CHAIRMAN. Did anybody else violate the policy?

Mr. BAGGETT. Our investigation has found, and as we have informed Federal authorities and I believe this committee, we found

a number of other instances where members of Mr. Abramoff’s

team had received compensation outside of the firm.

The CHAIRMAN. What names?

Mr. BAGGETT. Sir?

The CHAIRMAN. And they were?
24

Mr. BAGGETT. We received, to my knowledge, and my knowledge

is not necessarily conclusive because I do not have Mr. Schulke’s

investigation report, Kevin Ring, Jon Van Horn, Michael Smith,

and I believe Stephanie Leger.

The CHAIRMAN. Mr. Van Horn was a shareholder in your firm?

Mr. BAGGETT. Yes, sir.

The CHAIRMAN. Mr. Baggett, would you take a look at exhibit

128. Exhibit 128 is an e-mail exchange dated January 17, 2002 between Jack Abramoff and Michael Scanlon, subject ‘‘Van Horn’’.

Mr. Abramoff writes, ‘‘I told him,’’ meaning Van Horn, ‘‘we would

kick him $20,000 from CCS when we score next. Let’s do so.’’ Mr.

Scanlon replies, ‘‘Cool. No problem here.’’

[Exhibit follows:]
25
26
27
28
29
30
31
32
33

The CHAIRMAN. Mr. Baggett, did either Mr. Abramoff or Mr. Van

Horn approach the firm about the legitimacy of this transaction?

Mr. BAGGETT. No, sir.

The CHAIRMAN. And there is another e-mail, exhibit 220, and it

says, there is an entry for a $20,000-payment to Jon Van Horn for

‘‘legal work.’’ For the record, according to bank records, that money

appears to have been paid out of Coushatta funds received by Mr.

Scanlon on January 18, 2002. Mr. Baggett, was Mr. Van Horn’s receipt of that $20,000 from Scanlon while a Greenberg Traurig employee a violation of firm policy?

Mr. BAGGETT. Yes, sir.

The CHAIRMAN. Mr. Worfel, I would like you to look at exhibit

182. Can we show that to Mr. Worfel please? There is a binder in

front of you. Would you look at it, exhibit 182. Maybe one of the

staff can help.

It is an e-mail that we are looking at there, Mr. Worfel. It is an

e-mail exchange between Mr. Abramoff and Mr. Van Horn. In it,

Mr. Abramoff writes, ‘‘Jon, please get me language asap which includes the Alabama Coushatta in the repeal of the anti-gaming provisions of the Reorganization Act. I believe we have come to terms

with them through Neil Volz. You and I might be the only ones

who will know about this on our side.’’

It appears that Mr. Abramoff and Mr. Van Horn were preparing

to help the Alabama Coushatta get legalized gaming in Texas. Is

that the way you read that?

Mr. WORFEL. Yes, sir.

The CHAIRMAN. What is your reaction to that?

Mr. WORFEL. Another way for these thieves to extort money from

us again. They are supposed to be looking after the best interests

of the Coushatta Tribe, receiving payments from our tribe to oppose gaming in Texas. Now they are here trying to help another

tribe or any gaming in Texas, which goes against any ethics that

they should stand by.

The CHAIRMAN. Ms. Van Hoof and Mr. Baggett, look at 183, if

you would, exhibit 183, an e-mail exchange between Mr. Abramoff

and Mr. Van Horn. If you look at the last page which is actually

the first e-mail in the exchange, Mr. Abramoff tells Mr. Van Horn,

‘‘the basic deal is that if we get them,’’ talking about the Alabama

Coushatta, ‘‘legal, they have to pay into a fund which we control

10 percent of their gaming revenue, which is the best approach

here. What is done with other percentage deals with tribes and we

will use those funds at our complete discretion.’’

Ms. Van Hoof, what is your reaction to Mr. Abramoff’s attempt

to represent the Alabama Coushatta to get legalized gambling?

[Exhibit follows:]
34
35
36
37

Ms. VAN HOOF. If this is true, Senator, then this would be a complete betrayal of the Coushatta Tribe.

The CHAIRMAN. Mr. Worfel, as you mentioned in your opening

statement, Mr. Abramoff wanted you to write a letter to the Louisiana congressional delegation in an attempt to derail this investigation and also suggested that the tribe not cooperate with the committee investigation. Is that true?

Mr. WORFEL. Very true, sir.

The CHAIRMAN. What did he say to you?

Mr. WORFEL. He said if we should write a letter to congressional

delegates of Louisiana to stop the committee’s investigation because we had sovereign immunity and First Amendment rights. He

wanted me to do that. I would not do it, and now I know he wanted

me to take the bullet and him sit back and just relax.

The CHAIRMAN. I just have a few more questions.

Ms. Van Hoof, if you look at exhibit 99, it is an e-mail from Mr.

Scanlon to you. Attached are invoices, one purportedly from Greenberg Traurig for $1 million for ‘‘public affairs services.’’ Ms. Van

Hoof, was it your understanding that the $1 million was going to

be used for political activities benefitting the tribe?

Ms. VAN HOOF. Yes.

The CHAIRMAN. Did the tribe authorize anyone to use that $1

million as a charitable contribution to the Capital Athletic Foundation?

Ms. VAN HOOF. No.

The CHAIRMAN. Did the tribe ever intend to make a $1 millioncontribution to Jack Abramoff’s personal charity?

Ms. VAN HOOF. No.

The CHAIRMAN. Mr. Baggett, was Capitol Campaign Strategies a

Greenberg Traurig public affairs entity?

Mr. BAGGETT. No, sir; we had no interest in Capitol Campaign

Strategies.

The CHAIRMAN. So Mr. Scanlon’s statement is not true.

Mr. BAGGETT. Yes, sir.

The CHAIRMAN. Was Mr. Scanlon authorized to send an invoice

on Greenberg Traurig’s behalf?

Mr. BAGGETT. No, sir; he was not.

Mr. Chairman.

The CHAIRMAN. Go ahead please.

Mr. BAGGETT. If I might point out——

The CHAIRMAN. Please go ahead.

Mr. BAGGETT. ——the invoice exhibit 99 purporting to be from

Greenberg Traurig, ‘‘Greenberg’’ is misspelled.

The CHAIRMAN. Okay. That is an important point. Thank you for

bringing it up, Mr. Baggett. [Laughter.]

Mr. BAGGETT. I doubt we would be issuing an invoice with our

name misspelled.

The CHAIRMAN. Yes; got you. Thank you.

To be clear, the $1 million was not treated as income by Greenberg Traurig.

Mr. BAGGETT. No, sir; it was not.

The CHAIRMAN. And it was not treated as a charitable contribution by Greenberg Traurig.

Mr. BAGGETT. No, sir; it was not.
38

The CHAIRMAN. One other thing, Mr. Baggett. What did Mr.

Abramoff tell you about his skyboxes?

Mr. BAGGETT. Mr. Abramoff told us that the skyboxes were

leased by various Indian tribes.

The CHAIRMAN. Among other things, for Redskins games?

Mr. BAGGETT. Yes, sir; for Redskins games. The skyboxes were

leased by the Indian tribes; that he had certain personal expenses

for personal use of them, but that they were not in his name nor

were they ever in the firm’s name.

[Exhibit follows:]
39
40
41
42

The CHAIRMAN. Thank you very much.

Senator Dorgan.

Senator DORGAN. Mr. Chairman, thank you very much.

Mr. Baggett, you just referred to invoice 99, which on the top says ‘‘Greenberg Traurig, $1 million, payable upon receipt.’’ The

word ‘‘Greenberg’’ is misspelled, and you called that to our attention. I assume you feel this is a fraudulent invoice?

Mr. BAGGETT. Yes, sir; we had no knowledge, and speaking on

behalf of Greenberg Traurig, we had no knowledge of this invoice

being sent.

Senator DORGAN. You have looked, and no one in the firm has

ever seen this or understands it as part of the firm. So you believe

this is a fraudulent invoice?

Mr. BAGGETT. Yes, sir.

Senator DORGAN. All right.

Mr. Worfel, let me clarify just for 1 moment. Did Mr. Abramoff

suggest to you that you need not and should not cooperate with

this committee?

Mr. WORFEL. Yes, sir; Mr. Dorgan. He said we had sovereign immunity and First Amendment rights so we should not cooperate

and the letter would go to the congressional delegation to stop the

investigation.

Senator DORGAN. So he was suggesting you should not cooperate

with this committee. You were approached by Mr. Scanlon, by two

attorneys on behalf of Mr. Scanlon, asking you to sign some documentation after this committee indicated that the investigation was

ongoing. What kind of documents?

Mr. WORFEL. It was documents saying that Mike Scanlon did a

good job for us, and at the time, that was before we really knew

of any fraud committed against our tribe. I just assumed that they

were doing the right thing. That was done at Lake Charles, LA. I

picked him up at the airport. We did a couple of statements and

then took him back, and that is the last I have seen of him until

I saw one of them in here this morning.

Senator DORGAN. All right.

Ms. Van Hoof, let me go through a couple of e-mails with you,

if I might, that are part of the record. Number 29 is a March 28,

2001 cover sheet that refers to an e-mail in which you wrote that

the Coushatta had agreed to pay one-half the cost of a poll requested by the Secretary of the Interior for CREA. Can you elaborate on that just a bit, and what your understanding of this was?

Ms. VAN HOOF. This was in March 2001, Senator. I truthfully do

not remember the details, but there would have been normally

some type of written proposal made to the tribal council or perhaps

an in-person visit from the tribal council. There might have even

been an e-mail exchange between myself and Mr. Abramoff explaining the details of this poll and why the request was being

made to the tribe.

Senator DORGAN. The cover sheet which is on the monitor says

‘‘attached is an e-mail from Jack Abramoff with the firm of Greenberg Traurig, recently retained by the tribe for assistance in government affairs. The Coushatta and the Mississippi Band of Choctaw have agreed to each pay one-half the cost of a poll conducted

by the council for Republican Environmental Advocacy, which is
43

being conducted on behalf of Gale Norton, Secretary of the Interior.’’

[Exhibit follows:]
44
45

Ms. VAN HOOF. Yes, sir; the e-mail is not attached as part of the

exhibit, though, and I am assuming the e-mail probably gave a

greater description. Other than this, I do not recall.

Senator DORGAN. All right. Thank you.

Mr. Worfel, are you familiar with any of this?

Mr. WORFEL. No; all I am familiar with is the $50,000 donation

was supposed to go a national park study. The Department of the

Interior, we were told the Department of the Interior would look

at the Coushatta Tribe as friends if we would help them, and the

Choctaw was to donate 50 percent also.

Senator DORGAN. Ms. Van Hoof, if we can go to exhibit 100, that

describes a strategy. It is a memorandum from Michael Scanlon in

which he proposed a $3.1-million battleground program to fight off

two potential gaming competitors. For $150,000, Mr. Scanlon in this memo described how the program would mobilize individuals to unwittingly protect casino revenues of the Coushatta. He says, ‘‘simply put, we want to bring out

the wackos to vote against something and make sure the rest of the

public lets the whole thing slip past them. The wackos get their information from the Christian right, Christian radio and mail, the

internet and telephone trees.’’

Do you recall this proposal and, if so, was the proposal engaged?

Was it successful? Who was he referring to as ‘‘wackos’’? Do you

have any knowledge of this?

[Exhibit follows:]
46
47
48
49
50

Ms. VAN HOOF. I recall that the council received this and many

proposals from either Jack Abramoff or Mike Scanlon. I do not recall whether all or part of it was accepted, but the council was definitely interested in monitoring and protecting itself against gaming

threats.

Senator DORGAN. In previous hearings and in documents for this

hearing, we have seen all this evidence of moving money around

through, among other, entities 501(c)(3)s and 501(c)(4)s in order to

obscure the identity of the money. Money was paid to Ralph Reed’s

organization, which we have seen in document trails in previous

hearings. When the Coushatta Tribe agreed with Mr. Abramoff to

hire Mr. Reed’s organization for its grassroots efforts, what arrangements were made to pay him, Ms. Van Hoof?

Ms. VAN HOOF. As I recall, Mr. Abramoff requested that a direct

payment not be made from the Coushatta Tribe, who would be recognized as an Indian gaming tribe, to a conservative group associated with the Christian Coalition or other conservative groups,

even though their interests were aligned in this instance, which

was to oppose the expansion of gaming.

Senator DORGAN. So how did the money flow?

Ms. VAN HOOF. If I remember correctly, Mr. Abramoff asked if

the tribe had another entity through which the payment could be

made? The tribe did not. A tribal friend indicated that he did, and

that he would make the payment so long as he was reimbursed by

the tribe, and that is my understanding of how the payment was

made.

Senator DORGAN. Mr. Worfel, is that your understanding as well?

Mr. WORFEL. Yes; the payment was made to Ralph Reed. I mean,

it was going to Ralph Reed. That was done with the whole council

approving it. The council sat there and they approved it. If they got

amnesia, I cannot explain that, but it was done in a council meeting.

Senator DORGAN. Was Mr. Reed aware of where the money was

coming from?

Mr. WORFEL. I cannot say if Mr. Reed did. I do not want to speculate, but he should know.

Senator DORGAN. Who was the friend? You said someone in the

tribe had a friend and so the money moved through a friend?

Ms. VAN HOOF. Members of the tribal council had a friend whose

name was Aubrey Temple. It was through one of his companies

that the payment was made.

Senator DORGAN. Was it made directly, then, through only one

company? There are examples of it moving through two or three

entities.

Ms. VAN HOOF. If my memory is correct, I think a wire transfer

was made from the Coushatta Tribe to the entity owned by Mr.

Temple, and then Mr. Temple made the payment.

Senator DORGAN. Excuse me for interrupting. Is that a for-profit

entity or a nonprofit entity?

Ms. VAN HOOF. I do not know anything about the entity.

Senator DORGAN. Let me ask about the contributions to CREA.

In e-mail traffic, and Mr. Griles will be testifying later today in another panel, but there is so much on the record I will go to exhibits

29, 24 and then 37, and ask you about them. These are documents
51

that are on the public record now that describe a relationship alleged by Ms. Federici, with Mr. Griles, and also by Mr. Abramoff.

Let me read these to you, if I might. Go to 24 if you would first.

In an e-mail on March 22, Mr. Abramoff writes that he ‘‘met with

the Interior guys today and they were ecstatic that the tribe was

going to help. If you can get me a check via Federal Express made

out to the Council of Republicans for Environmental Advocacy for

$50,000, that would be great. This is really going to help.’’

[Exhibit follows:]
52
53

Senator DORGAN. What was your understanding of what this was

going to help with? And who was Mr. Abramoff, do you believe,

claiming to be meeting with at this point?

Ms. VAN HOOF. This is in March 2001, and I am not sure if I

have my dates correct. I am not sure if this had to do with the polling or not. Further e-mails might better reflect what this actually

represented.

Senator DORGAN. There were two checks made to CREA. Is that

correct? Were there two payments or three payments made to

CREA?

Mr. WORFEL. I know of one.

Senator DORGAN. For $150,000?

Mr. WORFEL. The one I know was $50,000.

Senator DORGAN. I believe the record to show that there were

two payments for a total of $150,000. Ms. Van Hoof, you are correct, there was an attachment to one of the payments that it was

going to be, helping to pay for a survey that the Interior Secretary

allegedly wanted done.

I think, Mr. Worfel, you answered you were unaware of any survey ever being done; you never received a survey, right?

Mr. WORFEL. Correct. Never have.

Senator DORGAN. Exhibit No. 37. In an e-mail to you, Ms. Van

Hoof, Mr. Abramoff references Deputy Secretary Griles as the fellow who we helped with the CREA project. What did he mean by

that?

Ms. VAN HOOF. No. 37?

Senator DORGAN. I have document No. 37. It is dated April 5,

2001.

[Exhibit Follows:]
54
55

Ms. VAN HOOF. I do not recall, Senator. I have not reviewed this

e-mail in preparation for testimony today. I am sure I knew at the

time.

Senator DORGAN. First, let me go to Mr. Baggett quickly. Mr.

Baggett, the chairman of the committee appropriately, I think, said

at the start of this hearing in his opening statement that your firm

has been cooperative with this committee, I believe in every way,

in our requests for documents and response to the subpoenas and

so on.

So we appreciate that, but I think it is important to ask, at that

period in the firm when this occurred, what kind of culture existed

that it was allowed to occur. Was there a spectacular lack of management or oversight of particularly Mr. Abramoff?

Mr. BAGGETT. Senator, our firm is a large national firm that

makes no excuse for anything. The shareholders and attorneys of

our firm and the non-attorney professionals such as Mr. Abramoff

are all held to a strict code of professional responsibility that applies to all lawyers and to our own policies and procedures of the

firm.

We expect each shareholder, each director, as Mr. Abramoff was,

to honor those responsibilities. We, and I do not believe any professional services firm has the ability to micro-manage the day-to-day

activities of their members. What Mr. Abramoff did was important

to us. What he did he did without our knowledge. He is an amazingly gifted person at having two sides to him.

When you meet with Mr. Abramoff in a professional environment, he is a most responsible-sounding person. In fact, one of the

attractions that we had to Mr. Abramoff was his discipline and organization in the lobby practice. Very few lobbyists that I have

seen in my career have the kind of accountable discipline that Mr.

Abramoff required of his teams.

We were probably more shocked than anyone could be to find

what we found. We have the policies. We have the codes. We have

the responsibilities. This was an intentional act of deception by Mr.

Abramoff on the clients, on us, and on everyone he dealt with.

Senator DORGAN. Mr. Baggett, we did not see the gifts you described. When Mr. Abramoff was called before this committee, he

took the Fifth Amendment.

Mr. BAGGETT. That is true.

Senator DORGAN. So we do not know of that which you described

about the other side of this fellow.

I want to ask about two additional points. This relates to an Associated Press story of Tuesday, June 21, 2005. It relates to money

that apparently, Ms. Van Hoof, you would have been aware of, a

contribution for activities that were arranged by Americans for Tax

Reform for a White House gathering. Can you tell us about that

$25,000 contribution as described in the Associated Press in June?

Ms. VAN HOOF. I do not remember that particular article, but I

can tell you about the contribution made and why it was made.

When Mr. Abramoff and Mr. Scanlon were hired by the tribal council, the extreme focus at that point was on renewal of the compact

with the State of Louisiana and establishing a strong PR campaign

and grassroots campaign that would support that effort. It was a

very concentrated, focused effort for that reason.
56

The tribe had had successful lobbying relationships in years past

with prior Administrations with great success, but did not have, as

we understood it, the same type of relationship with the new Administration. So one of the things that Mr. Abramoff offered was

opportunities to meet and greet, establish name recognition for the

tribe, provide a photo opportunity, make political contributions,

and this was one of those occasions.

We were in the midst of a very heated compact negotiation process. It was a great press release to be able to say that the chairman had met with the President during that period of time. This

particular organization was also a conservative organization, and

at the meeting they really did meet and discuss tax reform issues.

I think the tribal council in support of that effort did perhaps after

that pass a resolution in support of tax reform initiatives.

Senator DORGAN. Ms. Van Hoof, there is actually, I think, an activity on the part of the tribe to do so, as a result of being asked

to go to the meeting. The $25,000 contribution, where did that go?

Ms. VAN HOOF. As they usually did, Jack Abramoff presented

this as an opportunity for the tribe to contribute. I do not recall if

it was called sponsoring or hosting the event, but it was a contribution made to that organization.

Senator DORGAN. Which organization?

Ms. VAN HOOF. To Americans for Tax Reform.

Senator DORGAN. And one final point. We have talked a lot about

the political contributions that have been made and the money that

was described here. I want to correct the record. The Associated

Press article I was referring to about that particular issue was a

June 8 Associated Press story.

There is a June 21 Fox Newsstory that talks about, $55,000 in

contributions that had been written and then returned to a member of the leadership in the House, and had been requested to be

diverted to other organizations. Can you describe that?

Ms. VAN HOOF. No, sir; I cannot. At that time, the tribal council

was following the advice of Mr. Abramoff and if Mr. Abramoff made

a suggestion, they trusted his advice and followed it.

Senator DORGAN. Mr. Worfel.

Mr. WORFEL. Sir.

Senator DORGAN. Are you aware of that?

Mr. WORFEL. I cannot recall that, sir.

Senator DORGAN. I will submit written questions on that to the

witnesses.

Mr. Chairman, I think that is all I have for these witnesses at

this time. I would like to ask if we could submit written questions.

The CHAIRMAN. Without objection. Maybe soon you will receive

some written questions. I thank the witnesses and I appreciate

your testimony. It has been very helpful and you are dismissed.

The next panel is B.R. McConnon, president, Democracy Data

and Communications; Christopher Cathcart, former associate, Capitol Campaign Strategies; and Gail Halpern, Jack Abramoff’s

former tax adviser. Welcome.

We will begin with you, Mr. McConnon.
57

STATEMENT OF B.R. MCCONNON, PRESIDENT, DEMOCRACY

DATA AND COMMUNICATIONS

Mr. MCCONNON. Thank you and good morning, Mr. Chairman

and honorable members of this committee.

My name is Bernard R. McConnon, III. I am the founder and

CEO of Democracy Data and Communications, commonly referred

to as DDC. Before I begin, I wish to note for the record that I am

appearing here voluntarily at the request of this committee.

DDC is a leading provider of grassroots impact database management services, and website and communications programs to the

public affairs market. Among our products is Democracy Direct, a

proprietary relational database management application which we

offer under an application service provider model. The Democracy

Direct system allows clients to catalog an immense amount of information about their stakeholders and other assets, and then

search, sort and segment that information in complex ways to facilitate more effective and efficient communication efforts on legislative and regulatory issues.

Our client list includes a majority of the Fortune 100, many of

the largest trade and professional associations, and several of the

country’s largest membership organizations as well. In 2001, DDC

was hired by Capitol Campaign Strategies and later by Scanlon

Gould to first provide data warehousing and then online database

management services for several Indian tribes, including the Louisiana Coushatta.

I understand from your staff that the committee has some questions regarding our contract with CCS and I am happy to answer

them at this time.

The CHAIRMAN. Thank you very much.

Mr. Cathcart.

STATEMENT OF CHRISTOPHER CATHCART, FORMER ASSOCIATE, CAPITOL CAMPAIGN STRATEGIES, ACCOMPANIED BY

CHARLIE LEEPER, ESQ.

Mr. CATHCART. Good morning, Mr. Chairman, Senator Dorgan. I

am joined here today by Charlie Leeper, an attorney with Spriggs

and Hollingsworth.

Since at least as early as September 2004, I have been cooperating with the committee staff investigators by answering questions

and responding to inquiries regarding work performed by my

former employer, Capitol Campaign Strategies and its affiliated

companies collectively, CCS, for and on behalf of various tribal clients.

For example, on September 21, 2004 I was interviewed by committee investigators Pablo Carrillo and Katherine Rossi. On that

occasion, I responded to each and every question posed by Mr.

Carrillo and Ms. Rossi. Those questions pertained to numerous aspects of the work performed by CCS for its tribal clients, including

the Saginaw Chippewa Indian Tribe of Michigan, the Agua

Caliente Band of Cahuilla Indians, and the Tigua Indians of Ysleta

del Sur Pueblo, as well as various other matters.

Similarly, on November 4, 2004, I was interviewed by committee

investigators Pablo Carrillo, Bryan Parker, and Katherine Rossi.

On that occasion, I responded to each and every question posed by
58

Messrs. Carrillo and Parker and by Ms. Rossi. Those questions pertained to numerous aspects of the work performed by CCS for its

tribal clients, principally the Tigua Indians of Ysleta del Sur Pueblo, as well as to various other matters.

On May 5, 2005, I was once again interviewed by committee investigators Pablo Carrillo, Bryan Parker and Katherine Rossi. On

that occasion, I responded to each and every question posed by

Messrs. Carrillo and Parker and by Ms. Rossi. Those questions pertained to numerous aspects of the work performed by CCS for its

tribal clients, including the Mississippi Band of Choctaw Indians

and the Saginaw Chippewa Indian Tribe of Michigan, as well as to

various other matters.

In all, I estimate that I have submitted to approximately 15

hours of questioning. Furthermore, I responded verbally and in

writing through counsel to all follow-up inquiries posed by committee counsel. I have done this as a result of my respect for this committee and its objectives.

Recently, I was made aware of a request from the committee investigators to make myself available to answer inquiries regarding

work that CCS performed for the Coushatta Tribe of Louisiana.

Even though I no longer reside in the Washington, DC metropolitan area, I offered, through my counsel, to accommodate this request by traveling to Washington at my own expense to appear for

a further interview on Saturday, October 15, 2005, and at that

time to answer any and all questions the committee investigators

may have regarding the Coushatta Tribe of Louisiana.

I am informed that the committee investigators rejected my offer

to appear for an interview and instead insisted that I give a deposition where the questions and answers would be then transcribed by

a court reporter. Through my counsel, I declined to provide a deposition, but I am appearing voluntarily at this hearing today.

I am aware that the U.S. Department of Justice is conducting a

criminal investigation of events relating to lobbying and other professional services rendered on behalf of various Native American

groups, including certain services provided by CCS for and on behalf of the tribal clients identified above. I understand that as a

former CCS employee, I am a witness to certain events within the

scope of the DOJ investigation and I am in possession of information that could further the objectives of that investigation.

I further understand that it may be inconsistent with those objectives for me to submit at this time to a deposition or transcribed

questioning conducted by individuals other than DOJ investigators.

With all respect, such a deposition or transcribed questioning by

the committee investigators may give rise to ambiguous circumstances that could jeopardize my position as a witness in that

ongoing investigation.

Given these circumstances and having considered the U.S. Supreme Court ruling in Ohio v. Reiner that the fifth amendment of

the U.S. Constitution protects the innocent who might be ensnared

by ambiguous circumstances, I accept the advice of my legal counsel and respectfully and regretfully will decline to answer questions

at any hearing, deposition or transcribed interview conducted by

the committee and/or its staff on the basis of the rights guaranteed

to me by the fifth amendment.
59

The CHAIRMAN. Thank you.

Mr. Cathcart, my understanding is that your response to any

question from the committee at this time would be an assertion of

your legitimate fifth amendment rights. Is that correct?

Mr. CATHCART. That is correct.

The CHAIRMAN. Thank you.

Ms. Halpern.

STATEMENT OF GAIL HALPERN, JACK ABRAMOFF’S FORMER

TAX ADVISOR

Ms. HALPERN. Thank you, Mr. Chairman, Mr. Vice Chairman,

and members of the committee.

My name is Gail Halpern. I am a part-time accountant. I am a

certified public accountant and a personal financial planner.

Mr. and Mrs. Abramoff were my clients from early 1997 until

September 2004. I knew Mrs. Abramoff on a social basis and she

asked me sometime in early 1997 to be her and Mr. Abramoff’s accountant and prepare their personal income tax returns. The following is a general description of the services I performed for the

Abramoffs.

I prepared Mr. and Mrs. Abramoff’s personal income tax returns

from the 1996 tax year until the 2002 tax year, inclusive. I prepared gift tax returns for Mr. and Mrs. Abramoff when required

during this time as well. I prepared their children’s income tax returns and I prepared trust income tax returns for the Jack and

Pamela Abramoff family, up to and including the 2003 tax year as

required.

I prepared personal and trust tax returns based on information

provided by Mr. and Mrs. Abramoff or by those authorized to provide such information on their behalf, namely Mr. Abramoff’s office

at Preston Gates or later at Greenberg Traurig, or Mr. Abramoff’s

business office. I did not prepare any corporate, partnership or tax

exempt entity returns, as I am not an expert in those areas of the

law. Those returns were prepared by other competent accountants.

Upon their request, I provided some tax planning advice to Mr. and

Mrs. Abramoff within my limited areas of expertise.

I also provided some estate planning advice and some financial

planning advice to Mr. and Mrs. Abramoff as requested by them.

I also answered general accounting and tax questions from the

Abramoffs or from other authorized people in Mr. Abramoff’s offices

as mentioned earlier. Any questions that I was not able to answer,

such as questions that were specific to a certain area of accounting

or law, I referred to attorneys or accountants who practiced in that

area of accounting or law.

Mr. or Mrs. Abramoff made all of the decisions. For Mr.

Abramoff’s daily checking account and for some of his business entities, I worked with Mr. Abramoff’s business office to help implement a bookkeeping software package that required them to input

all the information required for me or for others to prepare tax returns. I did not keep the books or prepare the books for Mr.

Abramoff’s daily checking account, business entities, or for any of

the non-profit entities that he started.

Rather, my role was to answer questions or refer him to specialists who could answer questions when such questions were posed
60

by Mr. Abramoff or by the bookkeeping personnel or staff. The day

to day bookkeeping work was done by others. I was not an employee, officer, director or member of any of Mr. Abramoff’s entities.

Instead, I am an independent accountant and I serve other clients

besides the Abramoffs.

The tax returns that I prepared and any tax, estate and financial

planning services that I rendered were based on information provided to me by Mr. or Mrs. Abramoff or by personnel in Mr.

Abramoff’s offices mentioned earlier. To the best of my knowledge,

and based upon the information that they provided to me, all income received by the Abramoffs or their children or their family

trust for which I prepared income tax returns was reported and included in the relevant tax returns.

Thank you.

The CHAIRMAN. Thank you very much.

Mr. McConnon, your business, as you mention, is to build databases so that people can send out e-mails, communicate with voters, et cetera. Right?

Mr. MCCONNON. That is correct.

The CHAIRMAN. Mr. Scanlon apparently told the Louisiana

Coushatta Tribe and other tribes that his company built your database. Is that correct? Is that your understanding?

Mr. MCCONNON. That is my understanding, yes.

The CHAIRMAN. And ended up charging the Coushatta Tribe and

other tribes millions of dollars for it. Too bad you did not get in

on that, huh Mr. McConnon?

In fact, there was not a lot of activity on the account, was there?

Mr. MCCONNON. After an initial period of time when we set the

system up, which was in 2001, the contract lasted through 2000

and ended in 2003, and there was substantial drop-off in activity

after the initial set up of it.

The CHAIRMAN. Your company built, updated, and maintained

the database. Is that right?

Mr. MCCONNON. Yes; it is important to note that when talking

about the database, that there are two ways that that term can be

used. One is to describe the system itself, the Democracy Direct

system in this case that I am talking about, which is the application. There is also the data that goes into the application that is

derived from a lot of different sources.

The CHAIRMAN. The work you did paid you about $104,000? Is

that roughly correct?

Mr. MCCONNON. That is right.

The CHAIRMAN. They created a database basically that was less

capable than yours?

Mr. MCCONNON. At some point, I believe what you are referring

to is at some point with tribes other than those that we were working for through CCS and Scanlon Gould, apparently at some point

CCS or Scanlon Gould began to offer their own version of a similar

system to other tribes.

The CHAIRMAN. That was less capable than yours?

Mr. MCCONNON. From what I have been shown, yes, far less.

The CHAIRMAN. Mr. Scanlon charged the Pueblo Sandia Tribe $1

million for that database. Are you aware of that?

Mr. MCCONNON. I was not, no.
61

The CHAIRMAN. Do you think the database was worth anything near $1 million?

Mr. MCCONNON. From what I have seen, no.

The CHAIRMAN. We are told by other witnesses it was really worth about $20,000. Is that a good estimate?

Mr. MCCONNON. That is probably in the neighborhood.

The CHAIRMAN. Do you have a theory as to how those databases

were probably designed?

Mr. MCCONNON. From what I have seen, the databases that were

offered to the other tribes, the part that is visible to the tribes, the

screen as was described earlier, is strikingly similar to a portion

of our system that was being licensed for the first set of tribes.

The CHAIRMAN. Like reverse engineering?

Mr. MCCONNON. Like reverse engineering.

The CHAIRMAN. Mr. Cathcart negotiated the contract with your

company on Mr. Scanlon’s behalf. Is that correct?

Mr. MCCONNON. That is correct. Well, the initial contract involved Mr. Cathcart, Mr. Scanlon, myself, and other people on my

staff. There were subsequent contracts that were negotiated by

Chris with other people on my staff.

The CHAIRMAN. Mr. Cathcart seemed to be the one who was running operations for Mr. Scanlon. Is that correct?

Mr. MCCONNON. From interaction with our firm, yes.

The CHAIRMAN. Mr. McConnon, you have conducted business

with lots of lobbying shops and other similar organizations. How

common is it for a grassroots firm to pay referral fees for businesses brought to it by a lobbyist?

Mr. MCCONNON. In my experience, it is not done. My understanding is that lobbyists cannot receive referral fees for business

that their clients are doing.

The CHAIRMAN. Mr. Cathcart, while working for Mr. Scanlon, I

understand you were very handsomely compensated. In fact, you

started off with a salary of $44,000 plus an additional $35,000

bonus in 2001. By 2003, you received a salary of $105,000 and a

bonus of $390,000. Do you wish to comment on how you merited

such generous compensation from Mr. Scanlon?

Mr. CATHCART. Mr. Chairman, regrettably I have to stand by my

statement.

The CHAIRMAN. Ms. Halpern, while working for Mr. Abramoff as

his tax advisor, you provided, when asked, tax advice on the Capital Athletic Foundation. Correct?

Ms. HALPERN. Correct, sir.

The CHAIRMAN. In the course of your employment with Mr.

Abramoff, did you ever observe the Capital Athletic Foundation engaging in activity inconsistent with its own tax exempt mission?

Ms. HALPERN. Based on my limited knowledge of the tax law in

the tax exempt areas, and based on the limited knowledge that I

have of the Capital Athletic Foundation, I am not aware of any activities that it engaged in that would negate the tax law.

The CHAIRMAN. In 2001, the Capital Athletic Foundation claimed

that the Louisiana Coushatta Tribe was the single largest contributor with a payment of $1 million. As has already been testified, the

tribe never intended to make a contribution to the Capital Athletic

Foundation. Mr. Scanlon told the tribe its $1 million was going to
62

go to Greenberg Traurig for grassroots activities. Did Mr. Abramoff

tell you anything about that purported $1 million donation?

Ms. HALPERN. I found out about the $1-million donation after the

fact, that is, after it occurred sometime. In trying to recollect what

happened, Mr. Abramoff has an internal accountant who kept the

books of the Capital Athletic Foundation and he booked this contribution income.

The CHAIRMAN. Do you know the name of that accountant?

Ms. HALPERN. David Pierce. I believe he was preparing the 2001

books at some time in 2002. Okay? In other words, let me give you

a little bit more background to give you a better understanding.

Mr. Abramoff had a business office. This business office did not

startup, did not have employees running it until sometime early in

2002. During 2001, Mr. Abramoff had a very close associate at

Greenberg who maintained, to the best of my knowledge at least,

maintained these types of transactions for him.

The CHAIRMAN. Who was that?

Ms. HALPERN. That person’s name is Mr. Rodney Lane.

Therefore, when I am saying I found out after the fact, it is not

like someone lifted up the telephone and said to me, you know,

Gail, we just got $1 million in. I was looking at the QuickBooks

that Mr. Pierce had prepared. First, the QuickBooks did not have

that donation recorded, and then it had it recorded, I believe, as

a donation from Mr. Abramoff.

I said to Mr. Pierce, you know, I think Mr. Abramoff would tell

me if he made a $1-million donation and I do not see it coming out

of his personal account. So can you please research this and tell me

if you have it correct. He went back and researched this entry that

he did, and he said, I apologize; I made a mistake. It came from

a Coushatta Tribe. That is, the $1 million came from a Coushatta

Tribe.

At that point, trying to recollect what happened, I said, okay, you

know, correct the books to properly show whatever it is you are

saying it did. And I would say it was approximately November

2002 when the 2001 tax return was being prepared by the tax accountants. I said to Mr. Abramoff, I believe it is an e-mail which

I have submitted to your committee, I just want to touch base with

you again about this $1 million. I say, ‘‘again’’, because of whenever

it was that I initially found out about the contribution and Mr.

Pierce said, no, it is not from Mr. Abramoff, it is from Coushatta.

At that point, I said to Mr. Abramoff, I just want to make sure

that this is correct information and that this income is not your income nor can it be construed as your income, because if it can be

construed as your income, it is not a charitable donation. It is your

earned income. And Mr. Abramoff assured me that this was a donation from a tribe.

Just to back up to where I started off, in November 2002, just

before he signed the tax return, I repeated my information to him

again, saying I just wanted to make sure because this is what you

told me back when I found out about the contribution. I just want

to make sure that all this information in the tax return is correct,

and I am faxing to you that page of the tax return that lists contributors.
63

Private foundations list contributors of $5,000 or greater. This

document is a public document. It is displayed on the Internet. You

or I could go on the Internet and look and see who contributed to

what foundation. It is not hidden information. It is totally disclosed.

In addition, the private foundation also maintained a disclosure

copy of the tax return in their business office. They maintain a

copy of this tax return at their business office. So I faxed the form

to Mr. Abramoff that shows the contributors and he looked at it,

and he got back to me and, apparently the forms listed a different

Coushatta Tribe. There is another Coushatta Tribe that is not from

Louisiana; Mississippi perhaps. The form had Mississippi

Coushatta, and Mr. Abramoff said this is wrong. This contribution

is from Louisiana Coushatta.

So I said, okay, and I went back to Mr. Pierce, the internal accountant, and I told him what Mr. Abramoff said. I said, you know,

how can this happen? How are you documenting what took place

here? Where are you getting your information from? He apologized.

He made a mistake. He saw Coushatta Tribe on whatever paper

trail came into the office and he just assumed it was another

Coushatta Tribe, not Louisiana.

It certainly to me seemed like he just made an innocent mistake.

I informed the tax accountants what Mr. Abramoff said that it was

Louisiana Coushatta and please correct the information on the return. And that page was corrected, and when Mr. Abramoff signed

the return, it documented that Louisiana Coushatta contributed $1

million.

The CHAIRMAN. Does that change the underlying problem here?

Ms. HALPERN. Sir, I am just telling you the events that took

place. I am not changing any problem.

The CHAIRMAN. As a tax advisor you would advise him about

CAF. It was established by Mr. Abramoff in 1999. Is that correct?

Ms. HALPERN. Yes, sir.

The CHAIRMAN. All decisions were made by Mr. Abramoff and

possibly his wife. Is that correct?

Ms. HALPERN. To the best of my knowledge, the decisions I remember were made by him. I cannot recall his wife making any decisions on it.

The CHAIRMAN. Being familiar with the profit-loss statements

and e-mails associated with CAF, you can confirm that from 2001

to 2003, the Eshkol Academy, the all-boys Yeshiva started by

Abramoff in 2001, was the primary beneficiary of the CAF. Is that

correct?

Ms. HALPERN. It was a substantial beneficiary. Yes, sir.

The CHAIRMAN. And from 2001–03, many of the top recipients of

distributions made by the CAF at Mr. Abramoff’s direction had significant ties to Mr. Abramoff. For example, in 2002 Mr. Abramoff

had a personal connection to Pitach, a special Jewish school, Kollel

Ohel Tiferet, which appears to be a sham organization designed to

funnel, in your own words, Ms. Halpern, ‘‘spy equipment and other

military expenses’’ totaling $97,000 to a sniper workshop in Israel.

Ms. Halpern, the person who apparently ran the sniper workshop, Shmuel Ben Zvi, is a close friend of Mr. Abramoff. Is that

correct?
64

Ms. HALPERN. I believe they are friends. I do not know the extent

of that relationship.

The CHAIRMAN. Toward Tradition a non-profit educational organization received $10,000 from the CAF and the president of this

organization, Rabbi Daniel Lapin, is a close friend and business associate of Mr. Abramoff. Isn’t he?

Ms. HALPERN. I believe they are associates. I am not sure of the

relationship.

The CHAIRMAN. Let’s go back to the Eshkol Academy, the CAF’s

top beneficiary from 2001–03. For 1 year, Mr. Abramoff instructed

you to reduce the amount of his charitable contribution to the CAF,

instead of paying tuition for at least one of his children. Is that correct?

Ms. HALPERN. Yes; and that occurred after, every year I looked

at Mr. Abramoff’s personal checkbooks and if it ever came to my

attention that he did not pay tuition for his children, I told the assistants that were responsible at that time, and 1 year Mr. Lane

was responsible and another year it was the other people in the

business office, which was Mr. Pierce. I specifically said that Mr.

Abramoff must pay tuition like everybody else and please make

sure that you do so from his personal account.

Now, 1 year when I found out after the fact that the tuition was

not paid, it was apparently an oversight by his business office, at

least that is what I am told. And Mr. Abramoff instead of taking

a full deduction on his personal tax return for what he contributed

to the foundation, he reduced his deduction on his personal tax return by that amount that is allocated to tuition. So that way, it

was made sure that he paid tuition for his children just like everybody else.

The CHAIRMAN. Would you refer to exhibit 219 for me please? It

is an e-mail from you to Jack Abramoff.

Ms. HALPERN. Yes, sir.

The CHAIRMAN. Part of the e-mail says, ‘‘but let’s try to square

it out in a way where we do not screw up the foundation. We need

to get the money to a 501(c)(3) or an educational institution, not

directly to him. Can you ask him if he can work something out

within kollel so the money goes from the kollel,’’ I am not sure I

am pronouncing that word right, ‘‘to him.’’ ‘‘Him’’ I think, is referring to Mr. Zvi. Is that right?

Ms. HALPERN. I would have to review this whole e-mail in context, but it appears from where you are reading, I did not see

where you are reading from, but it appears that what you are saying is correct, sir.

The CHAIRMAN. And you go on to say in your e-mail, ‘‘if he can’t,

then I need to sit down and have him make amendments in grant

procedures and all kinds of other stuff to make this legit from a

tax point of view. I already need to talk with Mac about the skating rink, so let me know what Shmuel says about getting money

to a kollel, and if it will not work, then I will add this to the list.’’

It seems to me, Ms. Halpern, from your e-mail here that you

must have known that some of this money was going to purchase

paramilitary equipment.

[Exhibit follows:]
65
66
67
68

Ms. HALPERN. Mr. Chairman, I realize you are picking out one

e-mail in a series of many correspondences and conversations that

were had. So if you don’t mind, I would like to explain to you in

context when this e-mail came up.

In approximately May 2002, I learned from looking at the foundation books that Mr. Abramoff wanted to support a school in

Israel, a kollel. A kollel is a Jewish school of higher learning, kind

of similar to a post-graduate type program in a way. When I

learned of this, like I told you in my opening statement, I do not

practice in the area of not-for-profits.

So I said to Mr. Abramoff, I do not know if this is something that

a foundation is permitted to do. I would recommend to you that you

ask the foundation attorneys. The Capital Athletic Foundation has

expert attorneys who practice in the area of not-for-profits. He said,

fine; go ask them on my behalf.

I contacted the attorneys and I said, there is a school in Israel

that Mr. Abramoff would like to support, and he would like to support it for security and self-defense. Is that a permissible activity

of the foundation? And they came back to me and they said it is

permitted. Because it is in Israel a grant follow-up procedure needs

to be done. I do not see where you are reading from, but I heard

you mention that when you were reading the e-mail. That is what

the grant follow-up procedure is. To the best of my knowledge, the

Capital Athletic Foundation did comply with that requirement.

Now, I would also like to express to you that when I learned

about the school in May 2002 and immediately sought expert advice from the Capital Athletic Foundation attorneys, it was not

something, you might think, gee, well this sounds like an odd request. Why would he want to do something like that?

Just to put it in context, 2 months earlier, in March 2002, a terrorist infiltrated a Jewish school in Israel and randomly went

shooting off with his gun in the study hall of the Jewish school.

Five young men, 5 innocent young men were killed and 23 innocent

young men were injured. So when I learned of this 2 months later,

in May, it was not something that stood out in my mind that it was

a rare request.

The CHAIRMAN. It is not a rare request to ask money for a sniper

workshop? You were aware that it was a sniper workshop, right?

Ms. HALPERN. Sir, if you are listening to what I am telling you.

The CHAIRMAN. I am listening to what you are telling me. For

you to say that it is not unusual to give money to a sniper workshop, which there was an exchange of e-mails that says Mr.

Abramoff’s assistant did suggest he could write some kind of letter

with his ‘‘sniper workshop logo and letterhead’’. ‘‘It is an educational entity of sorts’’.

Ms. Halpern, it does not pass the smell test.

Ms. HALPERN. I am sitting here today, sir, so I can tell you what

I knew at that time. At that time what was presented to me, information that was given to me——

The CHAIRMAN. Did you know it was a sniper workshop?

Ms. HALPERN. I did not know. I am not aware of a sniper workshop. Now, as you know from the thousands and thousands of documents that I have given to your committee, sir, I got a lot of emails from Mr. Abramoff or his associates. I cannot say I read
69

every attachment or every forward. It would have been very time

consuming.

So I do not recall ever hearing something about a logo in an email that you just referred to. I am telling you, sir, that to the best

of my knowledge, Mr. Abramoff was funding a school for security

and self-defense.

The CHAIRMAN. Were you aware that it was a sniper workshop

at the time?

Ms. HALPERN. At the time, I was not aware that Mr. Abramoff

was funding a sniper workshop.

The CHAIRMAN. Senator Dorgan.

Senator DORGAN. Ms. Halpern, are you upset that you are here

having to answer these questions for the committee?

Ms. HALPERN. No; actually I am not upset, sir. I have been very

helpful with your committee. I have met with your staff for several

days. I am here to answer whatever I can.

Senator DORGAN. Senator McCain asked the question about the

e-mail. I want to just read it again because it is hard for me to believe that with all that was going on, substantial amounts of money

coming into all kinds of different organizations, that you did not

perhaps understand that there were some real problems here. You

say, let’s try to square it in a way where we do not screw up the

foundation.

Ms. HALPERN. Yes.

Senator DORGAN. We need to get the money to a 501(c)(3) or an

educational institution.

[Exhibit follows:]
70
71
72
73

Ms. HALPERN. Can I explain that, sir?

Senator DORGAN. Of course.

Ms. HALPERN. Because I think you raise a good point, when you

read out of context, you can think of a lot of things. As a matter

of fact, whenever someone takes tax advice or looks at tax advice,

they cannot look at that one e-mail. They need to see what came

before, the e-mail that came after and before, and the conversations

that took place.

So let me just explain to you, and maybe this will clarify things

for you. Mr. Abramoff asked his office to make purchases, security

purchases for this institution in Israel. What I could not understand at that point was why he was doing that. If you want to fund

a school, just give them the money, ask them for a receipt, and get

on with life. Let them worry about what they are going to do with

it.

And then when I learned that Mr. Abramoff was actually, he

said fine; we are not going to purchase any equipment; we will just

give him the money. Then I learned that he gave him the money

directly and not to the school.

Now, this is kind of similar to if there is a school next door that

had a broken elevator, and you wanted their broken elevator to get

fixed, you would not go and give the money to the elevator man to

repair the elevator. You would give money to the school and the

school would arrange for the elevator man to come to fix the elevator.

This is similar. What I was saying here is do not take the money

and give it to the agent for the school, and that is what Mr.

Abramoff told me he was, the agent for the school. Give it directly

to the school. Have them give you their wire information, wire the

money to them, whatever means you need to do to get it to the

school.

Senator DORGAN. Because if he would give to the agent directly,

it would ‘‘screw up the foundation’’?

Ms. HALPERN. No, sir; again to the extent of my knowledge of

not-for-profit laws, I do not think it would screw up the foundation.

It would be, to the extent of my knowledge, still a permitted distribution. However, I kind of like things simple and to the point.

And why bother with having to do grant follow-up work.

Mr. Abramoff had a limited staff and I did not want something

falling through the cracks. I wanted him to do the simplest thing

possible. He presented information to me where he wanted to support a school in Israel and my answer was, you want to do it, fine,

just have the money go directly to the school.

Senator DORGAN. Ms. Halpern, it does not seem to me like there

was much that was not permitted in all these transactions. You

talk about ‘‘permitted issues.’’ I mean, as you go through these emails and take a look at these transactions, it looks like the sky

was the limit in terms of transactions.

Let me ask you about a number of entities. In addition to the

Capital Athletic Foundation and Kaygold, Mr. Abramoff had a

number of other companies. In an e-mail from you to him and several of his associates on February 16, 2003, you mentioned the following entities. Could you just tell us what each of them are?

[Exhibit follows:]
74
75

Ms. HALPERN. Is there an exhibit I should look at?

Senator DORGAN. I do not have an exhibit on this, but it is an

e-mail.

Archives, LLC? Do you remember what that was?

Ms. HALPERN. Archives LLC, is that as opposed to Archives Fine

Dining, LLC?

Senator DORGAN. I will write that down. That is a new one.

Ms. HALPERN. I want to differentiate them for tax purposes.

Senator DORGAN. Archives, LLC, you have about seven of them.

I was just curious. These are in addition to the Capital Athletic

Foundation and also in addition to Kaygold.

Archives, LLC, what is that?

Ms. HALPERN. Archives, LLC to the best of my knowledge is dormant and did not do anything. The way it came about is Mr.

Abramoff said, I want to open a restaurant. Can you please do the

filings. It is going to be called Archives, LLC.

Senator DORGAN. And I did not have it on the list, but there is

an Archives Fine Dining, LLC as well?

Ms. HALPERN. Let me explain, sir. I will be happy to explain it.

Senator DORGAN. All right.

Ms. HALPERN. And then after I went ahead and did the paperwork to apply for a tax ID number, et cetera, all that is required,

the person in Mr. Abramoff’s business office said; ‘‘Oh, what is this

all about, Archives, LLC?’’ He already opened an entity for his restaurant, called Archives Fine Dining, LLC. So basically, his partner

in the restaurant opened Archives Fine Dining, LLC and either it

slipped Mr. Abramoff’s mind or he did not know, and he asked me

to open it.

Senator DORGAN. DL/JA, LLC?

Ms. HALPERN. That is an entity, to the best of my knowledge,

that owns his personal residence.

Senator DORGAN. Entity that owns his personal residence?

Ms. HALPERN. Yes, sir.

Senator DORGAN. So his personal residence is not in his name?

Ms. HALPERN. It is in the name you just read.

Senator DORGAN. His home is owned by DL/JA, LLC?

Ms. HALPERN. To the best of my knowledge, sir. I did not set that

up. You are going to have to ask the people involved who set that

up.

Senator DORGAN. Did you do the accounting for that?

Ms. HALPERN. No, sir; it was not a for-profit entity. It did not

have tax returns, et cetera.

Senator DORGAN. I understand.

Ms. HALPERN. It owns his house.

Senator DORGAN. It is a separate company to own his home?

Ms. HALPERN. It is an LLC that owns his home. It was based on

advice he received from attorneys.

Senator DORGAN. Sounds a bit Byzantine to me.

Livsar Enterprises, LLC?

Ms. HALPERN. Yes, sir; that is an entity that is owned together

with him and Rodney Lane. It controlled and operated his restaurant, Signatures.

Senator DORGAN. SVJA, LLC?
76

Ms. HALPERN. To the best of my knowledge, that entity was dormant. I am not aware of any income or losses passing through it

that I knew about. It was apparently an entity that he and another

associate founded. Apparently, whatever deal it was for fell

through.

Senator DORGAN. International Political Management, Inc.?

Ms. HALPERN. That is a corporation that he founded, and let me

try to recall what it was for. It was not a very active entity. I did

not do the tax return for it, so you are kind of asking me something

that I have not seen in many years, which is a little bit difficult

for me, but I do not recall it as something that was very active.

Senator DORGAN. Sports Suites, LLC, Mt. Vernon Studios, Inc. I

will not go through the rest. These are a lot of enterprises. Are

there additional enterprises?

Ms. HALPERN. I would be happy to answer each and every one

if you would like. It is no problem.

Senator DORGAN. I wonder if I could do this, ask you to submit

a list that would be an exhaustive list of the enterprises that you

know Mr. Abramoff controlled.

Ms. HALPERN. Sure. No problem.

Senator DORGAN. That would be helpful to the committee.

Let me ask Mr. McConnon, on page 6 of the Coushatta political

program, that is exhibit 64, Capitol Campaign Strategies makes a

claim they completed 16,500 direct contacts with individual calls to

the Governor. Any evidence in the Coushatta database that suggests this occurred?

[Exhibit follows:]
77
78
79
80

Mr. MCCONNON. Sir, what is the exhibit number?

Senator DORGAN. It is exhibit 64. In that same exhibit on page

2, it claims that Capital Campaign Strategies custom built a computer program. I think the chairman has already asked about that.

Let’s start with that. On page 2, are you aware that the Capitol

Campaign Strategies custom built a computer program?

Mr. MCCONNON. No; to the best of my knowledge, they were

using ours that we had licensed to them.

Senator DORGAN. On page 6, where they make the claim they

completed 16,500 direct individual contacts to the Governor, any

evidence in the database that suggests this occurred?

Mr. MCCONNON. The only thing that I could find in looking back

at a series of e-mails and records was a file that we received that

is called Mississippi Gaming: Yes Activists. It was approximately

15,500 records in the file that we received in October 2001. How

that was derived is not clear at all from the data, but it is possible

that those are accurate.

Senator DORGAN. Mr. Cathcart, I understand that you had interviews with the staff of the Committee on Indian Affairs. My understanding is that you answered the questions asked in all three

interviews. Although you certainly have a right to assert your fifth

amendment rights here, I am wondering, if you were willing to answer the questions in all three of our interviews, what persuades

you not to answer the questions in public that you previously answered in private?

Mr. CATHCART. Frankly, I took the advice of my counsel and

maybe it is more appropriate for him to answer than I.

Senator DORGAN. Perhaps we could hear from your counsel.

Mr. LEEPER. Thank you, Mr. Vice Chairman.

As you know, in a court of law counsel representing a party has

the right to object to a question that is compound, argumentative,

loaded with an unfounded assumption, and counsel can obtain a

ruling from an impartial arbiter, usually a judge, as to whether or

not the witness needs to answer the question as stated or whether

the question needs to be restated.

In this venue, as you know, counsel has no such ability to protect

his or her client from such objectionable questions, and a record of

answers to such questions, questions that are compound or based

on unfounded assumptions, is an ambiguous and unreliable record,

which gives rise to a hazard to a witness, in particular the witness’

liberty interest. The right recognized in Ohio v. Reiner is intended

to protect that very right and interest, including the interest of innocent persons.

So for that reason, we are exercising that right here.

Senator DORGAN. Counsel, I do not contest the right and the

chairman indicated that your client certainly has that right. My

only point was that he did come as he described, at his own expense, came for three interviews, answered the questions, and I

would have thought that that which he answered in private, he

would answer in public. I understand he has the right to assert it

and has so asserted.

One final question, if I might, Mr. Chairman. Ms. Halpern, you

indicated a David Pierce was involved in some of the tax prepara-
81

tion issues and tax advice with respect to things like the Capital

Athletic Foundation. Is that right?

Ms. HALPERN. No, sir; I said that to the best of my knowledge,

Mr. Pierce, who was an internal accountant for Mr. Abramoff,

hired by Mr. Lane, kept the books of several of Mr. Abramoff’s entities. To the best of my knowledge, he did not prepare tax returns

that I know about. And if he rendered tax advice to Mr. Abramoff,

I would have no way of knowing that and I do not recall him telling

me he did.

Senator DORGAN. The final point. I think the chairman asked you

a good number of questions about this, but with respect to the Capital Athletic Foundation, the establishment of an academy in suburban Maryland, sniper training operation in Israel, payments to

Mr. Abramoff’s cousin, and other things.

Ms. HALPERN. I am sorry. Which payments?

Senator DORGAN. There are payments to Mr. Abramoff’s cousin

Steve?

Ms. HALPERN. From where? From the Capital Athletic Foundation?

Senator DORGAN. Yes; is that not accurate?

Ms. HALPERN. Would you show me what exhibit that would be

in, sir?

Senator DORGAN. I do not have that exhibit in front of me.

Ms. HALPERN. I am not familiar with the fact that the foundation

made those kind of payments.

Senator DORGAN. Why don’t we then, I am going to submit questions for Ms. Halpern, and I will attempt to get that reference for

you, and I want to visit it.

Ms. HALPERN. Okay. Thank you. As you know, there were thousands of transactions in the CAF books and I cannot remember all

of them.

Senator DORGAN. I understand it is here.

Ms. HALPERN. Okay.

Senator DORGAN. Exhibit 204, on the second page, ‘‘can we cut

the spy equipment and monthly stipend at $3,560; can we do without Steve Abramoff’s monthly stipend of $2,000? Can we hold off

on any other charitable contributions for a while’’, and so on.

[Exhibit follows:]
82
83
84

Ms. HALPERN. To the best of my knowledge, sir, and correct me

if I am wrong, but I think if your staff looks in the books and

records, Mr. Steven Abramoff was receiving payment from Kaygold,

which is Mr. Abramoff’s consulting practice, not from the foundation.

Senator DORGAN. All right.

Mr. Chairman, I will submit some additional questions. I thank

all three of the witnesses for being here.

The CHAIRMAN. I have just one more question.

Ms. Halpern, please refer to exhibit 206 in the book please. Now,

you have stated that you, in a previous question, that you had no

knowledge of a sniper workshop. Well, in exhibit 206, November

11, 2002 e-mail between you and Mr. Abramoff, Mr. Abramoff forwards to you an e-mail from Ben Zvi, in which he writes, ‘‘last

night, one of the guys from the emergency response team in Israel

City of Ashdod, who was in the Army when I did the workshop for

snipers in his unit, said they need the workshop badly and anything else I can do to help.’’

Mr. Ben Zvi continues, ‘‘I am now writing out a program for patrolling and dealing with ambushes and containment and neutralization of terrorists, both in and out of the Ishuv.’’

In forwarding this e-mail to you, Mr. Abramoff writes, ‘‘This is

why it so hard for me to cut off funding. Who else would fund this?

He has no one else.’’

In response, you write, ‘‘I actually had chills reading the two emails you forwarded to me. However, we need to work this into the

tax exempt purposes of the foundation. More to come on this subject in an e-mail tomorrow or so. Mr. Abramoff’s outside accountant

is finishing the 2001 return, and read me the riot act on some of

the stuff that we are doing. We need to fix the holes.’’

[Exhibit follows:]
85
86
87

The CHAIRMAN. Now, you continuously stated that there are

thousands of e-mails. I would think you would remember something that caused you to have chills reading two e-mails. That specifically refers to this individual who, ‘‘did the workshop for snipers

in his unit,’’ which obviously, according to the e-mail, Mr. Abramoff

said he was funding.

Ms. HALPERN. Mr. Chairman, I am not up on what is required

for security enhancements. Okay? That is certainly not one of my

areas of expertise. If Mr. Abramoff, who is running the foundation,

presented to me that he is funding the school for security enhancements, for security and defense, that is what I believed and that

is what I took. What was required in order to provide security enhancements, I do not know. It was not my job to investigate. I was

not running the foundation. And I was basing any information that

I said to him, was based on what he told me.

Now, you mention about the other firm, the tax accountants, the

specialists who prepared the returns. What that is referring to is,

I believe it was, Mr. Vice Chairman had mentioned in an e-mail

that he read, it was referring to a relationship that the foundation

had with an ice rink that the school was using. That is the reference where specialist tax accountants consulted the tax attorneys

and made a recommendation specifically about the ice rink. That

is what that line is referring to, sir.

The CHAIRMAN. Ms. Halpern, it was forwarded to you, the e-mail

that says ‘‘last night, one of the guys who was in the Army when

I did the workshop for snipers and said they needed the workshop

badly,’’ and you are saying that you had no knowledge of a sniper

workshop.

Ms. HALPERN. Sir, if you recall another e-mail which I believe

you put in your exhibit last time, it talked about terrorists cutting

through the fence. I do not know what is required to defend against

a terrorist coming through a fence.

The CHAIRMAN. I am not asking that, Ms. Halpern. I was asking

if you knew money was being sent for a workshop for snipers, and

it is specifically referred to in an e-mail that was sent to you, that

you said in response, ‘‘it gives you chills.’’

Ms. HALPERN. Yes, sir; and I reiterate that the knowledge that

I had was that Mr. Abramoff was funding a school in Israel for security enhancements. Now, what that school required, depending

on their geographical location, I cannot answer that, sir, this very

specific question.

The CHAIRMAN. It was a very specific response to you from Mr.

Abramoff, who said, ‘‘this is why it is so hard for me to cut off funding.’’ Clearly, that indicates he was funding.

I have no further questions.

Do you have any further questions?

Senator DORGAN. One further question.

Ms. Halpern, you have heard the testimony now at two separate

hearings about Mr. Abramoff, testimony that I think pretty clearly

describes deception, lying, perhaps fraud, including substantial evidence of that this morning. Give me your analysis of what you have

heard.

Ms. HALPERN. It is a lot of information. It is all very overwhelming. As you know your committee has shown me some e-mails that
88

were written either relating to me or relating to e-mails that people

wrote about me, it is a very overwhelming massive amount of information.

What I can tell you, though, is that I believe in our Justice Department and I have full confidence that they will make a thorough

investigation and get to the bottom of this.

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

The CHAIRMAN. Thank you very much.

I thank the witnesses.

Our last panel is Steven Griles, former deputy secretary of the

Interior; Michael Rossetti, former counsel to the Secretary of the

Interior; and Italia Federici, the president of the Council of Republicans for Environmental Advocacy.

Mr. Griles, we will begin with you, sir.

STATEMENT OF J. STEVEN GRILES, FORMER DEPUTY

SECRETARY, DEPARTMENT OF THE INTERIOR

Mr. GRILES. Mr. Chairman and members of the committee, my

name is J. Steven Griles. I am appearing today voluntarily. I believe the committee’s work is very, very important.

What I have heard today is extremely disheartening. This committee knows I have been a public servant for almost 24 years, first

with the Commonwealth of Virginia from 1968 to 1981, and then

with the United States Department of the Interior from 1981–89,

and again from 2001 through January of this year.

In my most recent position, I served as deputy secretary of the

Interior. I considered it a privilege to work for President Bush, Secretary Norton, and many of you and your colleagues on the issues

of importance to this country and its environment.

Two weeks ago, I spent over 4 hours answering questions from

this committee staff. I was shown documents that I had never seen

before and told things about Mr. Abramoff that I did not know, and

today I learned more. We have heard that Mr. Abramoff has taken

an unbelievable amount of money from some of the most vulnerable

people in our society. He also apparently has claimed to have special access to my office on behalf of his Indian gaming clients. That

is outrageous and it is not true.

If he got this money in part by misrepresenting his relationships

with me, I am extremely pleased that you are investigating this.

Before answering your questions, I want to make one important

point. From the time I became deputy secretary, I had no responsibilities for Indian gaming issues. Authority over those issues was

assigned to others who reported directly to the Secretary, like Michael Rossetti. The Secretary made all decisions relating to Indian

gaming compacts. I want you to know this so that you can judge

the credibility of any special access to my office on this issue.

Thank you so much, Mr. Chairman, and I want to thank the staff

for the way they treated me when we went through the interview.

The CHAIRMAN. Thank you very much.

Mr. Rossetti.
89

STATEMENT OF MICHAEL ROSSETTI, FORMER COUNSEL TO

THE SECRETARY OF THE INTERIOR, DEPARTMENT OF THE

INTERIOR

Mr. ROSSETTI. Thank you, Mr. Chairman.

I have no prepared remarks, but I am happy, of course, to answer any questions that you have, Mr. Chairman, or that the Vice

Chairman has of me at this time.

The CHAIRMAN. Thank you very much.

Mr. Griles, according to documents in the committee’s possession,

Mr. Abramoff directly and indirectly contacted you while you

served as deputy secretary of the Department of the Interior about

tribal issues that were pending before the department. I would like

to explore those communications with you now.

First, could you describe your relationship with Mr. Abramoff?

Mr. GRILES. My relationship with Mr. Abramoff was, as with

other lobbyists, nothing more, nothing less, just as it would be with

Senators and other interest groups. I returned calls directly. If people called, I had those calls returned by others who had direct responsibilities.

The CHAIRMAN. At your deposition, you testified that you could

only vaguely recall a couple of conversations you had with Ms.

Federici about matters relating to Mr. Abramoff’s clients pending

at the department, and that was it, and that these were only requests by Ms. Federici to have you call Mr. Abramoff back. Is that

correct?

Mr. GRILES. Yes, Senator; I told your investigators that I recalled

several conversations in which she had asked me to call Mr.

Abramoff. She had just been talking to him and wanted to know

if I would call him. I know of one instance that I think, this has

been a long time ago, that I made a return call to him.

The CHAIRMAN. So with the benefit of time, you have been unable to remember anything further?

Mr. GRILES. And I have not seen any other documents, Senator,

either to help with that.

The CHAIRMAN. At your deposition, you said you never had any

reason to get involved in tribal gaming issues, and that you ‘‘didn’t

do gaming.’’ At your deposition, you testified that as the COO at

Interior, you did not intervene or get involved in gaming issues, except to the extent that the counselor asked you for advice. But to

what extent did you try to intervene in gaming issues that related

to Mr. Abramoff’s clients?

Mr. GRILES. Senator, I do not recall intervening on behalf of Mr.

Abramoff’s clients ever.

The CHAIRMAN. Mr. Rossetti, are you aware of any incidents

where Mr. Griles tried to intervene in gaming issues relating to

Mr. Abramoff’s clients?

Mr. ROSSETTI. I am aware, Senator, Mr. Chairman, that Mr.

Griles at some point late in 2003, I believe it was, became very interested in participating in the decisionmaking process and indicated to me on many occasions a desire to be in attendance at the

Secretary’s decisionmaking meeting with respect to the two-part

determination that was before her or would be before her with respect to the Jena Band in Louisiana.
90

The CHAIRMAN. Mr. Griles, with the benefit of Mr. Rossetti’s

recollection, why did you try to intervene in the Jena issue?

Mr. GRILES. Mr. Rossetti has a different memory than I have,

Senator, of that issue.

The CHAIRMAN. Go ahead, please.

Mr. GRILES. I have, and to my recollection, never went to a decisionmaking meeting on the Jena Band with the Secretary. My

recollection, and I believe if you were to check with the Secretary,

she would indicate that also. I do not recall, Senator, going to any

meeting with the career staff, and I believe if you were to check

with the career staff that would be true.

The CHAIRMAN. Did you try to intervene in the Jena issue?

Mr. GRILES. Senator, I was the chief operating officer. If I had

wanted to intervene in those issues, I could have. That was not

what I was doing at Interior. I did not do Indian gaming, sir.

The CHAIRMAN. What conversations do you recall that you had

with Mr. Abramoff regarding the Jena issue or with Ms. Federici

concerning the Jena issue?

Mr. GRILES. Senator, I do not recall having a discussion with Ms.

Federici about the Jena Band issue at all.

The CHAIRMAN. Do you have a recollection of any conversations

you had with Ms. Federici about a leadership dispute in the Louisiana Coushatta Tribe?

Mr. GRILES. Senator, as I told your investigators, I recall, as I

indicated a few moments ago, that I had a call from Italia Federici

in which she discussed something, and I do not recall the nature

of that conversation. At the end of that conversation, she asked me,

she said I was talking to Mr. Abramoff; he wondered if you could

give him a call. That is my recollection. I called Mr. Abramoff.

I was not in the office when he returned the call. I think I was

on my way home or whatever. And he indicated there was a dispute, a mutiny dispute, a lockout or whatever it was, with one of

the tribes in the Southeast. I then took that information and asked

the acting assistant secretary for Indian Affairs, would she please

look at that. I may have asked her to talk to him, and determine

what if any appropriate action we should take.

The CHAIRMAN. Did you ever talk with Mr. Abramoff about a potential strategy to block the Gun Lake application?

Mr. GRILES. Senator, I did not know what Gun Lake was until

the Washington Post ran an article. I did not even know what the

term was. I had never been involved in Gun Lake. Once I saw the

article, it ran in the paper, I realized that at a senior policy meeting with the Secretary, the Solicitor’s office informed the Secretary

that the Justice Department had indicated they were not going to

process or defend, as I understood it, applications for lands into

trust for gaming unless there had been an EIS performed. It was

not until those two things were connected that I understood that

I had overheard the conversation, but until that point, I had no

knowledge of it.

The CHAIRMAN. In November 2003, you gave Michael Rossetti,

the former counselor to the Secretary of the Department of the Interior a binder that contained information critical of the Louisiana

Jena Band’s application for placing land into trust. Did that indeed

happen? Did you give him a binder?
91

Mr. GRILES. Yes, Senator.

The CHAIRMAN. You did?

Mr. Rossetti, did Mr. Griles tell you where the binder came from?

Mr. ROSSETTI. Yes, sir.

The CHAIRMAN. And where was that?

Mr. ROSSETTI. The conversation, it took some time to get to the

ultimate point to where the binder came from. At first, Mr. Griles

indicated that he got it from someone on the Hill, a staff member

to a member of either the Senate or the House. I have to say I do

not recall which.

I have two names that I recall and have not been able to refresh

my recollection adequately. This took the course of a series of questions that I had to ask to figure out where it came from because

it did not have a transmittal letter on it, an e-mail cover, or any

other readily identifiable information as to what its genesis was or

what its meaning was intended to be.

But on the cover memo was, I think it was addressed to the department. It was addressed to somebody, but was not from anybody. So in our extensive conversation about where it came from

ultimately, I learned from Mr. Griles that it came from a member

by way of a chief of staff by way of a lobbyist who turned out to

be Mr. Abramoff. But it was during the course of a series of questions that took much longer to get to that answer than I would

have thought was necessary.

The CHAIRMAN. Mr. Griles, binders show up in your office and

then you just pass them on to the most important people in the Department of the Interior?

Mr. GRILES. Senator, if I could put this in context. First of all,

I would like to respond to Mr. Rossetti’s recollection of a conversation. He says a series of questions and answers. My recollection of

it, it was less than 2 minutes, if it was that long. So I do not want

to dispute a former friend of mine and a former colleague. I have

a great deal of respect for him. He did a great job when he served

the Secretary.

So I guess I would just like to explain what actually happened.

I was in a meeting. I came back to my office. There was a binder.

There was no transmission on it. There was no envelope. There

was nothing. I opened it up, and there were letters from Congressmen and it may have been Senators. I just do not recall the content

of it. It was clearly something related to the Jena Band application.

In Interior, we had huge litigation going on in the Cobell litigation, Senator, as you well know. One of the allegations there was

records, the maintaining of records and what we needed to do with

records if we got something, and how we should manage them. This

binder was in the minds of the Solicitor’s office and everyone, was

a record of the Department of the Interior once it landed on my

desk.

My objective was three-fold: Get it to the right person; avoid a

record-keeping issue with the litigation issue; and I asked, and

since Mr. Rossetti, as I said before, was in fact the Counselor that

was managing the Indian gaming issues, I took it to Mr. Rossetti.

There was speculation, there is no question, there was speculation

about where it came from.
92

I did not say it came from Mr. Abramoff. I did not say it came

from Congress. I speculated that it could have come from any of

those sources. I did not know and I do not know today where it

came from, but it was a record, Senator, that was laying on my

desk.

I asked my secretary, where did this come from? Her name is

Doris Johnson. She is one of the nicest, sweetest ladies in the

world. She said, it was delivered to the front desk and I went down

and picked it up. I assume she meant she went down and picked

it up from a messenger. She brought it back and I said, where is

the envelope? She said it had your name on it, and nothing else.

As I repeat myself, I went, I consulted, I was told that it had to

be given to the people who were managing this because it was a

record of the department, and I gave it to Mr. Rossetti. I asked Mr.

Rossetti when he was giving the briefing to the Secretary on this

issue, which I did not attend, and I would not have asked him this

if I was going to attend the briefing and interfere in this issue, to

please make sure the Secretary knew that there were all sides of

this issue, and please brief her on that. I think I put him off when

I said that, to be honest.

I think in doing that, I think he thought I questioned his integrity about fully informing the Secretary. If I did that, I apologize

to him today. But Senator, I did not know then and I do not know

today where it came from.

The CHAIRMAN. Mr. Rossetti testifies that on two occasions, you

insisted on being in the meetings concerning the Jena Band. Is

that not true?

Mr. GRILES. Senator, I have no recollection of attending any

meetings at which the Jena Band issue was discussed. There were

thousands and thousands of meetings in the Department of the Interior. My schedule has them all on it. I have looked through every

meeting, every calendar that I have since I got those calendars several days ago. I spent nights reading them. I see nothing on there

that would indicate that I went to a Jena Band briefing.

The CHAIRMAN. I think Mr. Rossetti’s testimony is that you did

not go, but you insisted on going and were not able to do so.

Mr. GRILES. Can I comment?

The CHAIRMAN. Yes; go ahead.

Mr. GRILES. Senator, as the deputy secretary and chief operating

officer, if I wanted to go to a meeting, I would have gone. I was

the number two. It didn’t happen. I did not want to go. I did not

want to be involved in Indian gaming. That is the truth. I am telling you the truth. I want you to know that, from my heart. This

is not something that I was interested in and I have no recollection, absolutely no recollection of going to any meeting when any

of that issue was discussed.

The CHAIRMAN. Senator Dorgan.

Senator DORGAN. Mr. Chairman, I am trying to understand this

a bit. Mr. Rossetti and Mr. Griles, your statements about this are

in direct conflict. Let me go through some of the e-mails.

Mr. Griles, the point of this inquiry from the committee is that

we have a large body of e-mails, and the e-mails come from Italia

Federici. They come from Mr. Abramoff. So they are on the record.
93

I am going to go through some, and you can perhaps react to them,

but it is what is part of the public record at this point.

Exhibit 4——

Mr. GRILES. Would you like me to refer to them, Senator?

Senator DORGAN. Yes; I will have it up on the screen in a moment. Exhibit 4, and I will just read it, most of these are very

short. It is from Italia Federici to Jack Abramoff: ‘‘Hi, Jack. After

I retrieved my coat, I ended up sharing a cab with Steve. He really

enjoyed meeting you and was grateful for the strategic advice on

BIA and insular affairs. You definitely made another friend.’’

That kind of starts a whole series of e-mails from Ms. Federici.

And so that begins a long process. Exhibit 277: ‘‘Hi, Jack’’, again

from Ms. Federici to Mr. Abramoff, ‘‘I am talking with Steve in

about 30 minutes. We will call you right after. I know he said they

do not want her for the job so I do not know what the thought was

here, but I will find out. He is calling back about another issue’’.

This is about ‘‘Secretary Norton names Martin to Indian Affairs

post’’. Abramoff had written to her saying, ‘‘I cannot believe they

named her’’, and then she wrote back and said, ‘‘I am talking with

Steve in about 30 minutes’’.

Exhibit 37 is an exhibit in which Abramoff describes you to Van

Hoof as ‘‘the fellow who we helped with the CREA project’’.

So throughout the entire set of records that came from our subpoenas, Mr. Griles, we have probably dozens of e-mails, 3 or 4 or

5 dozen e-mails from both Mr. Abramoff and Ms. Federici describing meetings with you, discussions with you, telephone calls with

you, and describing those meetings, discussions and telephone calls

specifically in the context of issues, Jena Band issues and other Indian issues before the Interior Committee.

What are we to make of that? It is certainly at odds with your

opening statement, at great odds with it.

[Exhibit follows:]
94
95
96
97

Mr. GRILES. Senator, I have not seen those e-mails. I hear you

saying they are in the public record. They are not in any record

that has been presented to me, unless they were presented to me

by your staff at the time we did our interview. So I have not seen

those.

Senator, I cannot really comment on or know what one person

says to another or what their intent or meaning is. As I said, my

relationship with Mr. Abramoff is no different than any other lobbyist. Italia Federici was a friend, for a long time. Gale Norton introduced me to her.

Senator DORGAN. Is Ms. Federici lying to the committee? We

have had her in and she has been interviewed. She apparently did

not accept a subpoena. We were not able to subpoena her, so apparently we will have her here as a separate witness, perhaps next

week, before this committee.

But we have extensive testimony from her. Is she not telling us

the truth, because that testimony is a substantial body of evidence

of her telling Mr. Abramoff of many discussions she had with you,

specifically about tribal issues?

Mr. GRILES. Senator, I can tell you that I am telling you the

truth to the best of my ability here today. For me to speculate on

what somebody else said to Mr. Abramoff, and if it was the truth,

it is something you really have to ask them, Senator. There was

no special relationship for Mr. Abramoff in my office. It never did

exist.

Senator DORGAN. Exhibit 138 is an exhibit that is an e-mail. It

is from Jack Abramoff. It says, ‘‘I have just returned from a meeting with the Deputy Secretary. The Jena compact is moving fast.

There is a land-in-trust application with it from the Governor’’.

Do you recall a meeting with Mr. Abramoff as deputy secretary?

Mr. GRILES. I am sorry, Senator. What e-mail is that?

Senator DORGAN. It is an e-mail from Jack Abramoff to one of his

staff, ‘‘I have just returned from meeting with the Deputy Secretary. The Jena compact is moving fast and there is a land-intrust application with it from the Governor’’.

It is exhibit 138. It is up on the screen at the moment.

[Exhibit follows:]
98
99

Mr. GRILES. What is the date of that, sir?

Senator DORGAN. That date was February 5, 2002. Do you recall

a time when Mr. Abramoff met with you either in your office or

outside of your office and discussed the Jena Band compact?

Mr. GRILES. Senator, around this date, which could have been

the photo-op that occurred with the Secretary, was around February 5 of 2002, I believe. That is the only time that I have any

recollection of Mr. Abramoff ever being in my office. So you know,

this may be something that occurred during the discussion over the

photo-op. I do not know the context of it, but that is the only date

that I believe that Mr. Abramoff ever came into my part of the Department of the Interior.

Senator DORGAN. Mr. Rossetti, tell me the position you had in

the Department of the Interior?

Mr. ROSSETTI. I was counselor to Secretary Norton. I reported directly to her and was in the immediate office of the Secretary on

her hallway and the hallway shared also by Steve Griles.

Senator DORGAN. Mr. Rossetti, Senator McCain asked you about

Mr. Griles, whether he had an interest in the Jena Band. You indicated that the answer was yes. Did Mr. Griles to your knowledge

have interest in other Indian issues, and if so, how was that manifested and how do you have knowledge of it?

Mr. ROSSETTI. Well, I know that there was an interest in the

Jena Band two-part determination because of Steve’s constant requests to be involved in meetings that stood in stark contrast to

the way that we had constructed a process to handle these, so that

the Secretary would have preserved unto herself the full prerogatives of the decision before her in a way that also protected her

from allegations that would have been unfounded by persons outside of the department, that there was a process that was not as

sound as we tried to construct it.

So in Jena, for instance, Mr. Vice Chairman, the contrast in my

mind was between the first Jena decision, which was a gaming

compact decision that came in in 2002, which I have no recollection

of Mr. Griles participating in the discussions with career folks and

political folks on that decision, and a very keen interest in being

involved in a meeting which, as he says, would have been on the

Secretary’s schedule anyway, and it is her prerogative exclusively

to exclude anybody from such a meeting, a prerogative I would not

have presumed to exercise myself. However, I would have given my

counsel to her if I was concerned about a voice being in a room,

so long as she was able to determine who the voice is and on whose

behalf the voice is being raised.

I am sorry, sir. The last part of your question was other issues,

other Indian issues? There were a couple of other issues, Indian

gaming issues now we are talking about, because of course, the

portfolio of the deputy secretary is in many ways a member-atlarge or an official-at-large of the department, involved on any day

in numerous issues as duty dictates and requires. I have no quibble

with that at all, and accept that as the appropriate role of the deputy secretary.

However, here there were a couple of instances, this was one

that I was worried about and I wanted Mr. Griles to know that I

had my eye on him on this one because I was worried about it,
100

whether founded or not, I was worried about it. There was a California example where I thought it was odd that Steve was involved,

the Auburn Rancheria, which was a decision that the Secretary

was making on a gaming parcel, and all of a sudden there were

meetings that Steve Griles was chairing which had as its constituent members people from adjacent communities in this California

area, I believe it was Placer County.

I thought that was odd. I did not know on whose behalf he had

interceded precisely and on whose behalf Mr. Griles was exercising

that inquiry, but he exercised an inquiry. The Secretary made a decision. That, too, stood in contrast to an insistent voice, I am sorry,

an insistent request at being a part of this decision for reasons that

I could not in my mind understand.

Senator DORGAN. Mr. Griles, I referenced an earlier Abramoff email, and the reason I am asking you about these is they are on

the record and you, while you are on the record, should be aware

of them. There is another September 9, 2002 Jack Abramoff e-mail

to Marc Schwartz: ‘‘Just finished meeting with the Deputy Secretary. He is supposed to get his people to report to him tomorrow

on this issue so he can help us’’. December 12, 2002, that is number 212 is the reference, it was 195 on the first one, number 212

on the second, Jack Abramoff to Chris: ‘‘Thanks, Chris. The meeting with Griles went well. We have a lot to do’’.

[Exhibit follows:]
101
102

Senator DORGAN. So my point is, there are e-mails, e-mails, emails, and e-mails about Mr. Abramoff saying he is meeting with

you. There are many others in which Ms. Federici is saying she is

talking to you. I mean, how do you reconcile all that?

Mr. GRILES. Senator, I cannot reconcile what Mr. Abramoff put

in e-mails to anyone. Today, based on what I heard, I do not know

if anybody can. I do not know the nature of those e-mails and what

the subject was right now. They are out of context for me. I do not

believe your staff showed them to me. If they did, I apologize. But

they asked me a question about I think September 12, this guy’s

name. I have absolutely no recollection of who that is or what that

was.

So what is the e-mail about? I do not know. I stated earlier that

I recall Mr. Abramoff being in my office one time, one time, and

that was that February meeting for the photo-op.

You know, Senator, if I could, Mr. Rossetti has made a couple of

comments. I do not know the Auburn Rancheria issue. Whenever

I was asked by the congressional office of Interior to meet with certain members of Congress, I would do that. And out of that, they

would ask me to meet with certain constituents. This is me having

a very vague recollection, Senator, of that issue, of when one of the

California Congressmen was interested in this and asked me to

meet.

This was early on, probably, in the Administration. But I do not

have facts. I do not have calendars here. So I am really guessing,

which is not fair to you and it is really not fair to the public record.

But I did not do gaming. I did not, did not ask Mr. Rossetti to

let me participate in anything, ever, particularly on the Jena Band.

Now, he has a different recollection of this. It is completely at odds

with mine. I had no reason to. I appreciate Mr. Rossetti, he is

known to me as someone that I have worked with, but I do not

know why he would have that recollection, Senator.

The CHAIRMAN. Mr. Griles, can I just follow-up about this relationship that Senator Dorgan is talking about. I would like you to

look at exhibit 280. It is in that book there, exhibit 280. It is an

e-mail dated September 9, 2003 from Mr. Abramoff to members of

his team. Do you see it? It is entitled, ‘‘Griles.’’ Mr. Abramoff

writes——

[Exhibit follows:
103
104

Mr. GRILES. Senator, excuse me. What is it?

The CHAIRMAN. Exhibit 280. Do you see it?

Mr. GRILES. I do not see anything that say, oh, it says ‘‘Griles’’.

Okay. I think I do see it, Senator.

The CHAIRMAN. The e-mail is dated September 9, 2003 from Mr.

Abramoff to members of his team entitled, ‘‘Griles.’’ Mr. Abramoff

writes, ‘‘This cannot be shared with anyone not on the distribution

list. I met with him tonight. He is ready to leave Interior and will

most likely be coming to join us. I expect that he will be with us

in 90 to 120 days.’’ First of all, do you recall meeting with Mr.

Abramoff on the night of September 9, 2003?

Mr. GRILES. I do not have a calendar.

The CHAIRMAN. But you do not recall it without a calendar?

Mr. GRILES. That is right, Senator, and I would have a way to

do that. If I had seen this e-mail, I would be able to respond to

that.

The CHAIRMAN. And you have no recollection of Mr. Abramoff

discussing employment with you? I am only asking this question

because Mr. Abramoff states so in an e-mail.

Mr. GRILES. And I appreciate your asking this question because

unbeknownst to me that he had written anything of that nature,

and of course the papers have written that. So I am pleased you

are asking this question.

I met with Mr. Abramoff and one of the former witnesses that

was sitting here earlier, Mr. Baggett, one night. Mr. Abramoff says,

I have a managing partner; if you would come by and have a drink,

I would like for you to meet him.

Now, that happens quite often, Senator, as you know. People

bring people to town and ask, would you take a few minutes and

say hello to them.

When I sat down with them for a few minutes, the managing

partner, Mr. Baggett, this is the second time I have ever seen him

today, described his firm. It sounds like a very nice firm. At the

end of it, they said, we would like for you to join our firm, and I

said, gentlemen, I am not leaving the Federal Government. I had

made no plans to leave the Federal Government. In fact, I had

made a determination I was going to serve through the 4 years of

the President before I left.

As a result of that conversation, it raised alarms with me, because I am going, what was that about. I went back immediately

and talked to the ethics officers at the Department of the Interior,

both the deputy ethics officer and the ethics officer and told them

that conversation had occurred.

I said, do I need to do something? Do I need to document this?

Do I need to recuse myself on anything here? And their response

was, no, that if somebody in this town wanted you to get recused

and they knew you were involved in something, they could come up

to you in a casual conversation and say, we would like for you to

come to our firm and company, and then you would be recused.

And that is not how the ethics laws work, Senator.

So this e-mail, as you I think know, I had not seen before. I had

read about something like that in the Washington Post, and I am

really happy you finally asked this question. It simply is not true.
105

The CHAIRMAN. There was no other discussion you ever had

about a job? Thank you.

Mr. GRILES. No, sir; not at all.

The CHAIRMAN. Thank you.

Senator Dorgan.

Senator DORGAN. Mr. Rossetti, you said you were worried about

Mr. Griles. Tell me about that.

Mr. ROSSETTI. Well, I was alarmed that Mr. Griles all of a sudden had an inexplicable desire to be involved in this particular

issue. I was not so much alarmed that a binder would appear at

the department or letters collated by somebody to try to persuade

decisionmakers, but I could not reconcile in my own mind why it

was we had to have such a tussle over where the binder came from

in the first instance, and then in the second instance, why it was

repeatedly on at least one-half-dozen occasions, Mr. Griles insisted

on being a part of a decisionmaking meeting with the Secretary.

Now, ultimately he did not attend that meeting, but that was a

by-product of one final exchange that he and I had in front of witnesses on this score, that ended in my open challenge to him as to

what it was that he was doing by pressing this issue. Whose water

was he carrying on this issue? And that was the end of that. The

Secretary made her determination based on the counsel from staff,

both career and politicals alike, who had been reviewing the materials that had been submitted by the State and the tribal government at the time.

Senator DORGAN. Mr. Rossetti, who were those witnesses?

Mr. ROSSETTI. To the best of my recollection, there were two. If

there was a third one, I do not recall, but David Barnhardt and

Brian Weidmann, I believe, were in the room. After this pointed exchange between Steve Griles and myself. Whether it was in that

exact same room, that exact same moment, or later that day, but

it happened within that day, I asked David Barnhardt what happened, in my own flowery language, and he indicated to me that

I scared Mr. Griles from participating in the meeting.

Later that day, that same day, Steve showed up in my office and

indicated that there was no reason to include him in the decisionmaking meeting with the Secretary. He knew I had it covered and

handled. As I said earlier, that was the end of that, so that I knew

the Secretary would have at least a process that allowed her to do

her secretarial decisionmaking exercise with all the up-sides and

down-sides being laid for her in painful detail as much as she

wanted from the people that she had come to hear from on these

matters typically.

Senator DORGAN. Mr. Griles, did you have discussions with the

Secretary about the Jena Band issue?

Mr. GRILES. No, sir; Senator, I do not recall any discussion with

the Secretary on Jena Band. Both as Mr. Rossetti indicated, there

were two different decisions that went on, one the first time, and

then one the second time. I do not recall ever being in a meeting

with the Secretary when she had the decision meeting.

Now, Senator, the way the Department works is every week the

Assistant Secretaries and bureau heads meet with the Secretary

and with me, if my schedule allowed, to talk about pending issues.

In those meetings, people would update the Secretary on what was
106

occurring. Senator, I do not ever recall having a discussion at all

with the Secretary about the Jena Band. I had total access to her,

anytime I needed it and anytime I wanted it. If I had wanted that

access, I could have exercised it.

I am confused by Mr. Rossetti’s rendition.

Senator DORGAN. Mr. Griles, on that point, I think Mr. Rossetti

talks about two witnesses to the pointed conversation. What will be

the witnesses’ recollection, in your judgment? Do you remember

that pointed conversation?

Mr. GRILES. Senator, I do not. I would say that Mr. Barnhardt

and Mr. Weideman are also very fine public servants, and if that

conversation occurred, sir, then we would have to understand the

nature and the context of it.

Senator DORGAN. Regrettably, Mr. Chairman, the amendment

that Senator Grassley and I are offering, a very controversial, significant amendment on the floor of the Senate, had a 2-hour time

limit. There are about 30 to 40 minutes left, so I have to go to

speak on the floor on that amendment. I regret that I have to leave

before this hearing is completed.

I want to submit some questions, Mr. Griles, on a dinner that

was held at Signatures restaurant, which was apparently, if not a

fundraiser, nonetheless a dinner for an organization called CREA.

Ms. Federici indicated that you were personally inviting everyone

from Interior and talking with them about the dinner. And then I

have the guest list for the dinner. I want to ask some questions

about that dinner, because that also plays a role in a range of

things that Ms. Federici claims in the interviews she has had with

this committee.

We are trying to find the truth here, and it seems more and more

difficult in a number of these issues. The issues are significant and

very important. Mr. Chairman, I will leave the remainder of the

hearing to you, and thank you very much for doing that.

The CHAIRMAN. Thank you very much.

Mr. Griles, I only have one more question. When you served as

Deputy——

Mr. GRILES. Mr. Chairman, may I just say something to Senator

Dorgan?

The CHAIRMAN. Go ahead.

Mr. GRILES. I, too, seek what you just said. I learned so much

today. I have not seen these things. I do not know why people

would make those kind of comments. I am really disappointed in

what I have learned about some people today, and I know you are.

We have struggled to help Indian country the 4 years I was there.

We made a difference, and the things that went on here were not

right.

The CHAIRMAN. Thank you very much.

When you served as deputy secretary, were you aware of any

polling or survey project done by Interior that was funded by or

through CREA?

Mr. GRILES. Senator, I was listening to the reading of that email. As I recall from staff, that was March 2001. Is that correct,

Senator?

The CHAIRMAN. I think so.
107

Mr. GRILES. Senator, I was not even confirmed by the Senate

until July 2001. I think I assumed office on July 17. So first of all,

I do not know anything about it. I do not have any recollection of

that today at all. At some point back in my background, somebody

may have told me something, but I was not at Interior, and I cannot imagine anybody conducting a poll for Interior, Senator.

The CHAIRMAN. Thank you very much.

Mr. Rossetti, I am sure this was not your most happy day, and

I thank you for coming forward to the committee.

Mr. Griles, I thank you for appearing and giving us your best

view of the situation.

I thank you both for appearing.

This hearing is adjourned.

[Whereupon at 1 p.m., the committee was adjourned, to reconvene at the call of the Chair.]

(109)

APPENDIX

ADDITIONAL MATERIAL SUBMITTED FOR THE RECORD

PREPARED STATEMENT OF FRED W. BAGGETT, GREENBERG TRAURIG LLP

Mr. Chairman and honorable members of the committee:

My name is Fred Baggett, and I am a shareholder with the Tallahassee, Florida

office of Greenberg Traurig, LLP (‘‘Greenberg Traurig’’ or the ‘‘Firm’’). I appreciate

this opportunity to testify before the Senate Committee on Indian Affairs (the ‘‘committee’’) today concerning the committee’s ongoing investigation in to the misconduct of Jack Abramoff.

I have spent my entire professional career of 35 years as a lawyer and lobbyist

in the State of Florida. After graduating from the Florida State University College

of Law in 1970, I spent 2 years working as an executive assistant to the Chief Justice of the Florida State Supreme Court. I then started a law practice in Tallahassee, FL, which the Chief Justice joined in 1975. The lawyers in our office joined

Greenberg Traurig in 1991, and I have been there ever since. I am currently the

managing shareholder of the Tallahassee office of Greenberg Traurig, chair of the

Firm finance committee and head of the national governmental affairs practice. I

also maintain a full-time administrative law and lobbying practice with the Firm,

which is comprised almost exclusively of work at the Florida State legislative and

executive level.

Greenberg Traurig is an international law firm that prides itself on providing

high quality professional services to its clients. The Firm is comprised of over 30

offices, with a governmental affairs component in 16 of those offices.

Turning to the subject of today’s hearing, from 2001 through early 2004, Jack

Abramoff worked as a lobbyist in the Washington, DC office of our Firm. Up until

the end of Mr. Abramoff’s tenure at Greenberg Traurig, the Firm believed that Mr.

Abramoff was rendering high-quality professional services to his clients.

In late 2003 and early 2004, reports began to emerge questioning the amount of

money paid by various Indian tribes to Mr. Abramoff and Michael Scanlon in connection with professional services the two had rendered. During this timeframe, Mr.

Abramoff was questioned about his financial relationship with Mr. Scanlon. Records

available to the committee, including a February 3, 2004 interview of Mr. Abramoff

conducted by Susan Schmidt of The Washington Post, reflect that, in front of Firm

personnel, Mr. Abramoff denied having any financial relationship with Mr. Scanlon

or engaging in any improprieties in connection with his lobbying work for tribal clients.

Nevertheless, because concerns had been raised, Greenberg Traurig wanted to ensure that there was no impropriety on the part of Mr. Abramoff. In mid-February,

the Firm hired Henry F. Schuelke, III of the Washington, DC law firm Janis,

Schuelke & Wechsler to conduct an internal investigation focusing on the existence

of a financial arrangement between Mr. Abramoff and Mr. Scanlon. Mr. Schuelke

is a former Federal prosecutor, who served as an assistant U.S. attorney in the District of Columbia from 1972–79, and is a highly regarded member of the District

of Columbia Bar. Both he and the other members of his firm have extensive experience in conducting internal investigations of this type.
110

As Mr. Schuelke began his investigation, The Washington Post published the article ‘‘A Jackpot From Indian Gaming Tribes,’’ raising questions about the fees

charged by Mr. Abramoff and Mr. Scanlon for lobbying and grassroots work. At

around the same time, this committee also announced that it would be looking into

Mr. Ahramoff’s activity. Facing the prospect of being subjected to W. Schuelke’s investigation, Mr. Abramoff for the first time disclosed to our Firm that be had received money from Mr. Scanlon in connection with the work that the two men were

doing on behalf of Indian tribes. Upon learning of this arrangement, the Firm immediately requested and obtained Mr. Abramoff’s resignation. The Firm issued a statement to that effect on March 2, 2004.

Notwithstanding Mr. Abramoff’s departure, Greenberg Traurig asked Mr.

Schuelke to continue his investigation. Based on Mr. Schuelke’s investigation, the

Firm has made disclosures to clients affected by Mr. Abramoff’s activities, worked

out resolutions with a number of affected clients and hopes to work out resolutions

with still other affected clients.

The facts surrounding Mr. Abramoff’s employment by our Firm have been unhappy ones. We at Greenberg Traurig regret the improprieties that transpired during Mr. Abramoff’s 3 years of employment with us. We share the chairman’s and

the rest of the committee’s dismay at Mr. Abramoff’s activities and behavior.

I assure you that we will continue to work with you and other investigators to

ensure that, consistent with our obligations to clients, all information that can be

shared is shared with the proper authorities.

We appreciate the work of this committee and its staff in thoroughly investigating

and responding to this matter.

Again, thank you for this opportunity.

PREPARED STATEMENT OF KEVIN SICKEY, CHAIRMAN, COUSHATTA TRIBE OF

LOUISIANA

Good morning Chairman McCain, Senator Dorgan, and distinguished members of

this committee.

I am Kevin Sickey, chairman of the Coushatta Tribe of Louisiana. With me at the

table is my brother and council member, David Sickey, and our tribal attorney,

Jimmy Faircloth. I would also like to recognize Council Member Tee LaBulf, and

the members of our tribe who made the trip to attend this hearing.

Many of these tribal members were the first to suspect that something had gone

terribly wrong with the lobbyists, Jack Abramoff and Mike Scanlon, so it is appropriate that these tribal members are present for this proceeding. At one time they

were referred to as ‘‘dissidents’’ for questioning the lobbyists’ actions—a label provided by the lobbyists to divert suspicion from their own activities.

We are grateful for the opportunity to appear before this important committee.

Your staff has been cooperative and respectful, and we appreciate their hard work.

We will divide our opening statement into two parts. First, I will provide a brief

history of our tribe. I will explain our government and the political environment

that the lobbyists used to their advantage. And, I will comment briefly on the harm

caused by their fraud, Obviously, the information your committee is making public

today is both shocking and deeply disturbing to me both as chairman of the tribe

and as a tribal member.

Following my brief comments, Councilman Sickey will provide a broad overview

of some of the things we discovered in our own review.

Before we proceed, however, we must respectfully qualify our testimony. Neither

Councilman Sickey nor I had any direct dealings with Abramoff or Mr. Scanlon. We

were not involved in the decision to hire these lobbyists, nor were we involved in

any aspect of coordinating their work. We are both reluctant to speculate about the

conduct and motives of the lobbyists, and I suspect that any such speculation or conjecture will-not aid the work of this committee. Finally, because we are currently

involved in litigation about these events, we must be cautious in our comments concerning the actions of others.

I. The History of Our Tribe

We are descendants of the Creek Confederacy, from the Muskogee family of tribes.

Our ancestors were stripped of 22 million acres of land by the United States following the Creek War in 1814. Approximately 50 years later, a small band of

Coushattas settled in the Calcasieu River area, near Kinder, LA.

In 1884, they were forced to move again when homesteaders began claiming their

land. They then purchased a small tract of land 3 miles, north of Elton, LA.
111

In 1898, the United States placed 160 acres of land into trust for the tribe. Unfortunately, the trust was revoked in 1953, which began a 20-year struggle for re-recognition.

In 1973, the Coushatta Tribe of Louisiana was again recognized. And 7 years

later, our reservation was again formally established.

In 1985, we held our first election of leaders by popular vote. We then established

our own judicial system, police department, housing authority, and many other social programs.

Today, our tribe consists of over 850 members, approximately 400 of whom live

in the Coushatta Community. We are proud of our culture and heritage, and we are

dedicated to maintaining the sovereignty that generations of our ancestors sacrificed

and even died to protect.

Our casino and resort opened in January 1995, and since then we have been

blessed with economic prosperity. We employ approximately 2,800 people, with a

total annual payroll in, the range of $80 million. We purchase goods and services

from Louisiana vendors in the range, of $40 million per year. And we contribute approximately $7 million per year to State and local governments. We are proud to

be a vital part of the economy of southwest Louisiana.

This brief period of prosperity follows hundreds of years of unjust treatment by

outsiders, which resulted in abject poverty and hardship within the tribe. This is

why it is particularly painful that, after all those terrible years, our tribe again has

been preyed upon by outsiders. But on this occasion, at least we are in good company. Certainly within the modern era, no victimization of Native Americans has

received so much attention no doubt because the underlying scandal has touched so

many influential people.

Nevertheless, we deeply appreciate the actions of this committee in bringing this

matter to light.

II. Our Tribal Government and the Political Environment that Was Manipulated by the Lobbyists

Our tribe is governed by an elected council consisting of a chairman and four

council members. None of the current council members were in office when Mr.

Abramoff was hired in early 2001. Councilman Sickey took office in 2003. He had

no direct contact with either Mr. Abramoff or Mr. Scanlon and very little knowledge

of their activities. In fact he became a vocal spokesperson against them.

Council Members LaBuff, Verlis Williams, and I took office this past June. One

of our council seats is currently vacant.

This wholesale change in leadership was in large part a result of the mess created

by Mr. Abramoff and Mr. Scanlon.

While Indian Country has seen many con-men throughout history, few, if any,

were as skilled as Mr. Abramoff and Mr. Scanlon at creating and then preying on

insecurities. They preyed upon our political insecurities, they preyed upon our economic insecurities, and they preyed upon our insecurities about each other.

Our political system is no more turbulent than any other. We, too, have cycles

in leadership and influence, and it occasionally turns partisan. The lobbyists came

to our tribe during one of these transition periods. And they viewed this as an opportunity for exploitation.

To any decent person, vulnerability in others provides an opportunity to help. But

to con-men, like Mr. Abramoff and Mr. Scanlon, our vulnerability simply provided

an opportunity to steal. And they hit the jackpot with us: A Native American tribe

with a fairly new casino, in the midst of a political transition, and naive to the underworld of governmental affairs.

They inserted themselves into our internal tribal politics, excluded and attempted

to discredit those who questioned or opposed them, and deliberately created paranoia on both sides by exaggerating threats from inside and outside the tribe.

They exaggerated political threats and they exaggerated economic threats. Then,

they exaggerated their ability to deal with these exaggerated threats. And in the

midst of this, they incited political upheaval to provide cover for their scheme to

steal millions of dollars.

We are pleased to report that the political storm within the tribe has calmed. And

we are taking steps to recover the money that was stolen to correct our system of

checks and balances to ensure that this will never happen again.

III. The Harm to Our Tribe

It is important to understand that the harm caused by Mr. Abramoff and Mr.

Scanlon is much greater than the money they stole. Even though this amount is
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shockingly large, the scar of victimization runs even deeper, particularly because it

has touched our leadership.

Moreover, the misconduct of Mr. Abramoff and Mr. Scanlon has harmed all Native

Americans in a way that deserves the particular attention of this committee. The

lobbyists actions have created a perception that there is something improper about

officials working closely with Indian tribes.

This stereotype threatens to chill tribal communications with officials who can

profoundly influence the well-being of all tribes.

Even worse, it unfairly shifts the unfairly from where it belongs to the victims.

Jack Abramoff is not a product of Indian Country. On the contrary, he is the golden

boy gone bad of the American political system. Our tribe and others were victimized

when we attempted to fit into the American political system and we were led to believe that Mr. Abramoff was the gatekeeper.

We have begun the process of repairing the political damage to our tribe’s reputation. We have met with several of our State and Federal officials, and they seem

genuinely committed to providing our tribe with the same access and the same

channels of communication open to all individuals, businesses, and special interest

group—nothing more, nothing less, and without favors or contributions. That is the

way the system should work, and that is certainly the way we would like to participate.

There have been a lot of adjectives used to describe Mr. Abramoff and Mr. Scanlon; greedy and corrupt come to mind. But those are common terms, often used to

describe people who forfeit judgment for money. Abramoff’s and Scanlon’s actions

were hardly common. They set a new high water mark for greed and corruption.

I have read that Mr. Abramoff considers himself a religious man. If that is the

case, then I do not understand, the basis of his faith, and it is certainly different

than ours. Most religions promote compassion and concern for others, and it is clear

that Mr. Abramoff and Mr. Scanlon had no concern whatsoever for the welfare of

our people.

Your committee has done a great service for all Americans by exposing this sad

affair. There are lessons here for everyone.

I am grateful for the opportunity to address this committee on behalf of the

Coushatta Tribe of Louisiana. Council member David Sickey will now provide a

brief overview of our factual findings.

PREPARED STATEMENT OF DAVID SICKEY, COUNCILMAN, COUSHATTA TRIBE OF

LOUISIANA

Good morning Chairman McCain, Senator Dorgan and distinguished members of

this committee.

I am David Sickey, a member of the tribal council of the Coushatta Tribe of Louisiana. I took office in June 2003.

As Chairman Sickey has noted, I was not in office when Mr. Abramoff and Mr.

Scanlon were hired, and I did not participate in the decisions by the tribal council

to authorize their projects or pay them. I would respectfully submit that it will not

aid the committee’s efforts for me to speculate about the events at issue. My brief

comments today will therefore be limited to certain facts established by the documents we have seen. As you are aware, many of the documents reviewed by this

committee were not available to us. However, my observations today are also based

on information provided by your staff, for which we are grateful.

My intention is to provide a broad overview of the environment in which this

fraud was committed. As your investigation must have revealed, while the scheme

of Mr. Abramoff and Mr. Scanlon was reprehensible, it was also very clever and

well-timed. Like Chairman Sickey, I should note that our tribe is currently involved

in litigation about these lobbying activities, so I am limited in what I can say today.

I have attempted to organize my observations in chronological order, because the

way that this scheme evolved over time was critical to its success.

1. The First Six Months

Mr. Abramoff was hired in March 2001. The tribe entered a contract with his

firm, Greenberg Traurig, to provide lobbying services related to our tribe’s compact

negotiation and important regional gaming issues. According to the contract, Greenberg Traurig was to receive $125,000 per month plus reasonable expenses. The contract did not mention Mr. Scanlon nor any of the entities that he used to charge

the tribe, an additional $30 million.

During the first 6 months or so of the lobbyists’ employment, they appeared to

deliver on their promises, and so the lobbying costs appeared justified. During that
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initial period, the tribe paid roughly $3.5 million for assistance with our tribal compact, which was successfully negotiated, and to achieve several legislative objectives.

I say that they appeared to deliver on their promises because it is difficult to assess

how much impact the lobbyists actually had in accomplishing these tribal objectives.

Of course, they took credit for everything.

If it had ended at that point, around September 2001, then this would be nothing

more than another story about high priced lobbyists taking credit for results that

they may or may not have influenced. But, it did not stop there. They leveraged

their initial success as a platform for fraud, and by the spring of 2002 had extracted

another $17 million from our tribe. By the time it was over in 2004, the tribe had

spent approximately $36 million. Ironically, as the scheme progressed and the bills

and rhetoric increased, the lobbyists’ actual work for the tribe clearly decreased.

2. The Texas Threat

On October 5, 2001, the tribe paid $870,000 to Mr. Scanlon’s company, Capital

Campaign Strategies, to create a ‘‘Grassroots Political Structure’’ in Texas. Mr.

Abramoff and Mr. Scanlon were insistent that Texas was on the verge of legalizing

gambling, and that this would devastate the Coushatta casino. The majority of our

casino customers travel from Texas particularly the Houston area—and we have

long understood that legalized gambling in Texas would erode our customer base

and our casino revenues. Recognizing this potential threat and our fear of the consequences, the lobbyists claimed to have critical influence with the Texas officials

who could defeat Texas gambling.

This appears to be the starting point for their most egregious exaggerations and

fabrications. This also appears to be the timeframe when they committed to gouging

the tribe for as much money as they could, and to say or do anything that was necessary to prolong the payout.

3. $1 Million Payment Funneled to One of Abramoff’s Causes

On October 30, 2001, the tribe paid $3.17 million for the ‘‘Louisiana Program.’’

This payment marks a high point in the lobbyists’ creative billing. They split the

bill by requesting that $2.17 million be sent to Capitol Campaign Strategies and $1

million to Greenberg Traurig. According to information shared by the staff, the $1

million payment to Greenberg Traurig was not for any services provided by the law

firm. Instead, this $1 million payment was used to ‘‘pump’’ the firm’s reported lobbying revenues, thereby maintaining Greenberg Traurig’s public status as one of the

‘‘top ten’’ providers of legal and lobbying services to Native American tribes. E-mails

involving Mr. Abramoff, Mr. Scanlon, and others at Greenberg Traurig reveal that

this $1 million payment was funneled through the firm and then used to finance

one of Mr. Abramoff’s favorite causes.

The suspect nature and purpose of this payment structure is reflected in an email from Mr. Scanlon to the tribe’s former attorney, dated October 25, 2001, where

he writes:

‘‘We broke this into two invoices—one to be paid to Greenberg Traurig for 1m, and

one paid to Capitol Campaign Strategies—GT’s public affairs entity for the balance.

We usually just invoice you through Capitol Campaign Strategies so the Lawyers at

the firm rest easy while we are out burning the country side. In this instance however

we plan to do some things through the law firm umbrella due to their highly sensitive nature and confidentiality reasons. I hate hiding behind lawyers—but we are

going to do some crazy stuff on this one—so I guess it’s ok.’’

Mr. Abramoff, who was a partner at Greenberg Traurig, directed this creative billing arrangement. In my personal view, this payment reveals the extent of Mr.

Abramoff’s shamelessness. Not only was he stealing the tribe’s money, but he was

using the theft to improve his professional reputation and the reputation of the

firm.

4. Hyping the Texas Threat

In a memorandum dated November 6, 2001, Mr. Scanlon reports that he had just

returned from Texas, and states:

‘‘We believe now that the Alabama Coushatta will open soon, if we do not intercede.

This will likely be a small facility and not the class III facility the council is worried

about, but we believe you should shut it down regardless.’’

This exemplifies the lobbyists’ strategy of identifying an exaggerated threat to the

tribe’s casino revenues, as does the following assertion in a report from Mr. Scanlon

to the tribe dated December 21, 2001:
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‘‘Despite our best efforts, the voting public in Texas remains VERY pro-gaming.

The State economy is lagging, and with the Enron and Continental Airlines debacles

hitting the Houston area back to back, they are desperate for revenue. As we said

when we came to you with the original Texas, proposal, things are really bad over

there. We have never before seen such a pro-gaming atmosphere in Texas, or anywhere else in the country, in our collective political careers, and although we have

it contained for the time being, this environment is a very serious threat to the Grand

Casino’s future.’’

5. Threats of Infiltration

According to a memorandum from Mr. Scanlon dated January 3, 2002, the company that owned one of our competitors was ‘‘well known for their ability to infiltrate

the electorates of Indian tribes and this will undoubtedly happen there, if they get

a foothold in your region.’’ After hammering this point and others, Mr. Scanlon

states:

‘‘We have identified a strategy to deal with this, and we would like to propose this

strategy and request a budget for it. Both the strategy and the budget are somewhat

large. However, we cannot stress the importance of eliminating this concern. It is a

threat to not only the casino, but also the tribe itself.’’

6. Increasing the Threat Level

In a report to the tribe dated February 25, 2002, Mr. Scanlon stated, that:

‘‘It may seem like the walls are closing in with three very real threats on your

radar screen . . . . If we handle each threat individually, our chances of eliminating

ALL OF THEM are very good. If we panic, the very existence of the grand casino

could be jeopardized.’’

At about this time, perhaps sensing some opposition to their proposals and programs within the tribe—and likely planning to increase their fees and profits—Mr.

Abramoff and Mr. Scanlon began excluding and attempting to discredit their political opposition on the Council and within the tribe.

7. Going on the Offensive to Counter Criticism

In a report dated May 8, 2002, Mr. Scanlon states:

‘‘Sorry for the confusion on the funding front, but as I mentioned I believe that

your opponents will use such payments against you and until such time as we deal

with that issue, it’s best we lay low.’’

He then recommended that the former chairman send a letter to tribal members

attempting to justify hiring what he refers to as the ‘‘Washington team.’’

He also spoke negatively about another council member, and stated that ‘‘we can’t

let [that person] run around banging on you and the chairman much longer or it

will take hold.’’

And he recommended sending a letter to tribal members accusing the council

member of doing something wrong to ‘‘put the focus back on the people who deserve

it.’’

8. Lying Low to Avoid Exposure

On October 31, 2002, the tribal CFO sent an e-mail to Mr. Abramoff stating that

tribal auditors were requesting confirmation that the tribe had paid a total of

$18,559,700 for ‘‘demographic surveys and studies and other professional campaign

consulting fees,’’ and that there were ‘‘no contracts in place with Capitol Campaign

Strategies and the American International Center.’’

Mr. Abramoff forwarded the e-mail to Mr. Scanlon, asking ‘‘what should I say, especially about the last part (the request concerning no contracts)?’’

In response to several frantic comments from Mr. Abramoff, Mr. Scanlon states

‘‘f—ing weird, really f—ing weird—I hope that this is standard operating procedure.’’

He then recommends that Mr. Abramoff talk to the tribe’s vice chairman before

writing anything.

There was never a formal reply. The confirmation requested by the auditors was

not provided. Instead, a decision apparently was made to lay low until the storm

passed.

There is no doubt that, by this point, the lobbyists knew that questions were

being raised about their fees. As is clear from subsequent events, they obviously did

not care. Apparently, they felt confident that even this type of blatant misconduct

was fair game in the world of big time lobbying.

9. Back in Business and Full Steam Ahead

In a report date January 21, 2003, Mr. Scanlon stated:
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‘‘As we outlined in our overall strategy, this year’s political circumstances, if not

addressed correctly, will literally cost the tribe hundreds of millions of dollars.’’

He asked for a budget of $9.3 million on the bottom end and $11.3 million the

top end,’’ and added that ‘‘when you look at the fact that the tribe stands to lose several hundreds of millions of dollars, the program costs are well worth the risk.’’

In this report, Mr. Scanlon also proposes a way to dodge concerns within the tribe

about the lobbying fees by routing money through different entities, He wrote:

‘‘We have attached invoices that direct the funds to several different entities that

will play different roles in this campaign along with a letter from me/CCS informing

the tribe that I will no longer be providing the political services to the tribe as I have

in the past.’’

But, in the next paragraph, he makes it clear that this was all a shell game, when

he states:

‘‘We want to assure you that you will receive the same level of service we have provided in the past. We understand that what you are paying for is Jack and myself

and we will deliver the same way we have in the past.

That said, the entities we are using will technically execute operations of the campaign or will contract with other companies to cover costs associated with the campaign—with Jack and I doing the work. In other words, the tribe will be invoiced

by an entity and once funded that entity will in turn hire firms such as CCS or (Jack

and I for example) to execute the program.’’

He also enclosed a bill from Greenberg Traurig for $2 million, and stated:

‘‘GT will simply serve as another funding entity to ease budgetary issues. GT will

turn that funding around to cover costs associated with the campaign.’’

In total, the tribe routed $11.3 million through the following maze of entities:

$2 million to Greenberg Traurig.

$5 million to Scanlon Gould Public Affairs.

$2.3 million to American International Center

$2 million to American Research & Analysis.

And this does not include the $125,000 per month the tribe was paying Greenberg

Traurig.

Closing Comment

In conclusion, as Chairman Sickey and I have both noted, since we were not involved in any direct dealings with Mr. Abramoff or Mr. Scanlon, there is very little

that we can say here today about the events at issue that would not involve speculation and conjecture. Therefore, until our own investigation is complete, both of us

are very reluctant to comment further on the lobbying activities in question. Moreover, any speculative comments on our part could jeopardize our legal efforts to recover the tribe’s money.

But, what we can state with firm conviction based on our own review and the

findings of this committee is that our tribe was defrauded out of most of the money

we paid. And no matter who the lobbyists used or who they try to blame, this fraud

was orchestrated and carried out by Jack Abramoff and Michael Scanlon and—from

the tribe’s perspective—the fraud was orchestrated under the banner of Greenberg

Traurig.

Your committee has performed an important service by exposing this fraud, and

I am grateful for the opportunity to address the committee today. As Chairman

Sickey noted, there are lessons in this sad episode for everyone.
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Æ