Monday, March 14, 2005

I love this Capitol town! The De-Lay saga continues...

ISIKOFF: so, where did the money go?
LOWELL: no comment (I am on my way to NYC for Gary Condit's hearing)

Money: So Where Did It Go?

Newsweek March 21 issue - The FBI is trying to trace what happened to $2.5 million in payments to a conservative Washington think tank that were routed to accounts controlled by two lobbyists with close ties to House Majority Leader Tom DeLay, NEWSWEEK has learned. The payments to the National Center for Public Policy Research were meant for a PR campaign promoting Indian gaming, center officials said. But internal e-mails obtained by NEWSWEEK show the lobbyists, Jack Abramoff and Michael Scanlon, DeLay's former press secretary, never documented any work performed or explained what they did with the money despite repeated requests. "We're disappointed and frustrated," said Amy Ridenour, the center's president. The group's records have been subpoenaed by a federal grand jury. One focus of the FBI probe, legal sources say, is whether the payments, as well as tens of millions of dollars in other fees collected by the two lobbyists from Indian tribes, were used for political contributions or to pay for trips and gifts to members of Congress.

The widening probe in D.C. may prove more troubling for DeLay than the separate investigation into his fund-raising in Texas. DeLay has had a longstanding relationship with the center; the group, for which he has signed a fund-raising letter, paid for two of his overseas trips-including a $70,000 excursion in 2000 during which he and Abramoff (a member of the center's board) played golf in Scotland. The Washington Post reported last week the trip was mostly paid for by two $25,000 checks from two Abramoff lobbying clients that were sent to the center the day the trip began. In 2002, the center received a $1 million contribution from one of those Abramoff clients, the Mississippi Band of Choctaw Indians. The funds were intended to finance "educational" efforts promoting the idea that casinos like the one operated by the Choctaws helped Native Americans, Ridenour said. At Abramoff's urging, the center allotted $500,000 to a public-relations firm owned by Scanlon, and an additional $450,000 was paid to a foundation controlled by Abramoff. The next year, the center received its largest donation, $1.5 million, from another Abramoff client, an Internet gambling group in Gibraltar. This time, Abramoff suggested most of the grant, $1.28 million, be given to a firm called "KayGold LLC." Unbeknownst to Ridenour, KayGold was owned by Abramoff.

Ridenour said she and the center's lawyers became concerned in 2003 about the absence of any work product and began pressing Abramoff for documentation. By March 2004, worried about a possible audit, she sent an e-mail saying it would be "extremely helpful" if he could supply any polls or even "leftover printed materials" in order to "reassure anyone, such as the IRS, who might wonder if the effort really took place." But, she said, nothing was ever turned over; Abramoff later resigned from the center's board. The group is now cooperating with the Feds and may sue Abramoff [ as are the Tigua Indians, through GT Law! ] Asked about the payments, Abramoff's lawyer, Abbe Lowell, said, "No comment." Scanlon's lawyer said suggestions the work was not completed "are totally inaccurate," but declined to elaborate. DeLay, whose spokesman said the congressman knew nothing of the payments, is distancing himself from his former golfing partner. "I go about my job," he told reporters. "Jack Abramoff has his own problems. Any other questions?"

-Michael Isikoff

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