November 3, 2005
Ex-Interior Deputy Testifies Lobbyist Offered Him Job
By PHILIP SHENON, NY TIMES

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WASHINGTON, Nov. 2 - The former No. 2 official at the Interior Department acknowledged to Congressional investigators on Wednesday that he had received a job offer while at the department from the lobbyist Jack Abramoff and that he had other contacts with Mr. Abramoff, the focus of a corruption inquiry.

The official, former Deputy Secretary J. Steven Griles, insisted in testimony to a hearing of the Senate Indian Affairs Committee that there was nothing improper in his ties to Mr. Abramoff and that he had immediately reported the job offer, in 2003, to ethics officials in the department. It can be a crime for federal officials to open job negotiations while working for the government.

Mr. Griles, who left the department to set up his lobbying firm, acknowledged the offer after being confronted by the committee chairman, Senator John McCain, Republican of Arizona, with an e-mail message from Sept. 9, 2003, by Mr. Abramoff. In it, Mr. Abramoff told his lobbying colleagues that he had met with Mr. Griles that evening, that Mr. Griles was "ready to leave Interior and will most likely be coming to join us" and that "I expect he will be with us in 90-120 days."

Despite the job offer and other e-mail messages that showed contacts between the lobbyist and Mr. Griles, the former official insisted he did not have a special relationship with Mr. Abramoff. "I don't recall intervening on behalf of Mr. Abramoff's clients ever," he said.

The claim was met with skepticism from the senators, who released more than 300 pages of e-mail communications and other documents from the files of Mr. Abramoff and his clients that documented his aggressive efforts to lobby Mr. Griles and other Interior Department officials on behalf of Indian casinos. The department, which includes the Bureau of Indian Affairs, is responsible for federal oversight of Indian gambling.

The hearing, the latest in a year-old inquiry by the panel into accusations that Mr. Abramoff had defrauded tribes out of tens of millions of dollars, also brought new attention to Ralph Reed, the influential Republican political consultant who once led the Christian Coalition and is now a candidate for lieutenant governor of Georgia.

Mr. Abramoff's previously released internal records show that Mr. Reed's lobbying company was paid millions of dollars to help block gambling that might compete against casinos owned by Mr. Abramoff's tribal clients. Mr. Reed, among Mr. Abramoff's closest friends, has insisted that he had no knowledge that the anti-gambling effort might have been underwritten by the proceeds of Indian casinos.

Another witness , a former lawyer for the Coushatta tribe of Louisiana and its gambling operations, said Mr. Abramoff had asked her to try to find a way to hide the source of more than $150,000 that the tribe was offering to support Mr. Reed's effort. The tribe was among Mr. Abramoff's most lucrative clients, paying him and his partners more than $32 million.

"Mr. Abramoff asked if the tribe had another entity through which the payment could be made," said the lawyer, Kathryn van Hoof, adding that the money was eventually funneled through a businessman with a long association with the tribe.

Senator Byron Dorgan of North Dakota, the ranking Democrat on the panel, said the evidence showed that Mr. Reed had asked to be paid by the tribe through "a variety of entities" because of "his concern about being publicly associated with gambling money," an issue that has emerged in Mr. Reed's campaign in Georgia.

An e-mail message released on Wednesday shows that on Feb. 11, 2002, Mr. Abramoff contacted Mr. Reed to provide him with a newspaper article about the Coushatta, adding, "That's our client."

A spokeswoman for Mr. Reed had no comment, saying he had not seen the latest documents.

The papers included e-mail exchanges between Mr. Reed and Mr. Abramoff, as well as checks for hundreds of thousands of dollars paid to Mr. Reed's consulting firm, Century Strategies of Duluth, Ga., by the American International Center, a group controlled by Mr. Abramoff's former business partner, Michael Scanlon. Mr. Scanlon, the former House press secretary to Representative Tom DeLay, has refused to testify before the Indian Affairs Committee.

A spokesman for Mr. Abramoff's law firm said he was in the "impossible position of not being able to defend himself in the public arena until the proper authorities have had a chance to review all accusations."

The statement lacked comment on the contacts between Mr. Abramoff and Mr. Griles and others at the Interior Department. Mr. Griles said he was startled by the job offer in 2003. It was made in a meeting with Mr. Abramoff and another partner at his lobbying firm, Greenberg Traurig.

"It raised alarms with me, because what was that about?" Mr. Griles said. "I went and talked to the ethics office and told them the conversation had occurred." He added that the ethics officers assured him that he had done nothing wrong. "My relationship with Mr. Abramoff was, as with other lobbyists, nothing more, nothing less," he testified.

Mr. Abramoff's e-mail messages show that he used a conservative lobbying group, the Council of Republicans for Environmental Advocacy, and its president, Italian Federici, as a go-between with Mr. Griles.

The council was established in the 1990's by Interior Secretary Gale A. Norton, whom Ms. Federici has called her mentor. The council received hundreds of thousands of dollars in donations from Mr. Abramoff's tribal clients.

Ms. Federici, scheduled to testify, did not appear.

November 4, 2005
Editorial, NYTIMES.com
The Capitol's Revolting Door

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A Senate hearing has provided a rarefied look at Washington's ever-whirring carousel for business lobbyists and government appointees, who spin back and forth between the private and public sectors in a blur of opportunism. The Interior Department's former deputy secretary, Steven Griles - who had been tapped for that job by the Bush administration when he worked as a lobbyist for the mining industry - was accused of using his government post to carry out the bidding of Jack Abramoff, the indicted power lobbyist who sought favorable Interior rulings for Indian-tribe clients vying for casinos.

A former counsel at the department testified that Mr. Griles had meddled aggressively in decisions affecting Abramoff clients. And Senator John McCain produced e-mail about Mr. Abramoff's trying to woo the deputy secretary's favor by offering a lucrative job in - where else? - lobbying.

Mr. Griles denied any inside favoritism and said the job offer had surprised him enough to refer it to ethics officials. This had to be bemusing to Capitol veterans, who are aware that lobbyists are subjected to some of the flimsiest rules in Washington.

As the hearing went forward, it was hard to tell where lobbying ends and public service begins. Mr. Griles turned out to have met Mr. Abramoff by way of a political friend of Interior Secretary Gale Norton. That friend, Italia Federici, is the head of a conservative environmental lobbying group that received Abramoff donations. Senator McCain, saying she seemed to be valued for having "juice" at Interior, is seeking her testimony.

Then there were side tales of Ralph Reed, once the boy-wonder promoter of moral values at the Christian Coalition, and his lobbying ties to Mr. Abramoff's casino dealings.

Stay tuned, but don't ask where it will end, because lobbying is a $3-billion-a-year Capitol institution these days. The hearings have established that for all the election-winning talk of big government as the problem, it can also provide a sweet perch for the victors. Mr. Griles, incidentally, left public service after four years and has returned to the private sector. He is a lobbyist.

Ralph Reed's Other Cheek
The man who mobilized the religious right puts his conservative connections to work for business.
Peter Stone, Mother Jones, November/December 2004 Issue

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When the casino-rich Coushatta tribe of Louisiana began a lobbying blitz in 2001 to block three other tribes from opening competing casinos, they hired two of Washington's top influence brokers, lobbyist Jack Abramoff and public relations whiz Michael Scanlon. But Abramoff and Scanlon -- who are now at the center of a Washington scandal sparked by the multimillion-dollar fees they charged several tribal clients -- knew that to win any lobbying campaign in the South, they needed help mobilizing social and religious conservatives. So they turned to one of the best-known names on the religious right: Ralph Reed. Since his departure as head of the Christian Coalition in 1997, Reed has emerged as a highly sought-after corporate consultant, putting his organizing skills and political connections to work for business interests -- even those that conflict with his followers' conservative beliefs.

On the casino issue, Scanlon's company, Capitol Campaign Strategies, paid Reed to help assemble anti-gambling coalitions in Louisiana and Texas. Among other things, those coalitions backed a lawsuit filed by Texas' attorney general that early in 2002 succeeded in shutting down two Texas casinos that posed competition to the Coushattas' highly lucrative operation.

Reed says he has not wavered from his anti-gambling convictions and points out that his company was paid by Scanlon's firm, not the tribe. "We have never been retained by a casino to serve their interests," he says. But antigambling activists say that argument doesn't wash. "When you get paid big money, it's got to be gambling money," says Tom Grey, a Methodist minister who runs the National Coalition Against Legalized Gambling. "Ralph Reed with all his sophistication should have known where the money came from."

The gambling work is just one instance in which Reed has used his credentials with the religious right to further his clients' business agendas. Since its founding in 1997, his consulting firm, Century Strategies, has racked up millions in fees from companies including Enron, Microsoft, Verizon, and other Fortune 100 companies, according to sources familiar with its client list.

Reed's value to corporate America has been enhanced by his close ties to the Bush administration and especially to Karl Rove, the president's chief political guru. Not long after Century Strategies started, Rove reportedly helped Reed land an Enron contract worth at least $300,000 to help build support for energy deregulation. Century Strategies did voter-mobilization work for the Bush campaign and the Republican National Committee in 2000; it has been retained again this year for similar projects. Reed has also been serving as Southeast regional coordinator for the Bush campaign, with responsibility for delivering Florida and four other Southern states. Bush campaign manager Ken Mehlman has called Reed "the guy who gets it done" in the South, especially in reaching out to evangelicals and other religious groups and advising the national campaign on strategy.

Reed's political ties have allowed him to carve out a special niche among political influence merchants. "Ralph has cornered the market in corporate strategic communications and grassroots using his social conservative base combined with his personal communications skills and his influence in the Bush reelection campaign," says lobbyist Scott Reed (no relation), who managed Bob Dole's 1996 presidential campaign. "This is a unique role for a GOP operative that has huge value for corporate America."

Among Reed's clients is Channel One, a company that provides television equipment to schools in exchange for airing 10 minutes of news and 2 minutes of commercials daily. Prominent conservatives have blasted the company for exposing children to junk-food ads and explicit movie promos. In response, Channel One turned to Reed, who in 2002 helped the company deflect a proposed Texas Board of Education resolution that would have urged schools to jettison Channel One. Reed, who points out that Channel One also runs ads promoting abstinence and anti-alcohol messages, phoned several board members and dissuaded them from voting for the resolution, much to the dismay of conservatives like Phyllis Schlafly, a longtime critic of Channel One. "I'm surprised that any conservative would work for it," Schlafly said. "They're all advertising things that I wouldn't want my children to buy."

More recently, Reed has been retained for his grassroots clout by Verizon, which, along with other Baby Bell phone companies, has been fighting AT&T in a long-running and enormously expensive lobbying battle over access to one another's markets. David Hoppe, a former aide to Senator Trent Lott who lobbied for Verizon, says Reed helped the company make contacts in the White House and garnered backing from big-name conservatives such as Grover Norquist, who heads Americans for Tax Reform. These contacts helped Verizon gain administration support for its position that local phone companies shouldn't be required to lease their lines to long-distance carriers at discounted rates.

Reed also helped a powerful coalition of business groups, including Boeing and the Business Roundtable, to convince Congress to normalize trade relations with China -- over the objections of many conservatives, who criticize China's dismal record on religious freedom. Brian Lunde, a public relations executive who worked with Reed on the China issue in 2000, recalls that Reed was instrumental in persuading conservative members of Congress to support permanent normal trade relations with China, and that he helped write ads aimed at conservatives arguing that a closer economic relationship with China could improve human rights.

Yet some of Reed's work, especially the anti-casino campaign he mounted with Abramoff and Scanlon, is causing increasing headaches for the 43-year-old consultant. Sources familiar with the tribal lobbying scandal say Reed raked in almost $4.1 million in 2001 and 2002 for that work, including $1.8 million from Scanlon's company as well as about $2.3 million from a think tank called the American International Center, which was set up by Scanlon in 2001 and was funded in part by the Coushattas and another of Abramoff and Scanlon's clients, the Mississippi Choctaws.

The payments have attracted the attention of the Senate Indian Affairs Committee, which for several months has been probing allegations that Abramoff and Scanlon engaged in improper lobbying activities and spending on behalf of the four tribes that paid them an astonishing $45 million from 2001 through 2003. The FBI and a federal grand jury are also looking into allegations involving potential illegalities in the work Abramoff, a major GOP fundraiser, and Scanlon, a former aide to House Majority Leader Tom DeLay, did for the tribes. (See also "Justice DeLayed," p. 74.) Congressional investigators say they don't believe that Reed himself did anything improper, but some political analysts say his association with Abramoff and Scanlon could tarnish his image and conservative credentials.

In the end, though, Reed remains attractive to corporate America for the same reason he became a star in GOP politics: He can turn embattled causes and candidates into winners. As chairman of the Georgia GOP in 2002, notes University of Georgia political scientist Charles Bullock, Reed stunned many observers by helping to get Sonny Perdue elected as Georgia's first Republican governor in 130 years. "Corporations would look at someone who had so much success with campaigns that didn't seem so salable politically," Bullock says, "and might assume that Reed could use those same skills to mobilize support for their policy objectives."

Peter Stone is a staff correspondent for National Journal.

House of God?

washingtonpost.com
Retired Judge to Preside in DeLay Case
Appointee Was Chosen for Apparent Nonpartisan Stance
By R. Jeffrey Smith, Washington Post Staff Writer
Friday, November 4, 2005; A04

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The state of Texas finally found a judge yesterday to preside over the criminal trial of former House majority leader Tom DeLay (R-Tex.), but not without a new, last-minute dispute about partisan political interference.

Administrative Judge B.B. Schraub, who earlier this week removed a judge overseeing the proceedings against DeLay for alleged liberal bias, withdrew yesterday from decision making about a replacement judge after an official complaint about Schraub's links to Republicans.

Schraub passed the decision to the chief justice of the Texas Supreme Court, Wallace B. Jefferson. But within hours, political activists in Texas complained that Jefferson has close ties to individuals and political contributors at the heart of the allegations against DeLay.

By day's end, Jefferson seemed to settle the matter by appointing a retired judge from San Antonio, Pat Priest, whose only recent political donations were three checks of $150 each to Democratic candidates for the Texas House in 2004, according to the watchdog group Texans for Public Justice.

The task of finding a supposedly apolitical arbiter for DeLay's trial was complicated by the fact that Texas -- like seven other states -- elects its judges in partisan elections. It also allows elected judges to make financial contributions to partisan causes, and it even permits those with business before the courts to subsidize the judges' political campaigns.

DeLay, who says that the criminal charges against him were motivated by partisan politics, filed a motion last month seeking the removal of District Judge Bob Perkins, an elected Democrat who had contributed funds in 2004 to the liberal group MoveOn.Org. Schraub agreed to do so Tuesday without giving any reason, and promised to pick a replacement.

But prosecutor Ronnie Earle, who has overseen the DeLay investigation and who opposed Perkins's removal, then filed a motion seeking Schraub's removal on grounds that he had contributed to Texas Gov. Rick Perry's election campaign.

Perry, a DeLay ally, worked closely with the majority leader in 2002 to ensure that Republicans gained control of the Texas House, a key step in the DeLay-inspired plan to redraw the Texas congressional map so that the state elected more Republicans to Congress.

Schraub's subsequent withdrawal threw the responsibility to Jefferson, whom Perry appointed as chief justice in 2004 and who shared a campaign treasurer in 2002 with Texans for a Republican Majority, the group indicted along with DeLay for allegedly funneling illegal corporate contributions into the House elections that year. Jefferson also was endorsed by the group, and one of its brochures listed him as a VIP guest at one of the group's fundraisers.

Jefferson's letter did not explain the choice of Priest. Jefferson's office staff declined to comment.

Meanwhile, the House ethics committee -- which DeLay has asked to investigate allegations that he improperly traveled overseas at the expense of lobbyists -- announced yesterday that it hired a new chief counsel, William V. O'Reilly, a former partner in the Washington office of the Jones Day law firm.

The firm's Web site states that O'Reilly previously represented the R.J. Reynolds tobacco company in antitrust litigation. R.J. Reynolds is one of DeLay's longtime financial supporters -- having given to both his election campaigns and his legal defense fund -- and recently flew DeLay to Texas on one of its corporate jets for his first court appearance.

Campaign disclosure records state that O'Reilly contributed $1,000 last year to Sen. John F. Kerry's Democratic presidential campaign, $250 to Wesley K. Clark's Democratic presidential campaign, and $250 to the Democratic National Committee.

© 2005 The Washington Post Company

washingtonpost.com
DeLay Booked in Houston on Money-Laundering, Conspiracy Charges
By R. Jeffrey Smith and Christopher Lee
Washington Post Staff Writers
Friday, October 21, 2005; A05

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AUSTIN, Oct. 20 -- Former House majority leader Tom DeLay (R-Tex.) surrendered Thursday to the county sheriff's office in Houston, and was then photographed, fingerprinted and released, three weeks after becoming the sole member of the House leadership in Washington to be indicted in at least 50 years.

The booking of one of the nation's most powerful politicians was forced by an arrest warrant issued Wednesday by a district court here in the state's capital, in preparation for DeLay's eventual trial on felony criminal charges of money laundering and conspiracy related to the allegedly illegal use of corporate funds in the 2002 state election.

DeLay flew to Texas in a private jet and was accompanied by two U.S. Capitol Police officers.

DeLay, 58, and his attorneys have said the charges are ill-founded and politically motivated. DeLay's congressional office in Washington released a statement in the afternoon saying that the former leader "looks forward to his inevitable exoneration of these ridiculous charges."

The statement asserted that "this is going to end up as an embarrassing episode for . . . national Democrats" and the Travis County district attorney overseeing the state election probe, Ronnie Earle.

But the charges could have serious consequences if upheld in court. Violations of the state's money-laundering statute -- a law commonly used against drug smugglers -- are punishable by a maximum life prison term and a $10,000 fine.

The two indictments naming DeLay both allege that he conspired with political aides James W. Ellis and John Colyandro to inject corporate donations into the 2002 state election, in violation of a long-standing Texas prohibition on the use of corporate funds for election purposes. In particular, they allege that $190,000 collected in Texas, mostly from corporations, was laundered through the national Republican Party in Washington before being returned to selected state candidates.

The aim of the alleged financing scheme was to support a Republican takeover of the Texas House, enabling the new majority to redraw congressional districts to favor the election of more Republicans to Congress. Five more Texas Republicans were elected to Congress in 2004, after the redistricting.

Ellis and Colyandro have denied wrongdoing. At a news conference in Washington that began just as DeLay left the sheriff's office, Ellis said, "The fact that Democrat leaders in Texas and nationally are attempting to use the criminal justice system to achieve the political victories that they failed to win at the ballot box makes them no better than Third World despots who impose their political will by jailing their opponents."

Ellis, who still runs DeLay's leadership political fund, Americans for a Republican Majority, demurred, however, when asked whether he had supplied Republican officials in Washington with a list of names of Texas candidates that were to receive the $190,000. Ellis said that he and Colyandro deny Earle's "version of the story" but said lawyers have advised them not to discuss details of the case.

Asked whether he could deny that any such list exists, Ellis said: "I don't want to comment until I see what list [the prosecutors] are talking about. As you know, in campaigns and politics, there are all kinds of lists. We deny what it says in the indictment, and, based on our attorneys' advice, we have to go through the legal process to tell our story."

Meanwhile, the House ethics committee has not decided whether it will open an investigation into the issues involved in DeLay's indictment. This month, ethics committee Chairman Doc Hastings (R-Wash.) told the Yakima Herald newspaper that the panel historically has not duplicated outside investigations and declined -- in keeping with the committee's custom -- to say whether it might consider taking action against DeLay once the prosecution concludes.

DeLay is scheduled to appear in court on Friday morning, where he is supposed to enter a plea and his attorneys intend to press for his trial to be shifted away from this relatively liberal Texas community. They also are going to ask the judge, an elected Democrat, to recuse himself, on grounds that he contributed to organizations hostile to DeLay.

DeLay's appearance at the sheriff's office at 12:15 p.m. appeared to be carefully orchestrated by his attorneys to elude direct observation by reporters. It was over in half an hour, after he posted a $10,000 bond. The sheriff's office promptly released his mug shot, which showed a grinning politician in a gray suit and red tie, wearing the small lapel pin used to identify members of Congress.

DeLay was driven to the booking directly from Houston airport, where he had arrived in a private jet with two security guards provided by the U.S. Capitol Hill Police. A third police officer had arrived in Houston the previous evening. Kevin Madden, DeLay's spokesman in Washington, said he did not immediately know whose jet it was.

Ordinarily, such police escorts are given only to House leaders, a rank that DeLay relinquished after being indicted in separate charges on Sept. 28 and Oct. 3. But Madden said the police had made a "threat-based assessment" that DeLay still warranted such protection only a few weeks after resigning his post.

Sgt. Jessica Gissubel, a spokeswoman for the Capitol Police, confirmed that DeLay has kept his security detail on the recommendation of the police chief, but added that she was unaware of any specific threat against the congressman.

Sheriff's Deputy Lisa Martinez in Houston said she did not witness the booking procedure for DeLay, but that in all such cases, the accused are taken into a secure area without their lawyers, photographed and then fingerprinted by an inkless machine.

In a telephone interview, DeLay's lead attorney, Dick DeGuerin, said he had arranged for the booking to be conducted in Houston after being informed by the sheriff in DeLay's home county of Fort Bend that there were about "30 news trucks out there. I didn't want there to be this media blitz."

Staff writer Amy Goldstein and research editor Lucy Shackelford contributed to this report. Lee reported from Washington.

© 2005 The Washington Post Company

Tom DeLay's Smiling Mug Shot and the Domino Theory of Moral Nonresponsibility

Dear President Bush: Why DeLay?