US: Lobbyist admits kickbacks, influence peddling

Abramoff agrees to cooperate in corruption probe
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Former high-powered lobbyist Jack Abramoff pleaded guilty Tuesday to conspiracy, fraud and tax evasion charges, agreeing to cooperate in a federal corruption probe in Washington.

Abramoff, 46, admitted that he did not disclose receiving kickbacks on payments from Native American tribes to a partner's public relations firm. He also acknowledged that some of his money did not go to charities, as he had reported, but paid for a golf trip to Scotland.

Abramoff's plea agreement could spare him the maximum 30-year sentence if he provides valuable assistance in the corruption investigation.

"Words can never express my sorrow and profound regret," Abramoff told U.S. District Court Judge Ellen Segal Huvelle.

"Nor can they express my sadness and regret for my conduct," he added. " I ask for forgiveness and redemption from the Almighty."

Court documents filed Tuesday describe how Abramoff and business partner Michael Scanlon cheated clients of Abramoff's lobbying firm by urging them to use Scanlon's PR firm -- which in turn paid Abramoff kickbacks.

Abramoff is a longtime associate of several top GOP leaders, including former House Majority Leader Tom DeLay, Americans for Tax Reform director Grover Norquist, and former Christian Coalition chief Ralph Reed.

Ripple effect

Abramoff's cooperation deal could have a wide-reaching effect in Washington.

Sources told CNN's Ed Henry that the former lobbyist may have thousands of e-mails in which he describes influence-peddling and explains what lawmakers were doing in exchange for the money he was putting into their campaign coffers.

A source close to the investigation said investigators are looking at about half a dozen members of Congress.

Sources said Abramoff has been cooperating with the Justice Department for months without any kind of plea deal. He will not be sentenced until his cooperation is complete, the source added.

The court documents allege Abramoff deprived his clients of his honest services by overcharging them to fund the alleged kickback scheme with Scanlon.

Listed in the court documents are a four Native American tribes that contracted Abramoff's services. The documents said the tribes gave millions of dollars to Scanlon's firm, which then paid Abramoff 50 percent of the profits it made.

According to the documents:

  • Starting in 2001, Abramoff persuaded a Louisiana tribe to pay nearly $30.5 million for "grass roots work" to a Scanlon company, which, in turn, kicked back nearly $11.4 million to Abramoff.
  • In 2001, Abramoff also persuaded a Mississippi tribe to give nearly $14.8 million to Scanlon, who funneled nearly $6.3 to Abramoff.
  • A Michigan tribe gave $3.5 million to Scanlon's firm in 2002; $540,000 ended up in Abramoff's pocket.
  • Also in 2002, a Texas tribe gave $4.2 million to Scanlon, and nearly $1.9 million found its way to Abramoff.

According to e-mail obtained by a Senate committee, Abramoff made a fortune from the tribes while privately mocking tribal leaders as "monkeys" and "morons."

Influence Peddling Alleged

Scanlon, a 35-year-old public relations executive and onetime aide to DeLay, pleaded guilty in November to a single conspiracy count as part of a deal with the Justice Department. He agreed to pay about $19.7 million in restitution for kickbacks he admitted receiving, and promised to testify against Abramoff.

Prosecutors allege that from 1997 to April 2004 Abramoff schemed with Scanlon and others to enrich himself through the kickbacks, raised by charging fees that "incorporated huge profit margins."

Abramoff and others allegedly "would cause clients to falsely believe that some of the fees charged were being used for specific purposes" when the money "was used for their own personal benefit," the document said.

Prosecutors also detailed a "stream of things of value" given to an unnamed congressman, identified in the court documents as Representative No. 1, and members of his staff.

The items listed include a "lavish" golf trip to Scotland, tickets to sporting events and other entertainment, meals at Abramoff's "upscale" Washington restaurant, and campaign contributions to the representative and his political action committee in exchange for a series of actions by that representative.

The Justice Department would not identify the congressman. But government sources have said he is Republican Rep. Bob Ney of Ohio, chairman of the House Administration Committee.

Ney denies wrongdoing

In the court documents, prosecutors alleged Abramoff, Scanlon and others got the lawmaker "to perform a series of official acts."

According to the documents, the acts included supporting bills, placing statements in the Congressional Record, meeting with the lobbyists' clients and supporting a client of Abramoff's in a bid to win a contract for wireless telephone service for the House of Representatives.

Ney is known to have entered comments in the Congressional Record against a man standing in the way of an Abramoff project -- a 2000 casino fleet purchase -- and he took a 2002 golf trip to Scotland that Abramoff sponsored.

Ney's office has said that any allegation that the congressman "did anything illegal or improper is false."

Ney is the only member of Congress to disclose that he has been subpoenaed as part of the investigation -- a step required under House rules.

Abramoff's name also surfaced earlier this year amid ethics questions about DeLay, a longtime friend. The Washington Post has reported DeLay took two expensive overseas trips that Abramoff and other lobbyists bankrolled -- a violation of House rules, if true.

DeLay has denied wrongdoing, calling the report "just another seedy attempt by the liberal media to embarrass me."

DeLay, who himself is facing money laundering charges, was forced to step down from his leadership position in September after he was indicted on conspiracy charges that were later dropped.

Abramoff will also plead guilty later Tuesday to charges in Florida, said Neal Sonnett, his Miami attorney. Those charges stem from Abramoff's role in the 2000 purchase of SunCruz Casinos, a fleet of offshore gambling boats.

In the Florida case, Abramoff and a partner, Adam Kidan, are accused of falsifying a $23 million wire transfer to obtain $60 million in financing. Kidan pleaded guilty last month.

CNN's Suzanne Malveaux, Kelli Arena, Ed Henry, Kevin Bohn, Paul Courson and Rich Phillips contributed to this report.

AMP Section Name:Corruption
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