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Charges laid against Scanlon in tribal lobbying probe
Monday, November 21, 2005

Documents: Plea Deal | Attachment

Update: 4:48pm. Michael Scanlon pleaded guilty today to one count of conspiracy under Section 371. He agreed to pay $19. 7 million in restitution to his former tribal clients and cooperate with the ongoing investigations into the activities of Jack Abramoff. He will face a sentence between 51 to 63 months.

At a press conference outside the courthouse, Scanlon had little to say. One of his lawyers, Plato Cacheris, said he was "regretful for what happened to the tribes" but that he didn't have anything else to offer in regard to the tribal clients he defrauded.

Scanlon will not be sentenced until the investigations are complete. Until then, he will be posting a $5 million unsecured bond as a personal guarantee.

His next court appearance is scheduled on March 1, 2006.

A former business partner of disgraced lobbyist Jack Abramoff was charged last week with swindling tribes out of millions of dollars.

Michael Scanlon, a public relations consultant and former aide to Rep. Tom DeLay (R-Texas), faces a hearing today at 4pm in Washington, D.C. According to news reports, he has reached a plea deal with federal prosecutors that requires his testimony against Abramoff and potentially against some top Republican leaders who have been linked to the scandal.

The Charges
In an eight-page charge of "information" -- an indication of a plea deal -- the Department of Justice laid one count of conspiracy against Michael P.S. Scanlon. He is charged with violating 18 United States Code Section 371, which deals with conspiracy.

As part of the conspiracy, Scanlon offered items of value to "federal public officials" in violation of 18 United States Code Section 201(b); devised a scheme to defraud tribal clients of money and property under 18 U.S.C. Sections 1341 and 1343; and devised a scheme to defraud tribal clients of "honest services" under 18 U.S.C. Sections 1341, 1343, and 1346, according to the charges [PDF: US v. Scanlon].

None of the laws Scanlon is accused of violating involve tribes specifically. Section 371 deals with crimes against the United States [U.S. Code: Conspiracy]. Section 201(b) deals with bribery of public officials [U.S. Code: Bribery, Graft, and Conflicts of Interest]. Sections 1341, 1343 and 1346 fall under mail fraud crimes [U.S. Code: Mail Fraud].

Lobbyist A
Jack Abramoff's name doesn't appear anywhere in the information count. Instead he is identified as "Lobbyist A" -- a sign that he faces charges of his own.

The Tribes
The indictment mentions four tribes who were clients of Abramoff, through his former law/lobbying firm and Scanlon, through his public relations firm. The tribes all provided testimony to the Senate Indian Affairs Committee about their involvement with the pair.

None of the tribes are identified by name. Only their states are identified.

Mississippi Band of Choctaw Indians, or "Mississippi Tribe" - The tribe spent $14.8 million on Scanlon's Capital Campaign Strategies firm, according to DOJ. Of this amount, half of the profit -- or about $6.4 million, went to Lobbyist A under the "gimme five" scheme that the Senate committee heard about several times. The Choctaws were Abramoff's first tribal client and Chief Philip Martin praised his services in the press. He changed his mind after the Senate began its investigation.
• Mississippi Band of Choctaw Indians

Coushatta Tribe, or "Louisiana Tribe" -- The tribe spent $30.5 million on Scanlon, of which half of the profits went to Lobbyist A. This amounted to $10.9 million, according to the indictment. The tribe's former chairman and two former council members hired Abramoff and Scanlon but were ousted from office after the scandal came to light.
• Coushatta Tribe

Saginaw Chippewa Indian Tribe, or "Michigan Tribe" -- The tribe spent $3.5 million on Scanlon, with 50 percent of the profit, or $540,000, going to Lobbyist A. The tribe's former chief hired Abramoff and Scanlon but was voted out of office before the scandal became national news. The current tribal leadership terminated their relationship with Abramoff and Scanlon after learning of the high fees.
• Saginaw Chippewa Indian Tribe

Ysleta del Sur Pueblo/Tigua Tribe, or "Texas Tribe" -- The tribe spent $4.2 million on Scanlon, of which about $1.9 million went to Abramoff, according to the charges. The tribe hired Scanlon and took on Abramoff, who pledged to work for free, for several months in 2002. Tribal leaders said they slowly realized they were being misled over the course of the year.

Representative #1
Rep. Bob Ney (R-Ohio) figures prominently in the indictment although he is not mentioned by name either under a section labeled "Corruption Scheme."

According to the charges, Scanlon and Lobbyist A "provided a stream of things of value to Representative #1 and members of his staff." These things included a "lavish trip to Scotland to play golf on world-famous courses, tickets to sporting events and other entertainment, regular meals at Lobbyist A's upscale restaurant, and campaign contributions for Representative #1, his political action committee, and other political committees on behalf of Representative #1."

The Tigua Tribe, for example, gave $32,000 to Ney. Tribal leaders said they were directed by Abramoff and Scalon to do so. They also said Abramoff and Scanlon asked them to contribute money for the golf trip but they declined.

Scanlon and Lobbyist A then received "Representative #1's agreement to perform a series of official acts, including but not limited to, agreements to support and pass legislation, agreements to place statements into the Congressional Record, meetings with Lobbyist A and Scanlon's clients, and advancing the application of a client of Lobbyist A for a license to install wireless telephone infrastructure in the House of Representatives."

In 2002, Ney agreed to sponsor a rider to help the Tigua Tribe reopen its casino. Tribal leaders said Ney spoke of his commitment to the measure but Ney later accused Abramoff and Scanlon of duping him when his involvement surfaced. He has set up a legal defense fund in response to the investigation.

Ney is known as the "mayor" of Capitol Hill because he is chairman of the House Administration Committee, which controls budgets, equipment, offices and parking for the House.

The Judge
The case has been assigned to Judge Ellen Segal Huvelle, who was nominated to the bench in 1999 by former president Bill Clinton. She has served as a judge in Massachusetts and in the District of Columbia. [Biography].

According to a preliminary review of court documents, Huvelle hasn't handled any Indian law cases. But she has handled a number of cases involving federal agencies, including the Interior Department and the Agriculture Department.

Huvelle works in the same courthouse as Judge Royce C. Lamberth, who is handling the trust fund case. The court has been the scene of recent attention due to the CIA leak case involving the White House and top Bush administration aides.

The Investigators
The investigation was handled by the Public Integrity Section and the Fraud Section at the Department of Justice. These sections both fall under the Criminal Division at DOJ [Website]

The charge of information, filed against Scanlon on November 17, was signed by Noel L. Hillman, the Public Integrity Section chief, and two of his trial attorneys. Hillman, a former assistant U.S. attorney in New Jersey, has been nominated to the federal bench by President Bush.

The charge also was signed by Paul E. Pelletier, acting Fraud Section chief, and two trial attorneys.

The Fraud Section is handling the indictment of David Safavian, a former White House official who is the only other person to be charged in connection with the Abramoff scandal. He is accused of lying to the Senate Indian Affairs Committee and to other investigators about his dealings with Abramoff. He says he was charged in an attempt to force his cooperation with the probe.

November 2, 2005, Hearing:
Senate Indian Affairs Committee

Relevant Documents:
Exhibits from Hearing | Senate Witness List / Testimony

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