Part III: DeLay's Godfather
Stay up to date with the latest headlines via email.
If a person can be judged by his choice of friends, then Tom DeLay should face harsh judgment indeed. Probably no single DeLay insider is more controversial than the man who has been described as DeLay's financial godfather, attorney/lobbyist/fundraiser Jack Abramoff. When DeLay kicked off his political action committee, Americans for a Republican Majority (ARMPAC), Jack Abramoff pledged that he would raise "plenty" for the effort.
And when Jack says "plenty" he means just that. Abramoff routinely raises over $1 million a year for conservative members of Congress, donating up to $250,000 himself. Much of that money ends up in Tom DeLay's PACs. And the route that Abramoff took to become a conservative powerbroker is a strange one indeed.
Abramoff's conservatism stretches back to his college days, when he chaired the GOP's College Republicans in the 1980s. It was there that Abramoff, an orthodox Jew, bonded with evangelical Christian Ralph Reed, who would later go on to lead the Christian Coalition (and then to work for Enron).
In 1983, as the South African apartheid regime was fighting for its survival, Abramoff became chairman of the College Republican National Federation. The group passed a resolution condemning "deliberate planted propaganda by the KGB and Soviet proxy forces" against the South Africa regime. The resolution made no mention of apartheid.
The dawn of the 1990s found Abramoff in apartheid South Africa once again, this time producing an anti-communist thriller film, "Red Scorpion." The film depicted the South African army's fight against "pro-communist forces." The film was banned by the United Nations since it violated the UN's embargo on doing business with the racist South African regime.
Abramoff also helped direct the work of The International Freedom Foundation (IFF). The IFF presented itself as a conservative think tank whose stated goal was to "demonstrate the benefits of a parliamentary democracy and expose the failures of a people's democracy." But in explosive testimony before the South Africa Truth Commission, former South African intelligence officers revealed that the IFF was actually part of the apartheid regime's propaganda operations.
According to those who testified, the IFF served as an intelligence gathering and "political warfare" instrument of the government. They testified that the South African government funded the organization to the tune of $1.5 million through 1992 under the code name "Operation Babushka."
According to Newsday, which investigated the IFF and reported extensively on it in the wake of the Truth Commission hearings, "The project's broad objectives were to try to reverse the apartheid regime's pariah status in Western political circles. More specifically the IFF sought to portray the ANC as a tool of Soviet communism, thus undercutting the movement's growing international acceptance as the government-in-waiting of a future multi-racial South Africa."
It was reported that Abramoff attracted many other Washington conservatives to the IFF's cause, including Rep. Dan Burton (R-IN), Senator Jesse Helms, (R-GA), Rep. Phillip Crane (R-IL) and Rep. Robert Dornan (R-CA)
South African intelligence even voiced satisfaction with the work the IFF did. "They (IFF) were all very good, those guys," testified former South African police official Vic McPheerson, who ran security branch operations for the apartheid regime. "They were not just good in intelligence, but in political warfare."
According to McPheerson, the IFF earned up to half its funding doing "jobs" for South African intelligence. He said the intelligence agency sent their fee payments directly to IFF's Washington office. And while Abramoff's IFF focused on tarnishing the image of Nelson Mandella and the ANC, it also supported the Nicaraguan Contras, defended Ronald Reagan aide Oliver North, and sought a British government investigation of the charity Oxfam for the political support it gave the ANC.
All the US participants involved with the IFF, including Abramoff, deny any knowledge that South African intelligence had funded any of IFF's operations. The IFF disbanded in 1993 when South African president de Klerk pulled the funding for most of the government's clandestine operations.
In 1994, Abramoff had a new lobby-client in Africa: Zairian dictator Mobutu Sese Seko. Sese Seko was a corrupt despot whom the U.S. State Department had designated as one of Africa's "biggest obstacles to democracy."
DeLay and "Casino Jack"
When Republicans gained control of the House, more lucrative prospects opened up for Abramoff. As a member of the Washington lobbying firm Preston Gates Ellis & Touvelas Meeds LLP, Abramoff quickly built a clientele willing to pay big money for help with unpopular causes. Abramoff became a major force in promoting and protecting gambling on Indian reservations. He worked hand in glove with DeLay to successfully block every attempt by Congress to limit the spread of Indian gaming or to tax its exploding revenues.
Gambling proved a very lucrative beat. With American Indian tribes raking in over $10 billion a year in revenue from their combined gambling operations, there was plenty left over to spread around Washington. And who better to spread it than Tom DeLay's friend, Jack Abramoff?
The Choctaw tribe alone has paid Abramoff more than $10 million for his services. It was bargain. In June 2000, the House and Senate passed, without debate, a DeLay-supported bill that turned over thousands of additional acres of land to the tribe.
Historically, American Indians had been a Democratic constituency. Abramoff and DeLay saw an opportunity to change that. The two men were ideological and emotional twins. "You have to be willing to do whatever it takes to win," Abramoff told the Wall Street Journal. He was clearly Tom DeLay's kind of guy.
With DeLay's newfound support for all things Indian, Abramoff succeeded in moving tribe contributions to the Republican camp.
- "Although American Indians were for many years identified almost exclusively as part of the Democrat coalition, that view has changed. People recognize that Jack Abramoff has been an important part of this transition." (DeLay to the Wall Street Journal, July 2000)
In return for his help, DeLay received over $50,000 in contributions from Abramoff and the Choctaws. DeLay, who took only 18 trips in the past five years, made four of those junkets to Choctaw casino/hotels. Abramoff hired two of DeLay's former top advisors to work with his Choctaw clients.
In March 1997, Abramoff's Choctaw clients paid $3,000 in travel and lodging expenses for two DeLay staffers. The staffers listed the junket as a trip "to review and observe the reservation and local economy" -- at the tribe's Silver Star Hotel Casino.
The Choctaws have since been granted an unprecedented exemption from scrutiny by federal regulators. The Choctaw became the only tribe allowed to regulate its own gaming operations. That little piece of work earned Abramoff another $2.3 million.
- "Republicans expect their piece (of Indian gambling contributions) to grow significantly in 2002. Jack Abramoff, a major campaign donor and fund-raiser for President Bush is one of them. By preaching the GOP's free-market theology, Mr. Abramoff has persuaded five tribes to hire him as a lobbyist -- and, he got all five to agree to boost their donations to Republicans." (Wall Street Journl, July 2000)
But supporting any form of legalized gambling was not without its risks for DeLay. After all, his public persona was that of a devoted evangelical Christian who supports all that is wholesome and opposes all that is evil. His church-going constituents back in Texas believed that gambling was destructive to families and communities. But thanks largely to Abramoff, the amount of money flowing to DeLay and his PAC from tribes with gambling operations swamped any potential contributions from the Christian right.
Gambling's Bad Karma Comes Home to Roost
The risks involved in backing gambling interests came home to roost for DeLay's friend Abramoff last February, when he and Tom DeLay's former aide, Mike Scanlon, suddenly found themselves smack in the middle of an alleged mob assassination in Miami, Florida.
Abramoff and former Reagan HUD official Ben Waldman had invested in SunCruz, a troubled gambling cruise line based in Florida. Abramoff's other partner in the SunCruz deal, Adam Kidan, was known by authorities to have had business ties to members of the Gambino and Gotti crime families. In 1993 Kidan's mother was murdered in Philadelphia by a mob assassin tied to the Bonanno crime family. His bad luck continued when Kidan's New York business franchise "Dial-A-Mattress" failed. Then in November 2000, he was disbarred as a lawyer by New York State for allegedly misappropriating $100,000 of his step-father's assets.
Abramoff and his partners signed the deal to purchase SunCruz from its owner, Gus Boulis. Boulis then accused the partners of failing to pay him for his business. He reported that the $5 million check they had given him as a down-payment bounced and that payment of a $20 million promissory note was overdue. Abramoff and Kidan had personally guaranteed the debt as part of the deal.
Kidan responded by reporting to Miami police that Boulis had tried to stab him with a penknife. But Kidan was okay. It would be Boulis who would end up dead. On the night of February 6, 2001, Boulis was gunned down in a blaze of gunfire while driving away from his office. Two cars boxed his car in a narrow ally and he was shot four times. Florida authorities describe it as "a classic mob hit." No one has been charged in the crime, though Florida newspapers have described Kidan as one of the prime suspects.
DeLay's former aide, Mike Scanlon, who had been hired by Abramoff to act as spokesperson for the SunCruz operation, suddenly found himself defending the SunCruz deal and his new boss. Scanlon told reporters that, while Boulis's murder was unfortunate, "Jack's not walking away from this." He went on to protest allegations that Abramoff had any unsavory connections to the gambling underworld. "I do think it's a bit premature to follow a storyline about how a Washington lobbyist fellow, like Jack, now finds himself in this tumultuous world of murder for hire."
- "Abramoff and his partners can expect to be contacted soon by homicide detectives, seeking clues as they sift through the complex business dealings between Boulis and his casino antagonists." (Miami Daily Business Review, Feb 2001)
Abramoff was never implicated in the crime. But notwithstanding Scanlon's initial protests, Abramoff quickly shed his interest in SunCruz, signing his 35% share over to the murdered man's estate. The murder flap threatened the wholesome image Abramoff had cultivated for his gambling (he prefers the term "gaming") clients like the Choctaw Indians.
The murder also threatened the mutually lucrative relationship Abramoff had cultivated with the House Whip. With both men now so closely tied to Indian gambling interests --which they maintain were wholesome and crime-free enterprises -- the mess over SunCruz was the last thing they needed.
By dumping SunCruz, Abramoff had to abandon another deal he had going in which DeLay could have played a key role. Even as police investigated the murder, Kidan and Abramoff were pushing forward with a planned $100 million junk bond offering to expand SunCruz operations. And where were they planning to expand SunCruz's floating casino operations? To Tom DeLay's favorite place on earth -- the US protectorate Mariana Islands in the North Pacific, which DeLay describes this way: "It's like my Galapagos Island."
Investigative journalist Stephen Pizzo's bestselling book, "Inside Job: The Looting of America's Savings and Loans," is now available as an ebook.