|
Much ink has
been used on the Abramoff scandal in relation to bilking Indian tribes of
money, and then using it for other purposes than the client’s intended. Below is the section from today’s WaPo reporting
detailing how super-lobbyist Jack Abramoff’s former good buddy Rep. Tom “The Hammer”
DeLay, was involved with Russian oil executives who intended to influence the
IMF in 1998. Former Sen.
Alan Simpson (R-WY)
has been quoted saying that one of Abramoff’s lawyers told him during a plane
ride that this scandal would be bigger than the Abscam FBI sting in the late
1970s and early 1980s, in which 6 House members and 1 senator were convicted. Mr. Abramoff is finalizing plea bargain
negotiations with prosecutors, and we’re told to expect ‘big headlines’ this
week. - kwc The DeLay-Abramoff Money Trail By R. Jeffrey Smith, Washington
Post Staff Writer, Saturday, December 31, 2005; A01 The U.S. Family
Network, a public advocacy group that operated in the 1990s with close ties to
Rep. Tom DeLay and claimed
to be a nationwide grass-roots organization, was funded almost entirely by corporations
linked to embattled lobbyist Jack Abramoff, according to tax records and former
associates of the group. During its 5-year
existence, the U.S. Family Network raised $2.5 million but kept its donor list
secret. The list, obtained by The Washington Post, shows that $1 million of its revenue came in a single
1998 check
from a now-defunct London law firm whose former partners would not identify the
money's origins. Two former associates
of Edwin A. Buckham, the congressman's former chief of staff and the organizer
of the U.S. Family Network, said Buckham told them the funds came from Russian oil and gas executives. Abramoff had been working closely with
two such Russian energy executives on their Washington agenda, and the lobbyist
and Buckham had helped organize a 1997 Moscow visit by DeLay (R-Tex.). The former president
of the U.S. Family Network said Buckham told him that Russians contributed $1
million to the group in 1998 specifically
to influence DeLay's vote on legislation the International Monetary Fund needed
to finance a bailout of the collapsing Russian economy. …Whatever the real
motive for the contribution of $1 million - a sum not prohibited by law but
extraordinary for a small, nonprofit group - the steady stream of corporate
payments detailed on the donor list makes it clear that Abramoff's
long-standing alliance with DeLay was sealed by a much more extensive web of
financial ties than previously known...the records show that the tiny U.S.
Family Network, which never had more than one full-time staff member, spent
comparatively little money on public advocacy or education projects. Although
established as a nonprofit organization, it paid hundreds of thousands of
dollars in fees to Buckham and his lobbying firm, Alexander Strategy Group. 'Red Flags' on Tax Returns Nine months before the June 25, 1998, payment of $1 million
by the London law firm James & Sarch Co., as recorded in the tax forms,
Buckham and DeLay were the dinner guests in Moscow of Marina Nevskaya and
Alexander Koulakovsky of the oil firm Naftasib, which in promotional literature counted as its
principal clients the Ministry of Defense and the Ministry of Interior. Buckham, a graduate of
the University of Tennessee, had worked for DeLay since 1995, after serving in
other congressional offices and then as executive director of the Republican
Study Committee, a group of fiscally conservative House members. Their other dining
companions were Abramoff and Washington lawyer Julius "Jay" Kaplan,
whose lobbying firms collected $440,000 in 1997 and 1998 from an obscure
Bahamian firm that helped organize and indirectly pay for the DeLay trip, in
conjunction with the Russians. In disclosure forms, the stated purpose of the
lobbying was to promote the policies of the Russian government. Kaplan and British
lawyer David Sarch had worked together previously. (Sarch died a month before
the $1 million was paid.) Buckham's trip with DeLay was his second to Moscow
that year for meetings with Nevskaya and Koulakovsky; on the earlier one, the
DeLay aide attracted media attention by returning through Paris aboard the
Concorde, a $5,500 flight. Former Abramoff
associates and documents in the hands of federal prosecutors state that Nevskaya
and Koulakovsky sought Abramoff's help at the time in securing various favors
from the U.S. government, including congressional earmarks or federal grants
for their modular-home construction firm near Moscow and the construction of a
fossil-fuel plant in Israel. None appears to have been obtained by their firm. Former DeLay employees
say Koulakovsky and Nevskaya met with him on multiple occasions. The Russians
also frequently used Abramoff's skyboxes at local sports stadiums -- as did
Kaplan, according to sources and a 2001 e-mail Abramoff wrote to another
client. Three sources familiar
with Abramoff's activities on their behalf say that the two Russians - who knew
the head of the Russian energy giant Gazprom and had invested heavily in that
firm - partly wanted just to be seen with a prominent American politician as a
way of bolstering their credibility with the Russian government and their
safety on Moscow's streets. The Russian oil and gas business at the time had a
Wild West character, and its executives worried about extortion and kidnapping
threats. The anxieties of Nevskaya and Koulakovsky were not hidden; like many
other business people, they traveled in Moscow with guards armed with machine
guns. During the DeLays'
visit on Aug. 5 to 11, 1997, the congressman met with Nevskaya and was escorted
around Moscow by Koulakovsky, Naftasib's general manager. DeLay told the House
clerk that the trip's sponsor was the National Center for Public Policy
Research, but multiple sources told The Post that his expenses were indirectly
reimbursed by the Russian-connected Bahamian company. DeLay spokesman Kevin
Madden said the principal reason for his Moscow trip was "to meet with
religious leaders there." Nevskaya, in a letter this spring, said
Naftasib's involvement in such trips was meant "to foster better
understanding between our country and the United States" and denied that
the firm was seeking protection through its U.S. contacts. Nevskaya added in an
e-mail yesterday that Naftasib and its officials were not representing the
ministries of defense and interior or any other government agencies "in
connection with meetings or other lobbying activities in Washington D.C. or
Moscow." A former Abramoff
associate said the two executives "wanted to contribute to DeLay" and
clearly had the resources to do it. At one point, Koulakovsky asked during a
dinner in Moscow "what would happen if the DeLays woke up one
morning" and found a luxury car in their front driveway, the former
associate said. They were told the DeLays "would go to jail and you would
go to jail." The tax form states
that the $1 million came by check on June 25, 1998, from "Nations Corp,
James & Sarch co." The Washington Post checked with the listed
executives of Texas and Florida firms that have names similar to Nations Corp,
and they said they had no connection to any such payment. James & Sarch Co.
was dissolved in May 2000, but two former partners said they recalled hearing
the names of the Russians at their office. Asked if the firm represented them,
former partner Philip McGuirk at first said "it may ring a bell," but
later he faxed a statement that he could say no more because confidentiality
practices prevent him "from disclosing any information regarding the
affairs of a client (or former client)." Nevskaya said in the
e-mail yesterday, however, that "neither Naftasib nor the principals you
mentioned have ever been represented by a London law firm that you name as
James & Sarch Co." She also said that Naftasib and its principals did
not pay $1 million to the firm, and denied knowing about the transaction. Two former Buckham
associates said that he told them years ago not only that the $1 million
donation was solicited from Russian oil and gas executives, but also that the
initial plan was for the donation to be made via a delivery of cash to be
picked up at a Washington area airport. One of the former
associates, a Frederick, Md., pastor named Christopher Geeslin who served as
the U.S. Family Network's director or president from 1998 to 2001, said Buckham
further told him in 1999 that the payment was meant to influence DeLay's vote
in 1998 on legislation that helped make it possible for the IMF to bail out the
faltering Russian economy and the wealthy investors there. "Ed told me,
'This is the way things work in Washington,' " Geeslin said. "He said
the Russians wanted to give the money first in cash." Buckham, he said,
orchestrated all the group's fundraising and spending and rarely informed the
board about the details. Buckham and his attorney, Laura Miller, did not reply
to repeated requests for comment on this article. The IMF funding legislation was a
contentious issue in 1998.
The Russian stock market fell steeply in April and May, and the government in
Moscow announced on June 18 - just a week
before the $1 million check was sent by the London law firm - that
it needed $10 billion to $15 billion in new international loans. House Republican leaders had expressed
opposition through that spring to giving the IMF the money it could use for new bailouts, decrying
what they described as previous destabilizing loans to other countries. The IMF
and its Western funders, meanwhile, were pressing Moscow, as a condition of any
loan, to increase taxes on major domestic oil companies such as Gazprom, which
had earlier defaulted on billions of dollars in tax payments. On Aug. 18, 1998, the
Russian government devalued the ruble and defaulted on its treasury bills. But
DeLay, appearing on "Fox News Sunday" on Aug. 30 of that year,
criticized the IMF financing bill, calling the replenishment of its funds
"unfortunate" because the IMF was wrongly insisting on a Russian tax
increase. "They are trying to force Russia to raise taxes at a time when
they ought to be cutting taxes in order to get a loan from the IMF. That's just
outrageous," DeLay said. In the end, the Russian legislature
refused to raise taxes, the IMF agreed to lend the money anyway, and DeLay
voted on Sept. 17, 1998, for a foreign aid bill containing new funds to
replenish the IMF account.
DeLay's spokesman said the lawmaker "makes decisions and sets legislative
priorities based on good policy and what is best for his constituents and the
country." He added: "Mr. DeLay has very firm beliefs, and he fights
very hard for them." Kaplan did not respond
to repeated messages, and through a spokesman for lawyer Abbe Lowell, Abramoff
declined to comment. No legal bar exists to a $1 million
donation by a foreign entity to a group such as the U.S. Family Network, according to Marcus Owens, a Washington
lawyer who directed the IRS's office of tax-exempt organizations from 1990 to
2000 and who reviewed, at The Post's request, the tax returns filed by the U.S.
Family Network. But "a million dollars is a staggering amount of
money to come from a foreign source" because such a donor would not be
entitled to claim the tax deduction allowed for U.S. citizens, Owens said. "Giving large donations
to an organization whose purposes are as ambiguous as these…is extraordinary. I
haven't seen that before. It suggests something else is going on. "There are any number of red flags
on these returns." http://www.washingtonpost.com/wp-dyn/content/article/2005/12/30/AR2005123001480.html |
_______________________________________________ Futurework mailing list [email protected] http://fes.uwaterloo.ca/mailman/listinfo/futurework
